COP15, the United Nations’ biodiversity conference held in Montreal, Canada wrapped up with the 30x30 pledge to protect 30% of our planet’s land and seas by 2030 and to invest USD 200 billion a year in nature conservation. However, the 200-nation summit did give us several other ‘’firsts’’ and milestones that will drive companies’ ESG policies in the coming years. Here’s a quick overview.
What’s the difference between COP15 and COP27?
COP, in United Nations jargon, simply means Conference of Parties. It is a decision-making body made up of countries that have signed a convention.
COP15 held in December 2022 in Montreal, Canada, was the 15th Conference of Parties to the United Nations Convention on Biological Diversity (CBD).
COP27 held in November 2022 in Sharm el-Sheikh, Egypt, was the 27th Conference of Parties to the United Nations Framework Convention on Climate Change (UNFCCC).
Nature loss, protection and restoration all figured prominently at COP15’s plenary sessions, high-level talks, expert meetings and in the corridors. The days when nature degradation was mainly a social and humanitarian issue are clearly over.
At Scone, we think that’s about time, since USD 44 trillion of economic value generation—over half the world’s total GDP—is moderately or highly dependent on forests, oceans, healthy soils, clean water, pollination and a stable climate, according to the New Nature Economy Report published by the World Economic Forum.
No wonder government and business leaders ranked “climate action failure, extreme weather, biodiversity loss, nature resource crises, human environmental damage” as their top five risks in the next decade, followed by social cohesion erosion and geopolitical confrontations, in WEF’s Global Risks Report 2022.
What drives biodiversity loss?
Climate change is currently responsible for 11-16% of biodiversity loss, a proportion expected to rise. But the remaining 85% is caused by other drivers – the most significant being land, sea and ocean use conversion. (Source: WEF)
Turning their concern into action, more than 330 business and finance institutions from 52 countries with combined revenues of more than USD 1.5 trillion urged the world leaders at COP15 to adopt mandatory requirements for all large businesses and financial institutions to assess and disclose their impacts and dependencies on biodiversity by 2030.
497 Indigenous representatives, more than ever, were among the 15,723 delegates at COP15.
Indigenous lands cover 20 per cent of the Earth’s surface but contain about 80 per cent of the world’s rapidly dwindling biodiversity, according to the UN. Their deep expertise and leadership as environmental stewards have been widely recognized by scientists, environmentalists and world leaders alike and quantified by the UN.
Still, indigenous delegates had no negotiating standing or decision-making power at COP15. However, reflecting Indigenous nations’ rising influence at UN biodiversity conferences, at the start of the conference, Canadian prime minister Justin Trudeau pledged EUR 550 million for Indigenous-led conservation projects, urging China, Russia and Brazil to join him.
Against many observers’ expectations, the Kunming-Montreal Global Biodiversity Framework (GBF) was adopted, promising EUR 200 billion a year from public and private sources for nature preservation worldwide. The exact sources, nations’ commitments, and distribution mechanism remain hazy. But the GBF adoption in itself is considered a break-through for nature almost on a par with the Paris Agreement for CO₂.
The draft framework includes 23 targets for 2030 that call for, among other things:
The USD 200 billion of public and private investment into biodiversity is expected to give rise to prolonged discussions well beyond the conference: What developing countries? Is this biodiversity funding dependent on recipient countries’ simultaneous investments in climate change mitigation? Who’s actually putting their money where their mouth is? This resembles the discussions and delays around the “loss and damage fund” agreed upon at COP27 last month after decades of delay.
“Forward-looking companies are expanding the scope of the E in their ESG strategy”, notes Erwin Van Laethem, CCO at Scone.ai, “from their impact on the environment to nature’s impact on their operational risk and cost.
“At COP27 and over the past few years, we’ve seen that governments are more forcefully driving climate action, since parts of the private sector have been acting too slowly.
“Nature-related risks are now moving up the regulatory agenda and in response investors and companies are placing increasing emphasis on assessing and disclosing their nature-related risks.”
The Taskforce on Nature-related Financial Disclosures (TNFD) just published version 3 of its beta framework to assess and disclose nature-related risks. The taskforce consists of 40 members representing financial institutions and corporations with over USD 20 trillion in assets.
Van Laethem: “This shows that nature is serious business to business leaders. Increasingly, companies’ materiality assessments (i.e. what issues matter most?) are bidirectional assessments of risks. Until recently, those assessments merely mapped a company’s impacts on its social and natural environment. Quite rapidly, though, impacts from nature—such as climate change and natural resources security—are included in those materiality assessments. So, inside-out impacts and outside-in impacts are both on the boardroom table now.”
Image source: kpmg
On a positive note, The Future of Nature and Business, the second report in the World Economic Forum’s New Nature Economy series, details an impressive list of business opportunities in the emerging nature-positive economy:
Food, land and ocean use
Infrastructure and the built environment
Energy and extractives
Together, these represent up to USD 10 trillion in business opportunities and 395 million new jobs as we transition to a sustainable economy over the next decade. More figures here.
“Our Scone platform, with its app and in-company campaigns, helps companies direct, track and disclose their efforts in behaviour-based savings in energy, water, food and mobility”, notes Van Laethem.
“So, the nature-positive economy is already at the heart of our business.”