While degradation threats to nature and biodiversity have always been important topics in the climate change dialogue, they have recently been attracting more attention than ever.
And the nature and biodiversity stakes are high – 55% of global GDP, according to Oxford Economics, depends on a high-functioning biodiversity. In general, there are three channels by which parties can demonstrate their determination to act on issues involving the preservation and promotion of nature and biodiversity.
First, there are global forums, at which leaders from across the world can sit together to discuss key issues related to nature and biodiversity, make action plans and foster meaningful engagements. Most recently, the 16th meeting of the United Nations Biodiversity Conference 2024 (COP16), which took place in Cali, Columbia from October 21 to November 1 of this year, provided a global stage for governments and businesses to communicate their ideas on preserving nature and biodiversity, and make commitments towards implementing them.
The focus of COP16, which followed the landmark international agreement of the Kunming-Montreal Global Biodiversity Framework (GBF) at the COP15 held in 2022, was for all parties present to make concrete moves towards fulfilling their “30x30 pledge” laid out at the GBF – namely, to protect at least 30% of the world’s land and water, and restore 30% of degraded ecosystems by 2030.
Secondly, corporates are displaying their awareness to nature and biodiversity protection through industry alliances and initiatives like the Taskforce on Nature-related Financial Disclosures (TNFD).
Notably, 502 corporate and financial institutions from 54 jurisdictions – as of October, according to the latest TNFD report – have committed to getting started with the voluntary reporting of their nature-related issues in line with the TNFD recommendations. Among them, nearly half (236) are based in the Asia-Pacific region.
The total number of TNFD adopters represents a 57% increase since the start of the year. Together, these signatories represent a US$6.5 trillion market capitalization and US$17.7 trillion of assets under management, increases of 63.2% and 26.2%, respectively, compared with those of January 2024.
Finally, financial institutions are experimenting with different kinds of financing instruments that are pro-nature and can bring economic benefits at the same time. Supranational and sovereign issuers are the trailblazers in this realm.
The Asian Development Bank (ADB), for example, just issued its first nature- and biodiversity-themed bond, which was valued at A$150 million (US$98.5 million) and has a 10-year tenor. The bond, purchased by the Dai-ichi Life Insurance Company of Japan and arranged by Credit Agricole CIB, will provide funding for a range of eligible projects across the Asia-Pacific region. As well, the ADB says it will soon launch its Environment Action Plan 2024–2030 to create a roadmap for its activities that will tackle climate change, biodiversity loss and pollution.
That said, the gap in nature and biodiversity finance is still sizable. While developed nations are committed to providing at least US$20 billion a year to restore biodiversity in developing nations by 2025, according to the GBF, and the world still faces a shortfall of US$11.6 billion.
COP16 will not be the only stage with a spotlight on nature and biodiversity issues. Many related topics will be discussed as well at the UN climate summit (COP29) in Baku, Azerbaijan, next week, and at the G20 Leaders’ Summit in Rio de Janeiro, Brazil, in November.
