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Sustainability
Corporates must step up on targets, finance for nature
At the recent UN biodiversity conference, slow progress by governments on nature protection was balanced by breakthroughs in new science-based targets for companies
The 16th edition of the world’s biggest nature conservation conference took place recently, but you would be forgiven if you missed it. Unlike its better-known counterpart for climate change, the Conference of the Parties (COP) for the United Nations Biodiversity Convention only takes place every other year. This time, it ran from 21 October to 1 November in Cali, Colombia.
At the last biodiversity COP in 2022, the 196 parties agreed to the Kunming-Montreal Global Biodiversity Framework (GBF). The GBF pledged to conserve 30% of the planet, restore 30% more, and fund nature conservation by $700bn annually. These promises are important because the numbers are dire. In October, WWF announced “a system in peril”: a 73% decline in the average size of monitored wildlife populations since 1970 with the earth “approaching irreversible global tipping points driven by nature loss and climate change.”
With action more urgently needed than ever, the expectations this time around were high. Perhaps inevitably, the final headlines revealed disappointment at the lack of high-level achievements on issues such as funding. But how you judge the conference’s results depends on your expectations, and there has been progress on some important challenges.
What happened
First, the bad news: developed countries did not make good on their GBF pledge to fund $20bn for biodiversity by 2025. Nor was there any progress on a pledge to reduce government subsidies that harm biodiversity by $500bn annually. In fact, since 2022, subsidies that encourage unsustainable production, carbon-intensive consumption, the depletion of natural resources, or the degradation of global ecosystems have actually increased by $800bn instead of going down. (Paul Polman gave a powerful speech on the topic.)
No wonder some of the commentary has been negative.
But despite these issues, the COP produced concrete agreements that will have a positive impact. If you had been advocating for indigenous people and local communities (IPLCs) to be better included in decision-making for biodiversity, for example, you would be celebrating the “historic moment” of the establishment of a subsidiary body for article 8(j). IPLCs play a critical role in conserving key biodiversity as they manage or hold tenure rights over more than a quarter of Earth’s terrestrial surface and are present in about 40% of all terrestrial protected areas and ecologically intact landscapes.
Overall, there has been progress from countries since the last conference. As of this COP, 17.6% of terrestrial and 8.4% of marine areas are now protected, with the rise in coverage of protected areas since 2020, at “over twice the size of Colombia,” showing “glimmers of promise”, according to UNEP Executive Director Inger Andersen. By the end of the COP, 119 countries had submitted national targets aligned with the GBF and 44 had submitted national plans to achieve these. While this is not yet enough, there would be no such plans or targets, let alone aligned to a common global ambition, without these conferences.
What is more, COPs are useful in bringing together groups of people with common goals to align visions, share expertise, and learn from each other. What happens on the sidelines of formal policy discussions often impacts biodiversity efforts.
Increasingly “the biodiversity COP has evolved to be a true confluence of corporations, policymakers, Indigenous communities, startups, and financiers” from its origins as a meeting for only policymakers, notes Superorganism, a venture capital firm set up specifically for biodiversity, in its conclusion. For these stakeholders, business included, the COP is the time and place to launch flagship initiatives, like the pledge by more than 230 businesses and financial institutions to transform their “operations, value chains, and entire sectors to contribute to a thriving economy that depends on healthy ecosystems.
While these commitments and initiatives did not all happen at the COP, the conference serves as a drumbeat and offers a common deadline to meet without which these milestones would be much harder to achieve.
New targets and agreements for business
This year, the COP saw the first official science-based targets for nature being approved for business. The Science-Based Targets Network (SBTN) announced the approval of corporate targets for Kering, GSK and Holcim. Kering adopted the first-ever science-based targets for both freshwater and land, while GSK and Holcim adopted the first science-based targets for freshwater. According to the SBTN, over 150 additional companies are already preparing to set targets through its process. (If your company wants to try its hand at setting targets, see here). Since the pilot program validated 60% of participating companies, dozens more targets are likely to be set in the coming months.
The Taskforce on Nature-related Financial Disclosure (TNFD), a voluntary agreement in which companies report their biodiversity impacts throughout their supply chains, also reported that representation from private sector actors had grown to $6.5tn in total market cap, and $17.7tn in total assets under management, representing 47% more TNFD adopters this year than last.
