SUSTAINABILITY AGENDA
BIODIVERSITY TRENDS
Kiran Dhanapala highlights global conservation efforts
Sustainability professional Andrew Winston sees climate change, biodiversity loss and inequality as the three existential challenges that are likely to worsen.
Biodiversity loss is a silent crisis. Between 1970 and 2020, wildlife populations including marine resources reduced by 73 percent, the World Wildlife Fund’s (WWF) Living Planet Report notes.
It is an erosion of the foundations of our economies, livelihoods, quality of life and so on. The interconnectedness of ecosystems, their little-known protective ecosystem services and our dependencies on these systems mean that we are all affected.
Professional services firm PwC’s research finds that some 55 percent of global GDP (about US$ 58 trillion) is ‘moderately dependent’ or ‘highly dependent’ on nature and the ecosystem services it provides, which are now being increasingly threatened by climate change.
Although people’s survival depends on nature and vice versa, the UNEP finds that most private sector finance impacts negatively on nature.
According to the United Nations Environment Programme, this ‘nature negative’ finance totals about five trillion dollars annually, or is 140 times larger than the 35 billion dollars invested in ‘nature positive’ solutions.
Understanding this is necessary to actively create better screening in the financial sector.
Green is increasingly being considered the new gold, and governments and businesses are now recognising this fact. Governments (except the US) agreed in 2022 to reverse biodiversity loss by 2030 with a call to businesses to contribute to the effort.
The Kunming-Montreal Global Biodiversity Framework was adopted in December 2022 at the 15th Conference of Parties of the UN Convention on Biological Diversity (COP 15). And now, the first Trellis State of Biodiversity and Business 2024 report is showing that global business is beginning to respond to this challenge.
It presents survey findings by sustainability professionals in large and medium size organisations on the effects they have on nature – particularly the diversity of plant and animal life. Its 106 respondents are mostly North American and to a lesser extent European with only four percent from Asia.
Unsurprisingly, those in Europe prioritising nature have done more extensive evaluations of their impact and are trying to redress the harm identified. This is mainly due to strong EU regulations – especially the European Union’s Corporate Sustainability Reporting Directive (CSRD), which mandates corporate disclosure on many issues including biodiversity for those operating in Europe. The US has no regulations on business understanding or addressing the impact on biodiversity and that’s unlikely to change in the near future.
Challenges for surveyed entities to do more on biodiversity are many…
These include reducing greenhouse gases (GHGs) and implementing other sustainability objectives; a lack of understanding of biodiversity and the importance of nature based solutions; insufficient in-house expertise; absence of consistent definitions, metrics and reporting standards; the lack of management commitment to nature issues; and no evidence of effectiveness or financial return from potential actions.
Quantifying biodiversity loss is more complex than with carbon emissions. Currently, there are several frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD) that can be used.
While much remains to be developed, the EU’s regulatory push will help firm up standardised approaches. A minimum approach by businesses can focus on science based ecosystem preservation in relevant areas.
The World Economic Forum (WEF) notes that finance is critical for unlocking a nature positive economy. And the WEF estimates that US$ 2.7 trillion will be the average annual investment needed by 2030.
And the annual average global financing gap of 711 billion dollars needs to be filled to protect, restore and enhance nature. More biodiversity finance is required from all sources to halt and reverse biodiversity loss by 2030.
To leverage this investment, there are several global initiatives, tools, market based instruments and mechanisms, which are designed to incentivise conservation, preservation and active regeneration of nature.
A few global biodiversity initiatives include the China and UNDP led Kunming Biodiversity Fund to support conservation projects, as well as the UN’s Pact for the Future, for environmental policy initiatives including fossil fuel transition, halting plastic and chemical pollution, and safeguarding biodiversity.
Biodiversity or nature related instruments and mechanisms that are trending include green loans, conservation trust funds, green and blue bonds, biodiversity credits, blue carbon credits and debt for nature swaps.
It’s important to focus on impact and quality, and these may be achieved by following a more integrated and holistic approach to the economy as a whole. Impact measurement, monitoring and evaluation will be the keys to maintaining quality and proving impact.
