Part I of the COP-15 UN Convention on Biological Diversity (CBD) took place in Kunming, Yunnan Province, China between 11-24 October in 2021. The Kunming Conference is known as the 15th meeting of the Conference of the Parties (COP-15) to the Convention on Biological Diversity (CBD). It also comprises the 10th Meeting of the Parties to the Cartagena Protocol of Biosafety (Cartagena Protocol COP/MOP 10) and the 4th Meeting of the parties to the Nagoya Protocol on Access and Benefit-Sharing (Nagoya Protocol COP/MOP 4).
With the support of 2,918 delegates in Kunming and 2,478 members online, the meeting concluded with the adoption of an effective post-2020 global biodiversity framework. The goal of the framework is to create a plan that would enable the implementation of a broad transformation in society. It aims to create a shared vision of living in harmony with nature by 2050. Part I of the Kunming Conference outlined the post-2020 global biodiversity framework and established the Kunming declaration, however, further agreements and negotiation are expected to take place in spring 2022.
Here are some of the key outcomes from Part I of COP-15:
- The high-level segment of the meeting adopted the Kunming Declaration, whereby the participating countries will commit to the negotiation of adopting an effective post-2020 global biodiversity framework.
- The government of China announced a 1.5 billion yuan (about 233 million USD) Kunming Biodiversity Fund. The government of Japan joined in with their support of investing 1.8 billion yen (about 17 million USD).
- GEF, UNDP, and UNEP announced they would fast-track support developing country governments through preparing and updating their National Biodiversity Strategies and Action Plans (NBSAPs) and national financing plans for the implementation of the post-2020 framework.
- Youth, Indigenous People and Local Communities including, other members, such as a coalition of financial institutions were joining the commitment of protecting biodiversity.
Main Outcomes of COP15 for Biodiversity Finance
The Establishment of the Kunming Declaration
In Part I of COP 15 in Kunming in October 2021, the High-Level Segment of the UN Biodiversity concluded with the adoption of the Kunming Declaration. The declaration highlights that Parties to the Convention will be committed to developing, adopting, and implementing an effective post-2020 global biodiversity framework that would enable biodiversity recovery latest by 2030. The target is to move towards the full realization of the 2050 Vision of “Living in Harmony with Nature” – a term coined by China’s CDB COP presidency.
Elizabeth Maruma Mrema, Executive Secretary of the Convention of Biological Diversity made her remarks about the importance of the Kunming Declaration:
“The adoption of the Kunming Declaration is a clear indication of the worldwide support for the level of ambition that needs to be reflected in the post-2020 global biodiversity framework to be finalized next spring in Kunming”.
The Declaration highlights:
- The need to mainstream biodiversity across all decision-making.
- The need to phase out and redirect harmful subsidies.
- The need to strengthen the rule of law.
- The necessity in recognizing the full and effective participation of indigenous people and local communities in ensuring an effective mechanism to monitor and review progress.
Accelerating Financial and Technical Support
Aside from the Declaration, the Global Environment Facility, United Nations Development Programme (UNDP), and the United Nations Environment Programme (UNEP) made their announcement of being commitment to fast-tracking financial and technical support to developing country governments to protect biodiversity. The aim is to allow developing countries to be fully prepared for the rapid implementation of the post-2020 global biodiversity framework. In response to UNDP and UNEP’s commitment, Japan made further commitments, announcing their plan to further extend their funds in support of the National Biodiversity Strategies and Action Plans, after Spring 2022.
Furthermore, the EU highlighted that they wish to double on the external funding for biodiversity. It is implied that the EU would allocate close to 10% (EUR 79.5bn) of its external budget towards biodiversity, compared to 30% for climate action.
The Government of France highlighted that 30% of their climate funds would be used to address biodiversity concerns and fund nature-based solutions (NBS). The government aims to double their funding to a total equivalence of €1 billion for conservation and sustainable use of biodiversity by 2025. Similarly, the UK and Northern Ireland also underlined that a significant part of their climate funding will be allocated towards biodiversity, as well. Aside from EU governments, a coalition of financial institutions (with total assets more than 12 trillion EURO) joined in with their commitment of protecting and restoring biodiversity through their daily practices and future investments.
