Although nature is loved by all, it will be difficult to find all the money necessary to stop and then reverse its loss of biodiversity, I noticed while going to snoop at COP15. A great challenge for sustainable finance.
The term “30 x 30” that has caught the eye alludes to the 30% of the earth and 30% of the water that must be protected by 2030. But it also refers to the 30 billion US dollars* of annual aid to developing countries promised from 2030.
This second 30 x 30 is a compromise. The rich countries were reluctant, those who are unable to deliver the 100 billion per year promised to the South to fight against global warming. For its part, Canada has announced a contribution of 1.5 billion Canadian dollars, with no recurrence commitment.
The Kunming-Montreal agreement on biodiversity aims to mobilize at least 200 billion for the South, from all sources, national, international, public and private.
This effort would only partially meet the investments required in the North and the South, estimated at 700 billion per year. The agreement provides that the missing 500 billion will come from the 1,800 billion in agricultural subsidies, harmful to biodiversity, which will have to be reformed. The calculation is simple, but the maneuver is extremely risky for any government.
Finance discovers biodiversity
I am hopeful that sustainable finance will provide a large share of the capital, bolstered by the political leadership of the agreement, now that it better understands that global warming and the preservation of biodiversity are one and the same struggle, that the same dollar can serve both causes.
Judge for example by this green shoot that is the proposal of the British bank NatWest to set up for Brazil a bond financing of 10 billion, whose interest rate would depend on the achievement of President Lula’s objective. : to stop deforestation in the Amazon by 2030, verified by satellite.
For the first time at a COP on biodiversity, a day was devoted to finance, which brought together 400 participants. One hundred and fifty institutions with assets of 24 trillion unveiled an action plan to align financial flows with the vision, goals and targets of the agreement1.
Corporate responsibility
A highlight was Emmanuel Faber’s speech2the monk-soldier of sustainable finance, former boss of the French multinational Danone, now chairman of the International Sustainability Standard Board (ISSB).
Faber is not asking bosses to save the planet, “but to save their business, because it depends entirely on nature. Climate change will redefine competitive advantages for all companies, all investors, all countries! “.
“The value created by a company is inextricably linked to the stakeholders it works with and serves, the society in which it operates, and the natural resources on which it depends,” he said.
Sustainability is the capacity of a company to maintain and develop its relationships over time, to manage its dependencies and its impacts throughout its business ecosystem, its entire value chain.
Emmanuel Faber, Chairman of the International Sustainability Standard Board (ISSB)
It allows a company to maintain its access to the human, natural and financial resources it needs to achieve its objectives; resources that it must “preserve, develop and regenerate” if it ultimately wants to provide value to its investors.
These words are not just a speech of circumstance, but the philosophical foundation of the ISSB, which will be incorporated into its draft general standard noh 1. This definition of sustainability will guide companies, which will no longer be able to settle for fragmented ESG (environmental, social and governance) indicators, skilfully chosen to look good.
The standard noh 2 on climate will be extended to biodiversity and the just transition for human capital, announced Faber, who has just joined as special adviser Geordie Hungerford, chief executive of the First Nations Financial Management Board .
The set of ISSB standards will bring order to the information that companies must disclose, in order to inform the decisions of investors and lenders.
This COP marks significant progress with the commitment of sustainable finance to biodiversity. On the political level, we salute the collaboration of the Chinese and Canadian Ministers of the Environment, Huang Runqiu and Steven Guilbeault, to forge the Kunming-Montreal agreement. The sharp tensions between the two countries have not disappeared, but it will be important to preserve this space of cooperation for the planet.
* Amounts are in US dollars, unless otherwise indicated.