The global summit on biodiversity is a critical moment in the struggle to preserve natural ecosystems.
The 16th meeting of the Conference of the Parties to the Convention on Biological Diversity (COP16) will be held Oct. 21-Nov. 1 in Cali, Colombia. With just six years remaining to achieve global targets for biodiversity, this is a critical moment.
Business leaders can expect increased attention, strengthened government strategies and ramped up private sector finance.
Growing engagement from the private sector
Between 700 and 1,000 companies showed up in Montreal for COP15 in 2022, marking the first significant engagement from the private sector in a biodiversity COP.
The outcomes at Montreal, including The Biodiversity Plan, “sent a clear message to all large and transnational businesses and financial institutions to get ready to assess and disclose risks, dependencies and impacts on biodiversity,” said Eva Zabey, CEO of Business for Nature.
All signs point toward increased engagement at COP16. Over 130 companies representing $1.1 trillion in revenue have already called for renewed policy ambition to strengthen the incentives, legislation and regulations to drive corporate action on nature.
In the past year, over 400 companies have adopted The Taskforce on Nature-Related Financial Disclosure (TNFD) reporting recommendations, mandatory nature disclosures have gone into effect for companies doing business with the EU and hundreds of financial institutions have endorsed investor initiatives to engage companies on nature.
Expect to see a flurry of new nature-related targets and strategies in the coming months.
Expect to see a flurry of new nature-related targets and strategies in the coming months. Advanced companies such as Holcim, Tetra Pak, ENGIE, GSK and Kering have already carved out paths. Commitments are not acts, however. Whether they are effective in halting and reversing biodiversity loss remains to be seen.
Governments must boost national biodiversity strategies
COP16 serves as a deadline for countries to revise and update their National Biodiversity Strategies and Action Plans (NBSAPs) to align with The Biodiversity Plan (formerly called the Kunming-Montreal Global Biodiversity Framework). These plans are the primary tool for each country to formalize the role and responsibilities of non-state actors, including businesses. That means increased regulation and pressure on corporations and financial institutions:
- Austria has committed to reducing the import of biodiversity-damaging products.
- China said it will restrict economic activities to fall within ecological limits.
- Spain has set goals to reform, redirect or eliminate 50 percent of identified harmful subsidies by 2025.
- And the EU’s Nature Restoration Law originated in the EU’s Biodiversity Strategy for 2030.
Of the 196 parties to the Convention on Biological Diversity, only a dozen have submitted updated plans. It’s unclear how many countries will pursue stricter policies and regulations for corporations and how stringent they will be.
Major opportunities for private sector nature finance
We are not nearly on track to bridge the $700 billion biodiversity finance shortfall by 2030 and recent negotiations ended in disarray.
The Biodiversity Plan’s nature finance target (Target 18) aims to mobilize at least $200 billion per year from domestic, international, public and private resources. The remaining $500 billion per year will come from the reduction of incentives and subsidies that harm biodiversity (Target 19).
The U.N. climate and biodiversity agendas are becoming more aligned than ever before.
As an initial step, countries committed to increasing international funding for nature to at least $20 billion annually by 2025. At the start of this year, that number had reached only $247 million.
Still, many companies seem ready to take action. “Companies and investors are increasingly aware that investing in natural capital can deliver benefits for both climate and biodiversity,” said Charlotte Kaiser, head of impact finance at BTG Pactual Timberland Investment Group. “The U.N. climate and biodiversity agendas are becoming more aligned than ever before. And mobilizing investment for a sustainable bioeconomy is emerging as a priority topic globally, particularly within Latin America.”
It’s clear that governments cannot achieve these goals on their own. The private sector has a critical role to play in leveraging private finance, promoting blended finance and encouraging investment through impact funds and other instruments.
“Trends are pointing toward COP16 as one of the most important moments for policymakers, the private sector and the nonprofit community to engage on nature finance this year,” said Kaiser.
This article originally appeared on GreenBiz.com as part of our partnership with GreenBiz Group, a media and events company that accelerates the just transition to a clean economy.
Featured image: Cali, Colombia
