COP15 is taking place in Montreal, Canada, from 5 December to 17 December, more than two years after the summit was meant to have taken place. Delegates from across the globe are meeting to produce a Paris Agreement-style deal for nature, resulting in an end to the degradation of biodiversity and the acceleration and mainstreaming of work to restore ecosystems and habitats.
As nations formulate a new set of global biodiversity targets at the landmark Conference of the Parties, nature-smart finance and business practices are swiftly integrating into the business-world.
The trajectory of the global policy environment is reflected in nature-related standards. Recently, the following standards and accounting methodologies have emerged:
The Taskforce for Nature-related Financial Disclosure (TNFD) is perhaps the most frequently cited, in part, due to its successor, the Task Force on Climate-related Financial Disclosures (TCFD), which is used by many financial and non-financial organisations to report on the ways in which environmental impacts are considered within their business strategy.
The Partnership for Biodiversity Accounting Financials (PBAF) is a comprehensive approach, focused on biodiversity accounting for financial professionals. It offers practicable steps for Introducing biodiversity into investment decisions. Their PDF with frequently asked questions offers helpful answers to the relevance of biodiversity for investors.
The Greenhouse Gas Protocol reported on the new Land Sector and Removals Guidance in September 2022, related to how companies account for, and report on, their greenhouse gas inventories from land use/change, carbon removals and storage, and biogenic products. The project will develop internationally accepted guidance on corporate GHG accounting on the above topics. The new guidance is expected to be used by companies to:
- Inform mitigation strategies by understanding the GHG emissions/removals impacts of land use, land use change, bioenergy, and carbon removal activities
- Set targets and track performance by including the above activities in GHG targets
- Report GHG inventories including GHG emissions and carbon removals and report progress toward GHG mitigation goals
The Science-based Targets Network (SBTN) first release of technical guidance for companies to set science-based targets for nature opened for public consultation in October 2022. The guidance will complement science-based targets for climate, which help companies mitigate their GHG emissions. The science-based targets for nature include freshwater, land, ocean, and biodiversity.
Within Europe, policymakers have integrated the concept of biodiversity into their new framework programme for research and innovation, ‘Horizon 2020’, providing a new narrative involving biodiversity and ecosystem services aligned with goals of innovation for growth and job creation, and with a potential opening for transformational pathways towards sustainable societal development.
Biodiversity features as a key theme in the United Nations’ 2030 Agenda for Sustainable Development, with both governments and private sector organizations being called upon to realise Sustainable Development Goals (SDG) 14 and 15. SDG 14 is devoted to “conserve and sustainably use the oceans, seas and marine resources”. While SDG 15 is devoted to “protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss”.
The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) issued the global assessment report on biodiversity and ecosystem services in 2019, highlighting that biodiversity is declining in every region and issues an urgent call to halt and reverse the unsustainable use of nature.
Businesses have been showing up on an unprecedented scale for climate COPs at Glasgow and in Sharm El Sheikh. Similarly, the business presence and voice at and around CBD COP15 is extremely evident – especially compared with 2010. We may expect businesses to push for a weaker agreement, as fossil fuel interests have at UN climate conferences. But this does not seem to be the case.
Global collaborative initiative Business for Nature has convened more than 330 businesses and financial institutions from 52 countries to engage with policymakers on matters relating to the private sector’s impacts on biodiversity. It wants to see a strong mission statement for a nature-positive world.
Investors are also coming under increasing scrutiny over how far their activities support a pathway to Net Zero emissions and provide measurable benefits to the environment and society and, as such, are committing to long-term targets to decarbonize their assets and rethinking their portfolio allocation strategies to achieve this.
This next phase of integrating nature and the economy builds on the foundation of ESG work, which has required market participants to shift processes, and mindsets, in a short space of time. It is important to acknowledge how far market participants have come in embedding environmental considerations into financial practices. These changes have come from change leaders and smaller players, seasoned executives and newest recruits. Our increasing debt to Nature puts markets at risk, requiring fast-paced action which many are ready to address, despite the complexity.
COP15 will further shine a light on the financial market to meet the demand for green impact investing, the momentum behind Nature-based Solutions provides a window of opportunity to scale much-needed financial flows to these activities.
