Climate action failure, biodiversity loss and infectious diseases counted as the top three risks in the World Economic Forum’s Global Risks Report. It is imperative that leaders and citizens alike adopt a systems view for the economic and societal transformation needed today so we build the world we want to inhabit in 2030.
In 2015, world leaders came together for an ambitious commitment on fighting climate change to keep the world on a 1.5C pathway. In addition to governments that committed to the Paris Agreement, businesses aligned their plans and commitments to this vision. Companies with a combined revenue of over $11.4 trillion (equivalent to more than half of US GDP), are now pursuing net zero emissions by the end of the century, majority by 2050.
A similar public-private ambition is needed as leaders come together in Kunming, China, for agreeing on the post-2020 Global Biodiversity Framework. Last week, the UN Convention on Biological Diversity (CBD) Secretariat released its first draft of the framework, inviting input and engagement from all sectors of society. Businesses have an especially important role to play in fighting biodiversity loss and ensuring continued ecosystem services such as carbon sequestration, clean water, food security etc.
Here are five things you need to know:
1. What Is the Post-2020 Global Biodiversity Framework?
The 2011-2020 Aichi Plan failed to achieve a single biodiversity target. Over the past two years, scientists, experts, and government officials have been working on a framework to be adopted in Kunming China at the UN CBD COP15 that will set targets on how we manage nature through to 2030. While the targets, like Paris Agreement, are not binding for businesses – they signal the government ambition and prioritization of activities to fight the crisis of biodiversity loss.
By aligning their strategy and operations to the framework, businesses secure their future as they all rely on nature and its ecosystem services. For example, according to the Food and Agriculture Organization more than three-quarters of the world’s food crops rely at least partially on pollination, and global crop production, with an annual market value of between $235 billion and $577 billion, is at risk.
2. Stopping the Use of Public Money to Harm Public Goods
Governments around the world have provided approximately $530 billion per year in public subsidies and market price support for farmers, but only 15% of these incentives support sustainable outcomes, while the majority may spur the overuse of fertilisers, among other perverse effects.
Target 18 of the Framework commits governments to redirect, repurpose, reform, or eliminate incentives harmful for biodiversity in a just way by at least $500 billion per year across sectors.
3. Business Impact and Dependency on Nature
Target 15 of the framework asks all businesses to assess and report on their dependencies and impacts on biodiversity, reducing their negative impacts at least by half. The G7 finance ministers have endorsed the launch of the Taskforce on the Nature-related Financial Disclosures (TNFD) which has triggered many big financial services and investor companies to strengthen the reporting on biodiversity similar to climate mandated by TCFD. Which means the cost of capital for any businesses not conducting a materiality assessment against nature will significantly suffer.
The Forum’s Nature Risk Rising Report goes more into detail on what companies can do.
4. Financing for Nature
Target 19 of the framework asks for increased financial resources to at least $200 billion per year, with at least $10 billion increase to developing countries.
According to the State of Finance for Nature report, a total investment in nature of $8.1 trillion is required by 2050 to tackle the triple planetary crisis of climate change, nature loss and land degradation. Currently private finance accounts for only 14% of nature-based solutions. There is both a need and potential to grow this by valuing natural capital just the way that we value financial, physical, and human capital. Strengthening market mechanisms to help fight climate change and nature loss, China launched its national carbon emission trading scheme recently with $32 million changing hands. Another example is HSBC’s launch of an asset management venture with the ambition to create the world’s largest dedicated natural capital asset management company. Unilever announced its Euro1bn Nature and Climate fund.
There is need for great innovation from the business sector, and a consistent regulatory environment that supports market mechanisms with just safeguards for protecting and sustainably managing nature.
5. Positive Ambition Loop of Government Policies and Business Leadership
The framework is a first draft and there is scope to be more ambitious and create a truly transformative framework, including by adopting a clear and ambitious global goal for nature to halt and reverse nature loss by 2030 and create a nature positive world. This global goal is being called for by many non-state actors and recognized by over 88 heads of states in the Leaders Pledge for Nature.
If adopted in the framework, it would send a strong signal to the business community that regulatory change is coming and business as usual is not an option anymore, therefore encouraging the uptake of nature-positive business models and the redirection of investments and business decision-making processes around the protection, restoration and sustainable use of nature and natural resources.
The UN CBD Secretariat is now inviting inputs from businesses and civil society organizations to ensure it has a cross-sectoral implementation plan and public-private resources. Business For Nature is working to join up business from across sectors and geographies to input into the first draft. Over 900 companies have signed up to the call to action “Nature is Everyone’s Business”, signalling to governments to advance ambitious policies for a net-zero, nature positive economy.
Akanksha Khatri, Head, Nature and Biodiversity, World Economic Forum