Read our reaction to the news from the once-in-a-decade COP15 UN biodiversity summit.
“The outcome of COP15 should make financial regulators sit up and listen,” according to Andy Howard Global Head of Sustainable Investment, who attended COP15 in Montreal, Canada, last week.
The final deal, the Kunming-Montreal pact announced today, has seen nations reach a series of historic agreements to halt and reverse biodiversity loss and to protect land and oceans by 2030. The agreement was reached by almost 200 countries at the summit and also commits to ending human-induced extinctions of known threatened species, such as rhinos and gorillas.
Other key elements include wording around respecting indigenous and traditional territories and emphasis on conservation management, reforms of environmentally harmful subsidies and, importantly, nature disclosures for businesses.
“Nature risk is an integral factor to investment risk and returns, and there is a clear opportunity in aligning financial flows towards nature positive goals. There is a lot more work to be done, but the COP15 global deal for nature is a signal the financial community cannot ignore,” Andy Howard said.
It is stated governments should ensure large and transnational companies disclose “their risks, dependencies and impacts on biodiversity”.
Ambition is there in the COP15 agreement. Now we must all deliver on it.
The Biodiversity COP15 has seen government officials, business leaders, non-governmental actors and financial institutions gather in Montreal, Canada, for the past 10 days to try to agree on a new global framework for nature.
An agreement was reached in the early hours of the final day on December 19 – indicative of the protracted negotiation process. The agreement itself sets out the overarching global goal to reverse biodiversity loss by 2030, which has been likened to the Paris Agreement reached in 2030. The so-called ”30 by 30” goal sets out a commitment to protecting 30% of the world’s land and sea by 2030.
The inclusion of this text in the final agreement is a meaningful development and shows strong ambition on global nature action. The text also sets out a recognition of the importance of indigenous territories and local communities. With over a third of the planet’s richest biodiversity areas set in indigenous lands, this explicit inclusion is critical in delivering a just nature transition.
While there is cause to celebrate the agreement, this is not the first global agreement that we have seen on nature. Countries came together just over a decade ago to create the previous 10-year plan for nature, which set out 20 targets on nature protection and conservation, known as the Aichi Biodiversity Targets. Almost none were achieved.
It is imperative that this global agreement serves as a catalyst for concrete action at national and sub-national action – much as the Paris Agreement in 2015 has done on climate, with over 80% of the world’s emissions now subject to net-zero decarbonisation targets.
This should send a powerful signal to the corporate and financial industry to continue efforts to measure and price nature-related risks. Initiatives such as the Taskforce for Nature-Related Financial Disclosures will play an important role in further catalysing and standardising this disclosure as it reaches its final iteration next year.
There has also already been significant action at the national and regional level. Examples include EU legislation on deforestation, which was adopted earlier this month. This will seek to ensure that agricultural products that are consumed in the European Union have not contributed to deforestation in producer countries, with similar policies in train in the UK and US.
Financing nature will be key. COP15 builds on progress made at COP27 this year in Egypt, which saw recognition of the importance that nature-based solutions will need to play to meet our climate goals - with a big focus on voluntary carbon markets and ending deforestation.
Nature-based solutions are one of the most cost-effective carbon reduction and removal mechanisms that we have. If they are designed and implemented responsibly, they can also have powerful benefits for nature and biodiversity, as well as for the communities the live in and around the projects.
Many nations have already included nature-based solutions in their national climate action plans – called Nationally Determined Contributions or NDCs.
There is also growing interest from the corporate sector as a key lever to meet their own net zero pledges. We are set to see a 15-fold increase in offset demand by 2030, with a parallel increase in demand for the natural capital assets that generate those offsets.
Climate is starting to unlock significant flows for nature. There is a real opportunity to translate policy objectives and long-term targets into investment at scale, and for the private sector to play a critical role in delivering this.