Investors are among those hoping for a ‘Paris moment for nature’, but the road to finalising the Global Biodiversity Framework might be as bumpy as that already travelled.
Over the next two weeks in Montreal, government negotiators are expected to discuss and finalise the text of the post-2020 Global Biodiversity Framework (GBF), which is intended to reinvigorate public and private sector efforts to reverse multiple nature crises by 2030. Many investors will be among the 10,000 COP15 delegates, but many more will be unfamiliar with the summit, the details of the framework and the stages that will accompany and inform its hoped-for journey to conclusion.
COP15 – or the UN Biodiversity Conference – was originally due to take place in October 2020 in Kunming, China, but was postponed due to the Covid- 19 pandemic, with the in-person conference being rescheduled multiple times.
In June, it was confirmed the summit would be shifted to Montreal, while still be chaired by China, due to the country’s zero Covid policy. This is officially the second part of COP15, with parties meeting virtually in October 2021, and signing up to the Kunming Declaration, which committed governments to “strong political momentum to develop, adopt and implement an ambitious and transformative post-2020 global biodiversity framework”.
UN Biodiversity Conferences – of which COP15 is the fifteenth edition, having started in Nassau in the Bahamas in 1994 – are meetings of the Parties to the Convention on Biological Diversity (CBD), held bi-annually since COP3 in 1996 until COP15’s postponement in 2020.
Held in November, COP27 was 27th Conference of the Parties of the United Nations Framework Convention on Climate Change (UNFCCC), while COP15 is for the 196 nations which signed the 1992 CBD at the Rio Earth Summit, committing to use natural resources sustainably.
COP15 is seen as especially important due to it being expected to finalise the GBF, which is required to boost nature protection efforts. It has also become increasingly clear through previous climate COPs that there can be no solving the climate crisis unless further damage to nature is prevented, such as the deforestation which has destroyed trees needed to sequestrate carbon and ensure that the Earth remains habitable for humans.
GBF: The Basics
The GBF is a plan to implement broad-based action to change society’s relationship with nature, and ensure that by 2050 the shared vision of ‘living in harmony with nature’ is met. The framework is also needed to achieve the UN Sustainable Development Goals (SDGs), with it aiming to halt and reverse biodiversity loss to achieve a nature-positive world by 2030, which requires investment of at least US$200 billion per year.
The framework is comprised of 21 targets and 10 ‘milestones’ to be achieved by the end of the decade. Referred to as ‘30×30’, the most well-known of these is Target 3, which aims to ensure “at least 30% globally of land areas and of sea areas, especially areas of particular importance for biodiversity and its contributions to people, are conserved through effectively and equitably managed, ecologically representative and well-connected systems of protected areas and other effective area-based conservation measures, and integrated into the wider landscapes and seascapes”.
Additionally, the GBF aims to prevent or reduce the rate of introduction and establishment of invasive alien species by 50%, and control or eradicate such species to eliminate or reduce their impacts. Redirecting, repurposing, reforming or eliminating incentives harmful for biodiversity in a just and equitable way, reducing them by at least US$500 billion per year, is a further key GBF target.
A key driver for creating the GBF was a 2019 Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) report, which found that 75% of the land-based and 66% of the marine environment had been significantly altered by human actions, nearly one million species were at risk of extinction from human activities, and that climate change was significantly intensifying biodiversity loss.
As well as the five direct drivers of biodiversity loss – invasive non-native species, pollution, climate change, direct exploitation of organisms and the changing use of land and sea – IPBES has also flagged society’s disconnect from and under-valuation of nature as contributing factors.
The finalisation of the GBF is widely expected to act as a catalyst for legislative and regulatory action in 2023. Signatory governments are seen to be likely to introduce measures to make good on its targets, including disclosure requirements covering the nature-related risks of financial institutions and corporates.
However, there is still concern and uncertainty over the final shape of the GBF, with experts saying the draft framework had “a lot of open ends” which will need to be closed at COP15.
When the draft GBF was discussed in Geneva in March, a youth delegate described the process of as “watch[ing] as our hopes for biodiversity were slowly trapped between square brackets” as progress was slowed by the divergent views.
GBF: Goals and Targets
The GBF has four key goals, each underpinned by milestones. The four goals are: enhancing the integrity of all ecosystems; ensuring nature’s contributions to people have been valued, maintained or enhanced through conservation and sustainable use; sharing the benefits from the utilisation of genetic resources fairly and equitably, including for the conservation and sustainable use of biodiversity; and closing the gap between available financial and other means of implementation, and those necessary to achieve the UN’s 2050 Vision. This fourth goal is seen as critical as it requires alignment of public and private finance flows with the overall objectives of the GBF.
The supporting milestones to be reached by 2030 to ensure efforts are on track to meet the framework’s 2050 goals include halting or reversing the extinction rate, increasing the share of monetary benefits received by providers, including holders of traditional knowledge, deployment of adequate financial resources to implement the framework, and progressively closing the financing gap up to at least US$700 billion per year by 2030.
The GBF’s 21 targets are separated into three areas: reducing threats to biodiversity; meeting people’s needs through sustainable use and benefit-sharing; and tools for implementation and mainstreaming. Beyond the aforementioned Target 3, key targets focused on reducing threats to biodiversity include: Target 1, ensuring all land and sea areas globally are under integrated biodiversity-inclusive spatial planning, addressing land- and sea-use change, retaining existing intact and wilderness areas, and Target 2, which ensures that at least 20% of degraded freshwater, marine and terrestrial ecosystems are under restoration, ensuring connectivity among them and focusing on priority ecosystems.
