From Basel to Biodiversity: An Ex-Central Banker’s Take on Nature Risk

Hear from Hirotaka Hideshima, former central banker and member of the TNFD, as we explore the parallels between financial risk, nature risk and regulation.

What happens when a central banker steps into the world of nature risk? Well, they can see parallels between financial risk and nature risk that aren't obvious to others. For example, just as the global financial crisis exposed systemic vulnerabilities in banking, nature loss poses systemic risks that today's models and disclosures struggle to capture.

And although the Basel framework and the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations are very different, they do share one key underlying objective — that is, to internalize externalities that markets fail to price. In this episode, we explore what a 30-year career in financial regulation can tell us about nature risk, including:

• Why risk professionals must consider the long-term materiality of nature risk, even when short-term impacts may appear limited;
• Practical first steps for incorporating nature into credit risk processes and operational resilience planning; and
• The role of qualitative judgment when models cannot fully capture environmental externalities.

To find out more about the Sustainability and Climate Risk (SCR®) Certificate, follow this link: https://www.garp.org/scr

For more information on climate risk, visit GARP's Global Sustainability and Climate Risk Resource Center: https://www.garp.org/sustainability-climate

If you have any questions, thoughts, or feedback regarding this podcast series, we would love to hear from you at: climateriskpodcast@garp.com

Links from today's discussion:

• Taskforce on Nature-related Financial Disclosures (TNFD) homepage: https://tnfd.global/
• Basel Committee on Banking Supervision (BCBS) homepage: https://www.bis.org/bcbs/index.htm
• World Economic Forum (WEF) Global Risks Report 2025: https://www.weforum.org/publications/global-risks-report-2025/

Speaker's Bio

Hirotaka Hideshima, Fellow, Global Intelligence & Sustainability Unit, Dai-ichi Life Holdings

Before joining Dai-ichi Life, Hirotaka served as Counsellor on Global Strategy to the President and Board of Directors at the Norinchukin Bank, where he became actively involved in the work of the Taskforce on Nature-related Financial Disclosures.

Hirotaka spent over 30 years at the Bank of Japan, where he represented the Bank on the Basel Committee on Banking Supervision, co-chaired the development of Basel III's definition of regulatory capital, and helped design the G-SIB assessment framework.