In today’s world, ecological risk is no longer a public sector concern or a topic of activism, it has become a front-and-center commercial issue. From climate-induced financial instability to biodiversity loss, these risks are reshaping the way financial services operate. As a serial entrepreneur with over two decades of experience, I, Violetta Bonenkamp, see this as a pivotal challenge and opportunity for entrepreneurs and financial institutions alike to redefine their strategies. Ecological risks are not just environmental; they have direct implications on productivity, investments, and economic stability. To stay ahead, the financial sector must embrace not just incremental change but transformative innovation.
Why Ecological Risks Are the "New Normal" in Commercial Finance
We live in what scientists call the "Anthropocene era," where human actions significantly impact the planet. This has brought irreversible changes to ecosystems, causing escalating financial risks. According to the NGFS (Network for Greening the Financial System), about $44 trillion (over half of global GDP) is moderately or heavily dependent on nature. As a result, biodiversity loss, extreme weather conditions, and ecosystem collapses are being identified as commercial liabilities that could destabilize entire industries, including financial services.
Key Insight: Financial institutions are no longer immune from climate risks. Their ability to thrive now depends heavily on addressing nature-related vulnerabilities and incorporating these risks into their decision-making processes. For businesses, this means a possibility of not just compliance but tapping into a multi-trillion-dollar market for green financial products.
What Can Financial Institutions Do to Go Further and Faster?
Clearly, acknowledging the problem is no longer enough. Sitting on the sidelines and setting up superficial sustainability programs, while effective for optics, no longer cuts it. As entrepreneurs and business leaders, we must advocate for our financial partners to implement the actionable solutions outlined below.
1. Full integration of ecological risks into existing risk models
Finance frameworks traditionally cater to economic volatility, but environmental concerns demand a tectonic shift in perspective. Financial institutions need mechanisms that go beyond "greenwashing" to assess risks such as:
- Climate-induced business interruption.
- Costs of remedying ecological harm at business sites.
- Transition risks when businesses fail to move toward sustainable models fast enough to meet new international regulations.
A stellar example is the Task Force on Climate-Related Financial Disclosures (TCFD) framework, now widely adopted by enterprises to disclose climate-related risks. Entrepreneurs can use this detailed data to pressure financial institutions to align their lending strategies with forward-thinking, eco-conscious policies.
2. Increase focus on biodiversity financing
Too often, environmental initiatives have revolved exclusively around carbon offsetting while ignoring biodiversity. However, according to the IPBES report, biodiversity losses are accelerating faster than ever, leading to a direct threat to global agricultural production and the raw materials that drive business.
- Projects that prioritize ecosystem restoration are key to future investments.
- Ecosystem services like clean air, water, and soil must be incorporated into measurable commercial parameters.
Institutions such as the European Investment Bank have piloted projects focusing on biodiversity. A great example to learn from is shown through their nature-backed bonds designed to incentivize investments into ecosystem preservation.
3. Embrace technological tools for ESG
Artificial intelligence and predictive analytics will be key enablers of effective ecological risk management. The financial results of environmental degradation, whether felt through disrupted supply chains or liabilities, can be forecasted using tools such as predictive modeling.
For example, Google Cloud offers ESG risk detection tools that empower institutions to monitor supply chains and report compliance with environmental regulations like the European Corporate Sustainability Due Diligence Directive (CSDDD).
A How-to Guide for Entrepreneurs: Navigating Ecological Risk
As entrepreneurs, especially if you’re scaling your business, it’s essential to align your growth strategies with sustainable financial practices. Here’s how:
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Conduct an ecological risk audit
Assess your business’ dependency on environmental resources. Use online frameworks like the BNP Paribas biodiversity self-assessment tool, which can help you determine specific nature-based risks and your impact. -
Seek green financing
Partner with banks and angel investors that offer sustainability-linked loans (SLLs) and green bonds. Read about biodiversity finance solutions to ensure your financial partners are aligned with ESG frameworks. -
Educate your team on sustainability
Embed ESG factors at all levels of planning, from sourcing to financing. Consider partnering with organizations like the Cambridge Institute for Sustainability Leadership, which offers hands-on workshops and programs focused on integrating climate, social, and environmental considerations into your business strategy. -
Be proactive, not reactive
Waiting for regulations to force you into action can be costly. By future-proofing your business today, you can achieve long-term savings and a sterling reputation with consumers and investors. -
Innovate and adapt
Whether it's adopting new technology, finding alternatives for raw materials, or even reshaping your products to address a future green economy, companies that leap forward will thrive. Tools like the F/MS Business Model Canvas Generator offer a great way to embed sustainability directly into your business model.
