Alongside the UN’s Climate Conference, which this year will convene for its 29th summit, the UN also convene a conference on biodiversity. Last year’s UN Biodiversity Conference – COP15 – was “a historic moment”, according to Benoit Galaup, ESG analyst at AXA IM, as nearly 200 governments agreed to adopt the Kunming-Montreal Global Biodiversity Framework, aiming to focus efforts on ecosystem and species health.
Here, PA Future looks forward to biodiversity COP16, held in Cali, Colombia, and asks Galaup about his expectations for the upcoming conference.
What are your general hopes and expectations for the 2024 UN Biodiversity Conference (COP16)?
After unprecedented momentum at COP15 – where 196 governments adopted the post-2020 Global Biodiversity Framework – COP 16 is now considered an implementation COP. Businesses and financial institutions are clearly expected to showcase a sustained (or even strengthened) level of mobilisation by demonstrating they are taking concrete action and making robust commitments to contribute to the implementation of the biodiversity plan. Several business coalitions and individual organisations are already currently preparing announcements to meet that expectation (Now for Nature Campaign by Business for Nature, Finance for Biodiversity pledge, etc).
For an investor, COP16 is a catalyst that contributes to accelerating business transition, action on nature and disclosure, which together will support the implementation of several aspects of AXA IM’s biodiversity strategy, including engagement activities and investments in enabling solutions or natural capital.
COP16 will also be an opportunity to identify and promote the latest private sector best practices and progress towards consensual definitions, frameworks, tools and standards. These include, for example, the identification of the conditions to upscale financial instruments for nature (debt for nature swaps, sustainability linked bonds, biodiversity credits, etc.), but also making progress on a clear and consensual definition of what ‘nature positive’ or ‘credible nature transition plan’ means in a business context.
Discussions at COP16 will also focus on biodiversity data and methodologies to assess nature-related dependencies, impacts, risks and opportunities to support financial decision-making. Consensus on these tools and concepts is a key enabler for an investor as they directly support our research and engagement efforts.
How can private capital be mobilised more effectively to address biodiversity loss and promote nature recovery? And how can COP16 help in this regard?
The Global Biodiversity Framework (GBF) embraced the goal of gradually mobilising the $700bn per year needed to preserve and restore biodiversity. The GBF (Target 19) clearly mentions the key role of the private sector as it calls for a substantial and progressive increase in the level of financial resources from all sources, including private ones, together with the mobilisation of at least $200bn per year by 2030 in public and private funding.
The Framework refers to several schemes that businesses and financial institutions can use, including payments for environmental services, green bonds, biodiversity offsets and credits and profit-sharing mechanisms. COP16 is expected to bring clarification and consensus on a number of concepts, instruments and tools – such as biodiversity data and methodology development, taxonomies and blended finance strategies – that should progressively allow to upscale their adoption, increase corporate maturity, action and disclosure and consequently foster the redirection of private capital flows towards the implementation of the GBF. Progress in those areas will eventually help investors to integrate biodiversity challenges into our investment decisions and enhance financing for protection and restoration of biodiversity in line with the ambitions of the GBF.
What are the next steps to ensure commitment to the Global Biodiversity Framework turns into action?
Although business momentum is building fast, biodiversity still remains a niche topic in the private sector and needs to be mainstreamed to the wider business community in order for actions to be upscaled and the GBF target to be met. Investors contribute to this mainstreaming by engaging with their investee companies, specifically on nature and biodiversity in the most material sectors.
As the global biodiversity framework is sector-agnostic, it can be difficult for companies to make it actionable. Therefore, another way to support the mainstreaming of biodiversity is to develop sector-specific tools and guidance that will ‘translate’ the GBF targets to sector-specific contexts and present clear priority actions for companies depending on their context. This sectoral integration is another key theme on the agenda of COP16 and will likely allow for the acceleration of the implementation of the GBF by businesses and financial institutions, probably building on sectoral guidance recently published by several organisations like World Business Council for Sustainable Development, Business for Nature, the World Economic Forum and the Taskforce for Nature-related Financial Disclosures.
The UN Biodiversity Conference is run separately to the Climate Conference, despite the intrinsic link between climate change and the destruction of the natural world. Do you think that is a help or a hindrance when trying to help people correlate the two issues?
I’m convinced that having its own convention, with a regular Conference of the Parties (COP), is beneficial for biological diversity, as climate change is currently more mature, and is better understood and prioritised by most business and financial institutions compared to biodiversity.
Having a dedicated space greatly contributes to increasing awareness, developing maturity, building capacity and identifying solutions specific to biodiversity. This will help businesses and financial institutions recognise biodiversity as an equally urgent crisis and integrate it into their ecological transition plans.
