COP15: the beginning of a beginning?

History was made at the UN Biodiversity Conference in December, also known as COP15, and not a moment too soon. Global efforts to meet the previous targets agreed at COP10 in 2015 have been woeful - not even one of the 20 targets have been fully met. On top of this, scientists agree that biodiversity is now at a tipping point. Decisions made at December’s COP15 were considered our last chance to conserve the natural world and our existence as we know it.

 

COP15’s Global Biodiversity Framework (GBF) aims to address biodiversity loss, restore ecosystems and protect indigenous rights. The GBF raises the bar for action needed from countries and it’s historic in recognising that businesses and investors have a leading role to play in conserving nature.

 

The GBF consists of four overarching global goals to protect nature and 23 action-oriented targets to achieve by 2030, ranging from restoration of degraded ecosystems and increasing urban green and blue spaces, to reducing food waste and ensuring equitable representation of Indigenous peoples. Despite its weaknesses and shortcomings, the agreement is undeniably a major step forward.

 

The adoption of an agreement shows significant progress in at least four key areas:

 

A global goal to halt and reverse nature loss

 

Considered the pinnacle of the GBF, Target 3 seeks to protect 30% of global land and sea for nature by 2030. Also known as the ‘30x30’ target, it mobilises all parts of society and provides a rallying cry for everyone, including businesses and finance, to play their part in reshaping the world’s relationship with nature. Target 3 explicitly references indigenous knowledge as part of the effort to protect and conserve ecosystems. This feels like a particularly significant step forwards given people tend to ignore different forms of knowledge that can help support and protect nature.

 

Requiring the disclosure of biodiversity-related risks

 

Target 15 of the GBF is a wake-up call for the private sector. It requires governments to ensure that large companies and financial institutions regularly monitor, assess and transparently disclose their risks, dependencies and impacts on biodiversity by 2030. However, the word ‘mandatory’ doesn’t appear in the final text. Instead, the agreement commits governments to ‘encourage and enable’ disclosure from businesses. Whilst this does send a powerful signal to the global business community, it also seems to have lost sight of the fact that we only have 8 years until 2030. We don’t have time to wait for individual governments to decide these disclosures are significant enough to be made mandatory.

 

Phasing out environmentally harmful subsidies

 

Research shows that at least £1.48tn of environmentally harmful subsidies is financing the destruction of wildlife every year through things like cattle farming, deforestation and pollution from synthetic fertilisers. Redirecting subsidies in the form of monetary incentives to support activities such as storing carbon in the soil, producing healthier food and growing trees is a significant business opportunity. Target 18 of the GBF says that harmful subsidies should be reduced by at least $500bn a year by the end of the decade. This target is a huge opportunity to reset the rules of our economic and financial systems and incentivise companies to choose nature positive outcomes. It’s also encouraging to see the GBF use carrots (i.e. monetary incentives) and not just sticks to ensure biodiversity is meaningfully addressed by the corporate sector.

 

Mobilising financial resources to protect nature

 

Naturally, finance was a source of controversy at COP15. The gap between current and required annual financing for biodiversity conservation is approximately US$700bn. To bridge this gap Target 19 of the GBF calls for at least US$200bn per year for biodiversity-related funding, including a financial contribution from developed countries of US$20 billion per year by 2025 and US$30 billion per year by 2030. The final text says this includes ‘leveraging private finance…and encouraging the private sector to invest in biodiversity, including through impact funds and other instruments.’ It’s very likely that this will open the door for innovative financial mechanisms for biodiversity such as green bonds, payment for ecosystem services and natural capital funds. Several organisations have already launched nature-based funds and other products aimed at generating profits from investors’ increasing appetite for exposure to nature-based solutions. This feels like a ‘win-win’ if it’s encouraging businesses to disclose nature-related risk whilst also generating the finance needed for biodiversity conservation.

 

What does this mean for business?

 

Governments and regulators will now look to how they can translate the COP15 agreement into national action, with businesses key to delivering the pledges in practice. This will mean an increased focus on local nature preservation, policies that encourage sustainable use of biodiversity and a move to mandatory biodiversity disclosures. It’s also likely that methodologies and frameworks to help deliver on these requirements will become increasingly standardised.

 

There are several actions that organisations can start taking now in response to the GBF:

 

1. Understand your organisation’s nature-related impacts. Tools already exist to help organisations do just this. The Natural Capital Protocol, The Science Based Target Network and the Taskforce on Nature-related Financial Disclosures are a good place to start. More recently, WWF released its Biodiversity Risk Filter. It’s a free online tool based on the understanding that companies need data to build an accurate picture of the biodiversity risk they face and take appropriate measures to address this.

 

2. Use existing guidance to start preparing for disclosure. The WBCSD recently launched new business guidance that includes a checklist of actions for companies to assess, commit, transform and disclose their nature-related performance. The guidance has been released as a draft for consultation and stakeholders are invited to input and feedback. Some companies are already taking bold actions on biodiversity and are sharing the details of how to encourage others to do the same. For example, Faith in Nature recently appointed Nature to its Board of Directors. To do this it worked with lawyers to officially amend its company constitution to include Nature as a director, with the same voting rights as its human directors.

 

3. Start disclosing now if you can. The requirements of the GBF do not (yet) require mandatory disclosure of nature-related impacts. But, it’s likely that the GBF and other voluntary disclosure initiatives e.g. TNFD, could become mandatory overtime. Some organisations, like John Lewis, already produce a biodiversity report. While it doesn’t yet align with TNFD, it’s a start and could make the transition to mandatory reporting smoother in the future. Similarly, many companies are already undertaking TNFD pilots to learn and provide feedback to further develop the framework before its finalised and released in late 2023. This too can only help an organisation prepare for future mandatory nature-related reporting.

 

While COP15 did make history, there is still much more to be done. The 23 targets are indeed momentous, but they are just targets. It’s the commitment of all of us individually: as citizens, employees or officers in governments that will determine their success. As Basile van Havre, co-chair of the negotiating group, noted a few hours after the adoption of the agreement: ‘this is the beginning of a beginning’ – the rest is up to us.