UN Biodiversity Conference COP 16 starts today in Colombia. (Image pd)”/>
The UN Biodiversity Conference COP 16 starts today in Colombia. (Image pd)
“Ahead of the UN Biodiversity Conference COP 16, which takes place today in Colombia, the urgency of integrating nature-based solutions into global climate and biodiversity strategies is becoming increasingly clear,” write Marc Palahi, Chief Nature Officer, Lombard and Laura Garcia Velez, Nature Specialist, at Lombard Odier IM.
The global framework, adopted at the UN Conference on Biological Diversity (COP 15) in Canada, underlines the importance of protecting and restoring nature in the fight against climate change, desertification and biodiversity loss biological diversity.
Nature-based solutions, i.e. measures to protect, restore and sustainably use nature, must be integrated and scaled in both the public and private sectors. However, current investments in nature-based solutions are not enough: in its State of Finance for Nature 2023 report, the United Nations Environment Program puts annual investments at a total of $200 billion. The private sector contributes just 20 percent of this. These investments must be almost quadrupled by 2050. This is the only way to achieve the global goals of the World Summit in Rio de Janeiro in 1992 to limit climate change, protect land and seas and achieve land degradation neutrality.
Countries are expected to publish their updated national biodiversity strategies and action plans ahead of COP 16 in October to promote societal action to close the investment gap and eliminate incentives that harm nature. Lombard Odier expects that “discussions at COP 16 will focus on aligning these strategies with climate change and desertification agendas, and recognizing businesses and the financial sector as key enablers of the transition to a green, zero-emissions economy .»
Nature-based solutions should be at the center of discussions because they are not only the most cost-effective solution to combat biodiversity loss and desertification. They can also contribute more than a third of the emissions reductions needed by 2030 to limit global warming to below 2 degrees Celsius.
The role of the private sector
With a view to COP 16, experts say it is important to think about how companies and financial institutions can expand nature financing and take advantage of opportunities. Over the past year, companies have increasingly introduced mandatory nature standards and voluntary disclosures. This trend raises important questions about how these assessments can be linked to the transition to nature-friendly net-zero business models.
The organic circular economy is becoming an important framework for pursuing this path. The implementation of new, vertically integrated business models would not only redistribute capital into the agricultural production apparatus, but also adequately reward agricultural labor and enable participants to learn new, economically, ecologically and socially sustainable production methods.
“We also assume that sector-specific issues such as the transition of food systems to a nature-friendly net-zero business model will remain a central concern of COP 16,” write the authors.
Clear incentives are needed to transform forestry, land use and agriculture. These sectors are responsible for almost a third of global greenhouse gas emissions and rely on land whose soil fertility is rapidly and rapidly deteriorating due to intensive use.
Various food raw materials such as coffee or cocoa can be produced sustainably using nature-based solutions such as agroforestry and organic inputs. These nature-based production models would offer food with negative emissions (and therefore Scope 3 emissions), without deforestation (and therefore taking into account the EU Deforestation Directive) and more climate-resilient production (and therefore also resilient supply chains).
Interested in large companies
«We expect that COP 16 will discuss how companies can integrate and finance nature. Nature investment products such as payments for ecosystem services and green bonds are already trending. However, we believe that new, innovative products specifically tailored to transform value chains in forestry, land use and agriculture will attract the interest of large companies. They are the natural buyers of nature-based solutions and achieve the economies of scale required in nature investment markets.”
If successful, this approach could open up opportunities in industries such as fashion, tourism and pharmaceuticals by transforming the way we produce bio-based raw materials. The cooperation of states, companies and financial institutions is crucial in order to jointly mobilize the resources necessary to close the investment gap and promote a bio-circular economy.
