Integrating Nature into Debt Sustainability Analysis

This report highlights the importance of integrating nature-related risks into debt sustainability frameworks for institutions such as the International Monetary Fund (IMF).

It provides compelling quantitative evidence that the inclusion of nature collapse scenarios is necessary to provide a full picture of debt sustainability risks to sovereigns.

A four-step process for integrating nature-related risks into Debt Sustainability Analysis (DSA)is applied to six countries – Bangladesh, Brazil, Canada, Indonesia, Nigeria and Vietnam – using novel World Bank estimates of the macroeconomic cost of a partial collapse of ecosystem services.

The results show that nature loss matters for debt sustainability.

Access the resource