Common Challenges and Mistakes Financial Leaders (and Entrepreneurs) Should Avoid
- Too much reliance on "climate offsets"
Solely focusing on carbon offsets isn’t sufficient to mitigate ecological risk. Without systemic changes to their portfolios, financial institutions could still face liability challenges. - Siloed risk evaluation
Assessing climate and ecological risks as separate categories is outdated. These risks ripple throughout value chains and must be modeled within the financial bottom line. - Failure to educate stakeholders
Whether it’s the boardroom or aspiring entrepreneurs, failing to invest in ESG education creates a chasm in understanding. Ensure all teams are upskilled on the latest developments in climate finance solutions.
Deep Insights from My Entrepreneural Journey
As a serial entrepreneur and advocate for women's representation in tech, I’ve taken several lessons from navigating ecological risks in the commercial sector:
- Networks matter: Working within EU-backed innovation hubs like Yes! Delft has helped my startups secure sustainability-oriented funding.
- Think multi-dimensionally: Blending neuroscience, business acumen, and regulatory knowledge has enabled me to assess risks and maximize innovation.
- Align with global initiatives: Participating with OECD Blockchain Forums has taught me the global market will reward more policy-aligned ventures in the long run.
Conclusion
Smart businesses in 2024 and beyond must consider ecological risk an integral part of their operational and strategic frameworks. For financial institutions, this means advancing tools, driving ecological teamwork, and facilitating intentional partnerships between entrepreneurs and sustainability initiatives. For entrepreneurs, the message is clear: embrace ecological risks and use them as a lever to drive strategic innovation and investor interest.
Through education, collaboration, and the adoption of predictive technology, we can accelerate progress toward a future where the financial and environmental sectors work as one. As leaders, how we measure risk today will dictate the opportunities tomorrow. Don't wait, be the trailblazer your sector needs.
FAQ
1. Why are ecological risks considered commercial risks today?
Ecological risks like biodiversity loss, extreme weather, and ecosystem collapse directly impact industries and economies by disrupting supply chains and causing financial instability. Financial institutions must address these risks to maintain productivity and meet regulatory requirements. Learn more from NGFS
2. How much of the global economy is dependent on nature?
According to the NGFS, approximately $44 trillion, or over half of the global GDP, is either moderately or heavily dependent on nature and its ecosystems, making ecological health crucial for economic stability. Learn more from the FCA report
3. What is the role of financial firms in addressing ecological risks?
Financial firms should integrate environmental risks into risk models, embrace biodiversity financing, and adopt tools like predictive analytics to mitigate liabilities and seize sustainable investment opportunities. Learn more about biodiversity finance solutions
4. How can financial institutions focus on biodiversity financing?
Biodiversity financing includes funding projects like ecosystem restoration and incorporating ecosystem services such as clean air, water, and soil into measurable commercial activities. Institutions like the European Investment Bank are exploring nature-backed bonds for ecosystem preservation. Explore nature-backed bonds at European Investment Bank
5. How is AI transforming ecological risk management in finance?
AI tools enable accurate forecasting of the financial consequences of environmental degradation. Google Cloud, for example, provides ESG risk detection tools to monitor supply chains and ensure compliance with regulations like the European CSDDD. Check out Google Cloud’s ESG risk detection tools
6. What tools can entrepreneurs use to assess ecological risks?
Entrepreneurs can conduct risk audits using tools like the BNP Paribas Biodiversity Self-Assessment Tool to evaluate dependencies on environmental resources. Access BNP Paribas Biodiversity Self-Assessment Tool
7. Is green financing a viable option for businesses?
Yes, green financing offers mechanisms such as Sustainability-Linked Loans (SLLs) and green bonds. Entrepreneurs can find these opportunities through banks or initiatives like Biodiversity Finance Solutions. Explore biodiversity finance solutions
8. What is the TCFD framework?
The Task Force on Climate-Related Financial Disclosures (TCFD) helps companies disclose climate-related risks systematically, facilitating informed decision-making for both financial institutions and businesses. Learn more about TCFD
9. How can businesses future-proof against ecological risks?
Businesses can future-proof through measures like sustainability education, green financing, innovation, and aligning with global initiatives for ESG (Environmental, Social, and Governance) compliance. Learn from Cambridge Institute for Sustainability Leadership programs
10. What common mistakes should financial leaders avoid regarding ecological risk?
Frequent mistakes include over-reliance on climate offsets, not integrating climate and ecological risks, and failing to educate stakeholders on emerging ESG trends and compliance requirements. For better practices, see the lessons from EU-backed projects and international frameworks. Explore initiatives at Yes!Delft
About the Author
Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur. Throughout her startup experience she has applied for multiple startup grants at the EU level, in the Netherlands and Malta, and her startups received quite a few of those. She’s been living, studying and working in many countries around the globe and her extensive multicultural experience has influenced her immensely.
Violetta Bonenkamp's expertise in CAD sector, IP protection and blockchain
Violetta Bonenkamp is recognized as a multidisciplinary expert with significant achievements in the CAD sector, intellectual property (IP) protection, and blockchain technology.