Although the post-2020 global biodiversity framework is still at its part I phase, the meeting was important to raise awareness about the challenge of global biological diversity protection. China’s Minister of Ecology and Environment and COP-15 President Huang Runqiu stated:
“Since the adoption of the Convention on Biological Diversity as the first global agreement on biodiversity conservation and sustainable use, it has played an important role in promoting global biodiversity conservation and sustainable use… “As a part of COP-15, the High-Level Segment has signaled renewed political will to boost ambition, enhance collaboration and maximize opportunities for synergies across other multilateral agreements. The Convention on Biological Diversity must strengthen global biodiversity governance”.
The Role of Financial Institutions
It is expected in the next six months that biodiversity conservation will remain an important topic in the international financial community. With the emergence of new government commitments and corporate’s supportive announcement towards biodiversity conservation, financial institutions have been even more attentive than ever before.
The Kunming Declaration emphasized that “biodiversity, and the ecosystem functions and services it provides, supports all forms of life on Earth and underpins our human and planetary health and well-being, economic growth and sustainable development”. The inclusion of the following five main government commitments highlights the Post-2020 Global Biodiversity Framework’s significance to the financial sector:
- Commitment 3: Financial community is required to adapt towards new regulatory frameworks at both, national and regional levels. The government is committed to “continue to promote the integration or mainstreaming of the conservation and sustainable use of biodiversity into decision-making including through the integration of the multiple values of biodiversity into policies, regulations, planning processes, poverty reduction strategies, and economic accounting, and strengthen cross-sectoral coordinating mechanisms on biodiversity.”
- Commitment 7: Financial and business communities are required to provide access and report on their dependencies and impacts on biodiversity. Improvement on the “global environmental legal framework and […] environmental law at the national level and its enforcement, to protect biodiversity and to combat its illegal use […]”. This will be from local to global level and is where the Taskforce on Nature-related Financial Disclosures framework may become increasingly prevalent.
- Commitment 13: The “Ministries of Finance and Economy and other relevant ministries will be engaged to reform incentive structures, eliminating, phasing out or reforming subsidies and other incentives that are harmful to biodiversity.” Under the government’s guidance, these ministries will be supporting the government’s commitment “to protect people in vulnerable situations, to mobilize additional financial resources from all sources, and align all financial flows in support of the conservation and sustainable use of biodiversity”.
- Commitment 14: Governments are committed “to the increase the provision of financial, technological and capacity-building support to developing countries necessary to implement the post-2020 global biodiversity framework and in line with the provisions of the Convention.”
- Commitment 15: Kunming declaration highlighted it is necessary to have collective support from “the full and effective participation of […] the business and financial sectors, and other relevant stakeholders, and encourage them to make voluntary commitments in the context of the Sharm el Sheikh to Kunming Action Agenda for Nature and People, and to continue to build the momentum for the implementation of the post-2020 global biodiversity framework.”
In response to the challenge of biodiversity loss, multiple financial institutions formed the Financial Institutions Statement prior to the Biological Diversity COP15. The statement was coordinated by Ceres and the Finance for Biodiversity Foundation and signed by 78 financial institutions, representing over USD $ 10.61 trillion in assets. The statement aims to gather commitments from financial institution, “calling upon the need for ambitious policy action include TNFD (Taskforce on Nature-related Financial Disclosures) institutions, such as AXA, Aviva, BNP Paribas, Credit Suisse, Mirova, Natixis, Robeco, and Storebrarnd”. At the moment, private sectors remain to be the bigger driving force behind the TNFD (Taskforce on Nature-related Financial Disclosures).
