In recent years, climate action has been the target that has received the lion’s share of attention across financial and regulatory sectors
Since the Paris Climate accord in 2015, and arguably before, climate action has been the target that has received the lion’s share of attention across financial and regulatory sectors. Increasingly, this is no longer the case. Over the past year in particular, conversations around biodiversity and protection of nature have, alongside climate action, risen to the forefront of the environmental agenda.
This has been reflected in investor action. Recent months have seen an explosion in research groups, task forces, investor coalitions and investor commitments.
Momentum gathers behind biodiversity
To date, 55 financial institutions with over €9 trillion EUR in assets under management have signed the Finance for Biodiversity Pledge. This pledge reflects a commitment to set targets, measure results and publicly disclose impact on biodiversity.
Similarly, plans were recently revealed for a Nature 100+, to be launched before the end of 2021, which will aim to replicate the Climate Action 100+ by providing a collaborative space for investor engagement on issues of nature and biodiversity.
With great momentum, must come great data
Closely mirroring the climate action investor movement, as momentum gathers behind biodiversity in investing, so do calls for quality data on how companies interact with nature.
The PRI has launched a consultative scoping study in an attempt to understand whether existing data meets investor requirements, and assess the challenges and opportunities facing the biodiversity data landscape.
A major step forward could come in the form of the The World Benchmarking Alliance’s new benchmark for companies with the biggest impacts on nature, expected to cover 500-1,000 companies, focussed on the agricultural, forestry and tourism sectors.
Prize at the end of the tunnel
The task may appear large, but Nicky Chambers, Programme and Impact Director for Global Canopy, argues that the rewards may be equally sizeable.
Writing in Responsible Investor, she explains, “To avoid risks spiralling out of control, immediate action is needed. Finance sector leadership is key to unlocking progress at scale. The size of the prize is vast: by 2030, nature-positive solutions could create $10trn in business opportunities and 395 million new jobs, according to the World Economic Forum.”
The time for action is now
According to UN Environment, none of the 20 biodiversity targets the world set for itself a decade ago were met by their 2020 deadline.
The need for action on biodiversity can therefore no longer be seen as a ‘nice-to-have’. It is a ‘must-have’, and the commitments and initiatives outlined above mark only the start of the journey - a journey that will involve, among other things, dealing with an agricultural sector that is both highly dependent and highly impactful on nature, and a complete shift away from deforestation.
Hope ahead of COP15
There is hope that the COP15 for biodiversity, scheduled for this October, will do for biodiversity what Paris did for net-zero. What must be avoided in the financial and regulatory spheres, is the same time gap between commitment and meaningful action.
On this point, there are positive signs. In the UK, for example, there are calls for the upcoming recommendations from the Taskforce on Nature-related Financial Disclosure to be embraced similarly to the TCFD, which have been at the heart of new regulations.
Whatever happens, it is clear to see that biodiversity is no longer the forgotten cousin of climate action in investment.
Since the Paris Climate accord in 2015, and arguably before, climate action has been the target that has received the lion’s share of attention across financial and regulatory sectors. Increasingly, this is no longer the case. Over the past year in particular, conversations around biodiversity and protection of nature have, alongside climate action, risen to the forefront of the environmental agenda.
This has been reflected in investor action. Recent months have seen an explosion in research groups, task forces, investor coalitions and investor commitments.
Momentum gathers behind biodiversity
To date, 55 financial institutions with over €9 trillion EUR in assets under management have signed the Finance for Biodiversity Pledge. This pledge reflects a commitment to set targets, measure results and publicly disclose impact on biodiversity.
Similarly, plans were recently revealed for a Nature 100+, to be launched before the end of 2021, which will aim to replicate the Climate Action 100+ by providing a collaborative space for investor engagement on issues of nature and biodiversity.
With great momentum, must come great data
Closely mirroring the climate action investor movement, as momentum gathers behind biodiversity in investing, so do calls for quality data on how companies interact with nature.
The PRI has launched a consultative scoping study in an attempt to understand whether existing data meets investor requirements, and assess the challenges and opportunities facing the biodiversity data landscape.
A major step forward could come in the form of the The World Benchmarking Alliance’s new benchmark for companies with the biggest impacts on nature, expected to cover 500-1,000 companies, focussed on the agricultural, forestry and tourism sectors.
Prize at the end of the tunnel
The task may appear large, but Nicky Chambers, Programme and Impact Director for Global Canopy, argues that the rewards may be equally sizeable.
Writing in Responsible Investor, she explains, “To avoid risks spiralling out of control, immediate action is needed. Finance sector leadership is key to unlocking progress at scale. The size of the prize is vast: by 2030, nature-positive solutions could create $10trn in business opportunities and 395 million new jobs, according to the World Economic Forum.”
The time for action is now
According to UN Environment, none of the 20 biodiversity targets the world set for itself a decade ago were met by their 2020 deadline.
The need for action on biodiversity can therefore no longer be seen as a ‘nice-to-have’. It is a ‘must-have’, and the commitments and initiatives outlined above mark only the start of the journey - a journey that will involve, among other things, dealing with an agricultural sector that is both highly dependent and highly impactful on nature, and a complete shift away from deforestation.
Hope ahead of COP15
There is hope that the COP15 for biodiversity, scheduled for this October, will do for biodiversity what Paris did for net-zero. What must be avoided in the financial and regulatory spheres, is the same time gap between commitment and meaningful action.
On this point, there are positive signs. In the UK, for example, there are calls for the upcoming recommendations from the Taskforce on Nature-related Financial Disclosure to be embraced similarly to the TCFD, which have been at the heart of new regulations.
Whatever happens, it is clear to see that biodiversity is no longer the forgotten cousin of climate action in investment.
