A significant portion of UNEP FI’s work under this thematic is implemented through the Natural Capital Finance Alliance (NCFA). The NCFA was launched at the UN Conference on Sustainable Development (Rio+ 20 Earth Summit) in 2012 by UNEP FI and the UK-based non-governmental organisation, Global Canopy Programme (GCP). It is a worldwide finance led initiative to integrate natural capital considerations into financial products and services, and to work towards their inclusion in financial accounting, disclosure and reporting. Signatory financial institutions are working towards implementing the commitments in the Natural Capital Declaration through NCFA projects. These are overseen by a steering committee of signatories and supporters and supported by a secretariat formed of the UNEP FI and GCP.

What is Natural Capital?

The Natural Capital Finance Alliance defines natural capital as the stock of ecosystems that yields a renewable flow of goods and services that underpin the economy and provide inputs and direct and indirect benefits to businesses and society. From the perspective of the financial sector, natural capital is a subset of environmental, social and governance (ESG) factors that can be material to financial institutions, mainly through their allocations of capital to companies through loans and investments or premiums as part of insurance contracts.

What the NCFA is working towards?

The NCFA is an initiative that goes beyond ‘sustainability’. It is about the materiality of natural capital to the health of financial institutions and the finance sector. The NCFA proposes that natural capital-related risks are included in the financial metrics used by the private sector, where appropriate. We are not suggesting monetising or putting a monetary value on a hectare of tropical rainforest or a coral reef. We are looking to clarify how financial institutions are exposed to material natural capital risks through companies, and to encourage financial institutions to allocate capital to ‘natural capital positive’ business opportunities.


The initiative is governed by the NCFA Steering Committee.


Visit the Natural Capital Finance Alliance website