The table below highlights some of the main financial institutions and their announced commitments:
|Financial Institutions Statement ahead of the Convention on Biological Diversity COP15||Ceres and Finance for Biodiversity Foundation||Committed: Financial Institutions Statement is signed by 78 financial institutions managing more than USD 10 trillion in assets. It urges world governments to halt and reverse biodiversity loss and calls for a realignment to a nature-based economy that could generate USD 10 trillion of annual business opportunities ad nearly 400 million jobs by 2030.|
|Firmenich Group joins Union for Ethical BioTrade, strengthening its commitment to biodiversity and natural ingredients sourcing||Firmenich Group||Committed: Firmenich, the world’s largest privately-owned fragrance and taste company, has become a member of the Union for Ethical BioTrade (UEBT), a non-profit association that promotes sourcing with respect.|
|BNP Paribas Asset Management commits to biodiversity recovery||BNP Paribas Asset Management||Committed: By 2025, the Group aims to achieve EUR 3 billion in financing linked to the protection of terrestrial biodiversity, to evaluate its corporate clients on criteria linked to biodiversity, and to invest EUR 250 million in start-ups mobilized for ecological transition. Moreover, BNP is one of the 78 financial institution that have coordinated with Ceres and the Finance for Biodiversity Foundation.|
|Arkema affirms its commitment to biodiversity||Arkema||Committed: The Group has signed act4nature international’s ten common commitments and has defined eight individual commitments based on the most significant impact on biodiversity for Arkema throughout the value chain.|
|Sustainable forest management investment announcement||AXA Investment Manager||Committed: AXA used COP15 as an opportunity to announce that it would strengthen its investment and insurance requirements in activities that actively contribute to deforestation and invest EUR 1.5 billion in sustainable forest management.|
Overall, it is expected that further commitments will be made after the COP 15. During the COP 15 meeting, Jean-Jacques Barbéris, the representative from Amundi (Amundi Asset Management, a French-leading firm known for having more than 1.794 trillion EUR AUM), announced the establishment of the Finance for Biodiversity Foundation and asked for further participation from other financial institutions. The purpose of the Finance for Biodiversity Foundation is to call for more regulatory measures to ensure that private and public sectors are both alighting their interest, “activities and financial flows to the goals and targets”. As of today, there are currently 75 signatories towards this Foundation that is worth about EUR 12 trillion AUM.
Further commitments from banks would also be anticipated. In May 2021, five months prior to the UN Biodiversity COP Part I meeting, BankTrack, along with 23 other civil society organizations, reach out to 55 banks calling for the need to adopt a more “robust measure to protect global biodiversity”. The adoption entails the need to incorporate “the No Go Policy for high biodiversity areas”. Of these 55 banks, 15 banks responded: AMRO, ANZ, Barclays, BNP Paribas, FirstRand Group, GLS, Goldman Sachs, HSBC, ING, Lloyds, Banking Group, Morgan Stanley, NatWest, Rabobank, UBS, and UniCredit. However, according to BankTrack, none of these 15 banks actually made a “concrete commitment to incorporate the recommendations in their frameworks ahead of the CBD COP 15”.
Recommendations and Next Steps on Biodiversity Finance
Apart from promises and claims by financial institutions claims to include biodiversity considerations in decision-making, many others continue to wait for clear and mandatory policies to follow. These should include:
- Financial disclosure on nature-related risks. The aim of financial disclosure on nature-related risks is to ensure alignment of financial decision-making with international biodiversity goals. First countries have moved into this direction, such as France and the UK: In France, Article 29 of the Energy Climate Law already requires disclosure of biodiversity risks and actions that produces adverse impacts. Similarly in the UK, October 18th , 2021, the UK Government released a report, “Greening Finance: Roadmap to Sustainable Investing”. The report aims to encourage “UK businesses and investors [to consider] climate and other environmental, social and governance (ESG) considerations in their decision-making processes”.
- Changes to subsidies that are harmful towards nature: while reduction of harmful subsidies has been discussed for decades, some change is happening for “fossil fuels, or incentivized over-fishing and unsustainable agriculture”, which ideally would be changed in the near future – at least in selected countries. This might also lead to border adjustment mechanisms to levy a tax on products that received harmful subsidies, similar to the EU’s carbon border adjustment mechanism that taxes overseas non-priced carbon emissions.
- UN Treaty on plastic pollution: Plastic pollution and marine litter would be likely addressed in the near future. On September 2021, the “first-ever ministerial conference” on marine plastic pollution was held. The conference recommended the need to draft a resolution on creating a legally binding global mechanism to address the plastic pollution. It is expected that further negotiation and agreements upon this resolution will take place in 2022.
- Supply chain due diligence legislation on forest commodities: The EU and UK have already set requirements for companies to conduct “due diligence to identify deforestation in supply chains”, which could outlaw import of products that are based on illegal deforestation.