Posted on July, 01 2025

The briefing builds on a UCL IIPP and University of Exeter Global Systems Institute analysis of five case studies across five ecosystems nearing dangerous tipping points with systemic consequences: the Amazon rainforest in Brazil, the boreal forests in Russia and Canada, the tropical peatlands in Indonesia, and the mangroves in Indonesia. The study finds that financial institutions headquartered in the EU are major backers of companies driving ecosystem degradation in some of these regions, including deforestation in the Brazilian Amazon. It also emphasises the urgency needed to address both the exposure of European financial institutions and the environmental harm their lending and capital markets issuances may be causing within and beyond European borders.

Dominyka Nachajute, Sustainable Finance Policy Officer at WWF European Policy Office, said: “There’s no time to waste. Our financial systems work in a way that actively harms nature and could lead to dangerous and irreversible shifts in crucial ecosystems. We’re approaching a point that requires urgent action by central banks and financial regulators in order to mitigate the systemic risks posed by accelerating nature loss.”

The case studies underscore that ecosystem degradation in the regions analysed threatens to reach critical tipping points, with potentially disastrous consequences for economic and financial systems across the globe. Yet, central banks, financial regulators and supervisors still fail to adequately address these systemic risks. WWF and UCL IIPP urge financial regulators to act in a precautionary manner despite the difficulties in measuring nature-related risks, to redirect financial flows away from environmentally harmful activities and to strengthen regulation to align the broader financial system with this objective.