CAD Sector:
- Violetta is the CEO and co-founder of CADChain, a deep tech startup focused on developing IP management software specifically for CAD (Computer-Aided Design) data. CADChain addresses the lack of industry standards for CAD data protection and sharing, using innovative technology to secure and manage design data.
- She has led the company since its inception in 2018, overseeing R&D, PR, and business development, and driving the creation of products for platforms such as Autodesk Inventor, Blender, and SolidWorks.
- Her leadership has been instrumental in scaling CADChain from a small team to a significant player in the deeptech space, with a diverse, international team.
IP Protection:
- Violetta has built deep expertise in intellectual property, combining academic training with practical startup experience. She has taken specialized courses in IP from institutions like WIPO and the EU IPO.
- She is known for sharing actionable strategies for startup IP protection, leveraging both legal and technological approaches, and has published guides and content on this topic for the entrepreneurial community.
- Her work at CADChain directly addresses the need for robust IP protection in the engineering and design industries, integrating cybersecurity and compliance measures to safeguard digital assets.
Blockchain:
- Violetta’s entry into the blockchain sector began with the founding of CADChain, which uses blockchain as a core technology for securing and managing CAD data.
- She holds several certifications in blockchain and has participated in major hackathons and policy forums, such as the OECD Global Blockchain Policy Forum.
- Her expertise extends to applying blockchain for IP management, ensuring data integrity, traceability, and secure sharing in the CAD industry.
Violetta is a true multiple specialist who has built expertise in Linguistics, Education, Business Management, Blockchain, Entrepreneurship, Intellectual Property, Game Design, AI, SEO, Digital Marketing, cyber security and zero code automations. Her extensive educational journey includes a Master of Arts in Linguistics and Education, an Advanced Master in Linguistics from Belgium (2006-2007), an MBA from Blekinge Institute of Technology in Sweden (2006-2008), and an Erasmus Mundus joint program European Master of Higher Education from universities in Norway, Finland, and Portugal (2009).
She is the founder of Fe/male Switch, a startup game that encourages women to enter STEM fields, and also leads CADChain, and multiple other projects like the Directory of 1,000 Startup Cities with a proprietary MeanCEO Index that ranks cities for female entrepreneurs. Violetta created the "gamepreneurship" methodology, which forms the scientific basis of her startup game. She also builds a lot of SEO tools for startups. Her achievements include being named one of the top 100 women in Europe by EU Startups in 2022 and being nominated for Impact Person of the year at the Dutch Blockchain Week. She is an author with Sifted and a speaker at different Universities. Recently she published a book on Startup Idea Validation the right way: from zero to first customers and beyond, launched a Directory of 1,500+ websites for startups to list themselves in order to gain traction and build backlinks and is building MELA AI to help local restaurants in Malta get more visibility online.
For the past several years Violetta has been living between the Netherlands and Malta, while also regularly traveling to different destinations around the globe, usually due to her entrepreneurial activities. This has led her to start writing about different locations and amenities from the POV of an entrepreneur. Here’s her recent article about the best hotels in Italy to work from.
About the Publication
Fe/male Switch is an innovative startup platform designed to empower women entrepreneurs through an immersive, game-like experience. Founded in 2020 during the pandemic "without any funding and without any code," this non-profit initiative has evolved into a comprehensive educational tool for aspiring female entrepreneurs.The platform was co-founded by Violetta Shishkina-Bonenkamp, who serves as CEO and one of the lead authors of the Startup News branch.
Mission and Purpose
Fe/male Switch Foundation was created to address the gender gap in the tech and entrepreneurship space. The platform aims to skill-up future female tech leaders and empower them to create resilient and innovative tech startups through what they call "gamepreneurship". By putting players in a virtual startup village where they must survive and thrive, the startup game allows women to test their entrepreneurial abilities without financial risk.
Key Features
The platform offers a unique blend of news, resources,learning, networking, and practical application within a supportive, female-focused environment:
- Skill Lab: Micro-modules covering essential startup skills
- Virtual Startup Building: Create or join startups and tackle real-world challenges
- AI Co-founder (PlayPal): Guides users through the startup process
- SANDBOX: A testing environment for idea validation before launch
- Wellness Integration: Virtual activities to balance work and self-care
- Marketplace: Buy or sell expert sessions and tutorials
Impact and Growth
Since its inception, Fe/male Switch has shown impressive growth:
- 5,000+ female entrepreneurs in the community
- 100+ startup tools built
- 5,000+ pieces of articles and news written
- 1,000 unique business ideas for women created
Partnerships
Fe/male Switch has formed strategic partnerships to enhance its offerings. In January 2022, it teamed up with global website builder Tilda to provide free access to website building tools and mentorship services for Fe/male Switch participants.
Recognition
Fe/male Switch has received media attention for its innovative approach to closing the gender gap in tech entrepreneurship. The platform has been featured in various publications highlighting its unique "play to learn and earn" model.
