“Genuine exchange” developing; as nature, climate and finance starts to become a global conversation, says expert.
Debate has “really matured” in the policymaking scene in relation to climate and nature, according to Jeremy Eppel, Principal at NatureFinance, a non-profit organisation that works “to align global finance with nature positive outcomes”.
Eppel was speaking at ESG Investor’s Nature Data for Institutional Investors event about the Global Biodiversity Framework (GBF), signed by 196 countries in December 2022 in Montreal to “take urgent action to halt and reserve biodiversity loss” by 2030 and protect 30% of land and sea areas by 2030.
He said that four years ago the idea that business could be an integral player to climate and nature policy was “marginally understood”. But in Montreal last December, he said there was a “genuine interchange” between the finance sector and policymakers.
“We saw several-hundred finance sector representative [in Montreal],” he said.
Eppel also spoke to the importance of the finance sector thinking about nature and climate in tandem.
“Both need to be thought about in a fully integrated way, not managed in separate buckets or separate corners of a company, because they’re so interdependent that you will get one or the other wrong if you deal with them separately,” he said.
Global North vs South
Eppel also said the conversation around nature, climate and finance was becoming a global conversation “but in a very patchy way”.
“There are lots of examples like Brazil, Colombia, and certainly parts of China […] But I think it’s not yet sufficiently a global conversation.”
He added that the relationship between the Global South and Global North was changing, with an increasing level of assertiveness from the G20 and BRICs countries, who were often stewards of natural assets tied to climate change mitigation.
On the GBF, Eppel said it was “very hard fought and hard wrought”.
“It’s not exactly like the Paris Agreement,” he explained. “It’s not legally binding but it is an intergovernmental agreement of most countries that you could imagine getting together in one place.”
According to Eppel, the GBF has provided an international policy framework that has the potential to “raise expectations” of regulation by individual jurisdictions on nature. Target 15 of the GBF is related to the financial sector with it encouraging policymakers to “ensure that large and transnational companies and financial institutions […] regularly monitor, assess, and transparently disclose their risks, dependencies and impacts on biodiversity”.
Eppel said that there was an expectation that Target 15 will apply to large companies and to all financial institutions through regulation in many jurisdictions.
“If you’re a global company or a global financial investor, you would be unwise to not think about this front and centre.”
The Taskforce for Nature-related Financial Disclosures (TNFD) is seen as a tool to operationalise the achievement of Target 15 of the GBF.
The TNFD recommendations are aligned with the requirement of Target 15 of the GBF which calls for assessment and disclosure of nature-related risks, impacts, and dependencies, enabling companies and financial institutions to align their reporting with global nature-related policy goals, as they are now doing on climate related issues.
In August, the GBF Fund launched, which will provide finance to “budget-stressed developing countries” needing support to implement national plans to meet the objectives of the framework. The fund will be structured to draw in capital from governments, the private sector and philanthropic organisations.