Other notable flagship projects launched at COP include:
- A new innovative funding mechanism for tropical forests, the Tropical Forests Forever Fund (TFFF): “ A fund unlike any other”. The TFFF is designed to deliver $4bn annually to tropical nations to incentivize forest conservation. Unlike other funds, it will be managed independently of governments and investors and will include Indigenous groups and local communities. The fund aims to raise $125bn initially, with a 20-year investment, and will penalize countries for deforestation.
- A framework for “high integrity” biodiversity credits by the International Advisory Panel on Biodiversity Credits will feed into formal discussions and influence nascent schemes around the world. Finland also announced that it will develop criteria and a verification system for the generation of voluntary biodiversity credits, becoming the first European country to do so. Finland will also provide guidance to companies on what sort of claims they can make based on the credits they invest in.
- The launch of the Global Ecosystems Atlas by the Group on Earth Observation, an intergovernmental body that coordinates Earth intelligence solutions to inform decision-making and accelerate action on global, societal, and environmental challenges, aims to be “the first comprehensive harmonized open resource on the extent, change, condition, and risk of all the world’s ecosystems” and is available to test in beta mode. This should significantly help businesses assess their exposure and impacts on biodiversity.
- The launch by WWF of a tracker to monitor individual countries’ National Biodiversity Strategy and Action Plans (NBSAPs) to implement the GBF. The NBSAP tracker is available for anyone to use and should help transparently assess progress on achieving the GBF.
While these commitments and initiatives did not all happen at the COP, the conference serves as a drumbeat and offers a common deadline to meet without which these milestones would be much harder to achieve. It is also the place where many of the relationships for future partnerships, collaborations, and projects are made, including for business.
“The Cali Fund ensures that companies profiting from nature contribute fairly to biodiversity conservation and directs critical funding to the people and places that need it most.”- Kirsten Schuijt, Director General, WWF International
A new type of private funding mechanism
Perhaps the most noteworthy agreement emerging from COP16 concerns the formal approval of a means to distribute profits from large companies to conservation efforts based on Digital Sequencing Information (DSI). DSI is a digital representation of the genetic sequences of organisms and allows for the analysis and sharing of genetic information without the need for physical samples. DSI helps research and innovation around the world, including in cosmetics, food, biotechnology, and pharmaceuticals.
In a “groundbreaking new deal” after months of negotiations, the parties to COP have agreed the creation of a new mechanism, the Cali Fund, to collect money from companies using the genetic information in DSI databases to fund conservation efforts, particularly in poorer countries and Indigenous lands. This marks the first time a formal, apolitically managed system has been put in place to distribute private funds to conservation based on the use of nature.
To create its COVID vaccine, for example, Moderna used genetic sequencing from hundreds of respiratory viruses and has generated over $30bn in sales from it. Based on a percentage of profit or revenue, the scheme could raise over $1bn per year to protect biodiversity and the environment. Kirsten Schuijt, Director General, WWF International, believes the Cali Fund “ensures that companies profiting from nature contribute fairly to biodiversity conservation and directs critical funding to the people and places that need it most.” Eva Zabey, CEO of the Business for Nature coalition, representing over 100 companies, called the Cali Fund “a positive step forward.”
What the future holds
The groundbreaking first biodiversity COP, the 1992 Rio Conference, agreed on the three main environmental conventions on climate change, biodiversity, and desertification. Thirty-two years on, these conferences are as important as ever as the problems foreseen by scientists in the twentieth century play out in front of us today.
The Rio Conference created three separate processes to address biodiversity, climate change, and desertification. There is now increasing discussion about bringing them closer together, including through a resolution at this biodiversity COP.
This year, COP16 is closely followed in November by the climate conference, COP29 in Baku, and a couple of weeks later by the desertification COP in Riyadh. At the same time, the Republic of Korea will host the fifth and last negotiation for a Global Plastics Treaty, set to be agreed in 2025. All of these will have impacts for business and merit the attention of corporate leaders. While they are necessary and useful as the main tools of global cooperation on global environmental issues, these conferences are not sufficient to bring about needed progress. To accelerate the pace of change, international diplomacy efforts must be complemented with energetic innovation by corporations. Nature needs the full involvement of the private sector, including business, to achieve our common goals.
If you are looking to better integrate biodiversity into your corporate strategy, refer to the IMD-WWF Guide here.
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