On June 8, UK Mission to the European Union hosted a panel discussion on mobilizing finance and resources to protect biodiversity in preparation for the upcoming Convention of Biological Diversity (CBD COP15). 

The panel included:

  • William Macfarlane, Director of Economics and Finance, UKMis Brussels
  • Laura-Louise O’Reilly, Head of Environment, UKMis Brussels
  • Dr. Christoph Nedopil Wang, Director of the Green BRI Center, International Institute of Green Finance (IIGF), Central University of Finance and Economics (CUFE)
  • Jane Stratford, Head of CBD team at the UK’s Department for Environment, Food and Rural Affairs
  • Jeremy Eppel, Ambassador of the Finance for Biodiversity Initiative (F4B)
  • Marine de Bazelaire, Group Advisor on Natural Capital, HSBC
  • Sébastien Chatelus, Policy Officer (Biodiversity, Ecosystem Services, Wildlife trafficking) from DG INTPA

The panel was opened with remarks by William Macfarlane. He underscored that with this year’s Convention of Biological Diversity (CBD COP15) coming up, it is a timely moment to secure sufficient financial resources from both businesses and financial sectors. “The twin crisis of climate risk and biodiversity needs to be tackled, with both challenges and opportunities ahead on this agenda.” 

The panel discussion was moderated by Laura-Louise O’Reilly. She opened by asking the panelists: How do we ensure sufficient funding in meeting global goals to protect nature?

Jane Stratford stated that COP15 would adopt a ten-year framework with enhancing reporting and reviewing mechanism. To put forward improved financing, countries should provide more incentives to invite the business and finance sector into the discussions.

Dr. Christoph Nedopil Wang highlighted the unique opportunity in this year to accelerate biodiversity protection. First, debt-for-nature swaps “can mobilize relevant finance to protect priority areas in many emerging markets to protect key biodiversity areas,” he said. Additionally, much private finance should be steered to invest in modern agriculture, including investment opportunities in vertical farming, city farming, and beyond alternative needs to reduce land use change. Lastly, he pointed out that natural climate solutions that bring together the climate goal with the Emission Trading Systems or other carbon credits, are also fantastic opportunities to explore. Dr. Christoph Nedopil Wang also stressed the need to bridge the language gap between policy and NGOs and investors – where the latter are driven by risks and opportunities.

Marine de Bazelaire argued that resource mobilization would not be a real issue in the next decade. Sufficient resources are available, and there is the will to invest in biodiversity and natural capital. “When HSBC launched the joint venture with Pollination, the appetite from our stakeholders was tremendous, which indicates the increasing public understanding of the environmental issue… However, learning and training are still needed to help finance protection and restoration in order to meet COP15.” She underscored that nature risk reporting, particularly the work of the TNFD (Task Force for Nature-related financial disclosure) is very desirable.

The second question raised by Laura-Louise O’Reilly was on how to mainstream nature protection into public and private finance.

Jeremy Eppel stressed three aspects to mainstream nature protection in finance. First, he proposed to accelerate the application of nature performance bonds. Businesses and public investors would be able to reduce their funding costs if they meet specific nature protection indicators. Second, he mentioned the need for global green stimulus program. The third area he sees is in the work of Development Finance Institutions. He pointed out that financial institutions, both public and private, should think about climate and nature in tandem. “At the national level, in particular, the development of National Biodiversity Finance Plans would also be paramount to identify all the resources available to meet national needs for nature protection and restoration,” Jeremy Eppel argued. 

Sébastien Chatelus argued that covering the current underfinancing of the ecosystem is the last step to rebalance our vision of the planetary crisis and how it affects people. Investors understand climate and environmentally related risks; it is more about taking the extra steps and using two COPs as a pretext to tackle the crisis. “Roadmaps like leaders’ pledge for nature are the best way to capture both the level of ambition we have and the concrete steps that we can take to implement these ambitions,” he noted. Sébastien Chatelus believed that more efforts could be put into biodiversity-positive and nature-positive financing, including setting up rules, standards, regulatory frameworks, taxonomy, and undertaking due diligence, etc. Financial institutions in this respect would then be well placed to help guide their work and capture the externalities.

Jane Stratford re-emphasized the urgent need to bridge the linguistic gap between CBD and the private sector. From a government perspective, she noted that the CBD and private sectors don’t have the same carbon target and carbon language; therefore, the private sector may find the carbon language complicated and challenging concepts. “One of the things that we [CBD] are keen to ensure is that CBD’s framework should speak not just to the government but also to guide business and private sectors,” she revealed. On top of that, Jane Stratford argued that efforts should also be made to monitor nature the same way CBD has yet done for the carbon market.

One of the audience question in the panel concerned the application biodiversity safeguards in the risk assessment of projects.

Dr. Christoph Nedopil Wang noted that many Development Financial Institutions have integrated biodiversity considerations, for instance, through the IFC Performance Standard 6, into financial decision making. However, he pointed out that at this stage, financial institutions were much better in evaluating climate risks due to clear measurements, while these measurements were missing for nature.

“The way financial institutions tackle and address risk linked to biodiversity and natural capital loss going forward is still at the infancy level,” Marine de Bazelaire pointed out. More progress is needed to analyze the impact these losses had on different business models. From the perspective of investment and asset management, however, there is an issue of data access to understand the footprints of companies. HSBC had set up its engagement policy on biodiversity to mainstream this dialogue with its counterparts going forward.

Summary and Outlook

Laura-Louise O’Reilly and William Macfarlane wrapped up the panel, stressing the importance of developing a commonly used language to help better communicate with the financial sector, and the importance of setting up regulatory frameworks. “It’s great to see a number of great initiatives with higher ambitions happening and more and more reports addressing this issue, which all bring greater momentum into COP15 and COP26,” Laura-Louise O’Reilly commented in her summary.

UK Mission to the European Union is running a series of events across the climate and biodiversity sphere, addressing finance, ocean protection, and deforestation. IIGF Green BRI center will continue to bring you more updates on their upcoming events as we move forward with this global agenda.

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