Investors are calling on governments to require companies to assess and disclose their nature-related risks and impacts, and also offer incentives to maximise mobilisation, in a bid to align financial flows with the Global Biodiversity Framework (GBF).
The latest paper from the Finance for Biodiversity Foundation (FfB Foundation) – Aligning Financial Flows with the Global Biodiversity Framework: Translating Ambition into Implementation – advocates for a comprehensive ‘whole-of-government’ strategy, urging governmental bodies, regulators, central banks and financial supervisors to mobilise voluntary action and commitments from the private sector.
Developed by the Public Policy Advocacy working for the FfB Foundation, the paper offers four recommendations, 13 actions and concrete global examples of successful implementation, focusing on Targets 14, 15, 18 and 19 of the GBF.
“This is a powerful call from investors for governments to strengthen, broaden and accelerate their national biodiversity policies and strategies,” said Emine Isciel, head of climate and environment at Storebrand Asset Management, and co-chair of the Public Policy Advocacy working group.
“To protect both biodiversity and the economy, governments must enact policies to support investor action. Never has the need for a bold, effective and coordinated response on nature been more pressing, and we urge governments to heed these calls and take action ahead of COP16.”
The four key recommendations from the report are:
- Require companies and financial institutions to assess, monitor and disclose their nature-related risks, impacts, dependencies and opportunities
- Mandate Nature Transition Plans based on sectoral transformation pathways, and foster collaborative commitments
- Actions from central banks and supervisors
- Create economic incentives for businesses and financial institutions to maximise the mobilisation of private finance.
By fostering innovation, aligning incentives and setting clear boundaries, the paper argues that governments can steer sectoral pathways towards reducing negative impacts, increasing positive impacts and catalysing private finance at scale to bridge the current biodiversity finance gap.
However, the FfB Foundation also recognised that countries may be at different stages of development and that there was no one-size-fits-all approach. How the measures are implemented are expected to vary according to national circumstance.
“The agreement reached at COP15 in Montreal sent a strong signal about the importance and urgency of tackling biodiversity loss alongside climate change. Transformation across a range of economic sectors will be required to ensure resilient economies alongside human and planetary health. Governments should take steps to create an enabling environment for investors to effectively manage their nature-related risks and opportunities,” added Sonya Likhtman, engagement and stewardship, Federated Hermes, and co-chair of the Public Policy Advocacy working group.
“We hope these recommendations will support the much-needed shift from ambition to implementation and look forward to continuing the dialogue with key stakeholders in the run-up to COP16.”