Additionally, Target 7 aims to reduce pollution from all sources to levels that are not harmful to biodiversity and ecosystem functions and human health. This includes reducing nutrients lost to the environment by at least half, and pesticides by at least two thirds, and eliminating the discharge of plastic waste.
Target 15 – one of the eight targets providing tools and solutions for implementation and mainstreaming the GBF – is a key part of the GBF for investors. The target states that all businesses should assess and report on their dependencies and impacts on biodiversity. The aim is to progressively reduce negative impacts by at least half and increase positive impacts, reducing biodiversity-related risks to businesses and “moving towards the full sustainability of extraction and production practices, sourcing and supply chains, and use and disposal”.
If approved in full, Target 15 essentially means it will become compulsory for large businesses and financial institutions to assess and disclose their impacts and dependencies on biodiversity and nature. It will also provide a mandate for the Taskforce on Nature-related Financial Disclosure (TNFD), a market-led initiative established to create universal standards for disclosure and management of nature-related risks, impacts and dependencies, which released its third beta framework last week.
Other key targets in this section are Target 18, redirecting, repurposing, reform or eliminating incentives harmful for biodiversity, in a just and equitable way, reducing them by at least US$500 billion per year. Meanwhile, Target 19 aims to increase financial resources from all sources to at least US$200 billion per year, increasing by at least US$10 billion per year international financial flows to developing countries, leveraging private finance, and increasing domestic resource mobilisation.
The final subsection – meeting people’s needs through sustainable use and benefit-sharing – includes Target 9, ensuring benefits, including nutrition, food security, medicines, and livelihoods for people, and Target 10 which requires all areas under agriculture, aquaculture and forestry to be managed sustainably.
Road to Montreal
COP15 is being touted as the ‘Paris Moment for Nature’. But previous efforts to tackle biodiversity loss have over-promised and under-delivered. In 2002, the Parties to the CBD committed themselves “to achieve by 2010 a significant reduction of the current rate of biodiversity loss”, which failed to materialise. At 2010’s COP10 in Nagoya, governments agreed on ambitious global goals called the 20 Aichi Biodiversity Targets, but none of these were fully met by the 2020 deadline, with biodiversity further declining over this period.
Among the 10,000 registered delegates assembling for a new push at COP15, a core group will negotiate the final language, targets, details and commitments in the GBF text. The process will culminate in a three-day “high-level segment” where government ministers will join the proceedings to iron out remaining details in the final text. The majority of delegates will be “other stakeholders” from business and financial institutions, NGOs, Indigenous peoples, local communities and youth groups who participate as observers and in workshops, forums and other side events.
The road to Montreal has not been smooth. The CBD’s Open-Ended Working Group (OEWG) met in Nairobi at the UN Environment Programme’s headquarters in June 2022, for what was intended to be the last such discussion before COP15. However, the details of the meeting following the event showed that there was “more divergence than consensus” on the GBF. A follow up meeting of an ‘informal group’ was held in late September, with the conclusions released in October showing the document was “less bracket heavy”, although there were “significant” changes in certain areas. These included revised language around debt and direct access payments to be made to Indigenous communities for their contributions to conservation. Not all CBD countries were consulted about these changes.
Over the last weekend, the OEWG met again in Montreal, but the initial reaction has not positive. The World Wide Fund for Nature (WWF) criticised the lack of urgency and said it was concerned with the “desperately slow” progress. Lin Li, WWF International’s Senior Director for Global Policy and Advocacy, said: “What we’re seeing is government negotiators have come to Montreal, and are just repeating their fixed positions, showing no signs of compromising and seeking convergence. If we don’t start removing brackets and simplify text, the world will miss the chance to secure an ambitious agreement while nature continues to vanish around us. This is the kind of short-term mindset madness that has got us into this mess.”
Investors also have concerns. The Finance for Biodiversity Pledge recently released a position paper ahead of COP15 alongside 26 financial institutions – including Aviva, HSBC GAM, Robeco and LGIM – which are part of the Finance for Biodiversity Foundation’s COP15 delegation. The paper focuses on the need for appropriately rigorous wording to support Goal D, ensuring the “alignment of financial flows” with the goals of the GBF.
The paper says financial institutions “recognise the role” they need to play in reversing nature loss by 2030 and are “committed to ambitious action” through investment and lending practices, with signatories already taking initial steps to redirect financial flows away from environmentally harmful activities.
It is “critical” for all parties agree to explicitly include the alignment of all financial flows in the goals and targets of the GBF, the paper says, requesting rationale changes to Goal D, and suggesting, regarding Target 15, that it would be “useful to state that the target requires disclosure to be consistent with internationally recognised disclosure standards, such as the TNFD or the Global Reporting Initiative (GRI)”.
“Voluntary actions alone will be insufficient to change practices across the financial sector in a way that protects and restores biodiversity at the rate and scale required,” said Jan Erik Saugestad, CEO, Storebrand Asset Management. “It is therefore critical that the GBF creates the impetus for governments to create the enabling environment that will support and scale up actions from the financial sector to reverse biodiversity loss in this decade.”