Can the financial sector help protect biodiversity? Geneviève Morin, CEO of the Fondaction investment fund, which will take part next week in COP15 in Montreal, is convinced of this.
Finance and biodiversity are rarely seen as going naturally hand in hand. How can the two be related?
Nature does us a lot of services. And these services have a value. By dint of destroying nature, we find ourselves having to replace them. For example, when you cut down trees that capture carbon, then you have to find other methods. Ultimately, these are methods that cost more and are not necessarily as effective.
Endangering biodiversity is dangerous not only for humanity, but also for the economy. More than half of the economy is moderately or highly dependent on nature! To act as if there were no problem of limited resources, in a context of ever-increasing production, is to close one’s eyes.
This does not mean that nature should be bought by everyone! Important regulatory frameworks are needed and there is a need to raise awareness of the importance of the regeneration of nature. But if we want people to invest in it, they will have to be able to profit from it somewhere as well.
And how do we invest in the protection of nature? Are these investments profitable?
There is growing interest in this type of investment. But everyone is wondering how to make it profitable. We know how to make a forest that we cut profitable, but the forest that we keep standing and which renders services… who pays for these services?
For example, we have set up the Inlandsis fund, which finances projects to reduce greenhouse gas (GHG) emissions. These GHG reductions generate offset credits eligible for carbon markets, from which revenues are derived. The Inlandsis fund notably contributed to the purchase of the Woodbury Mountain nature reserve in Vermont, a few hours from Montreal, and to the protection of all the biodiversity it shelters.
We know how to make a forest that we cut profitable, but the forest that we keep standing and which renders services… who pays for these services?
It is very important that we manage to generate returns. I have people retiring with the money we invest!
But you have to dare to do something different and rack your brains. Instead of trying to find the most profitable investment and then wondering if it is not too harmful to the environment, we follow the opposite approach. We wonder: what would be best for the environment? How can we make this project work and be profitable?
However, the greenwashing practiced by some companies can fuel skepticism. Do you take a critical look at your industry?
Of course, you have to pay attention to greenwashing. This generates cynicism among the population, because people start not to believe in anything anymore. That’s why we’re pushing for common disclosure measures.
It should be understood that the issue of biodiversity is much more complex than that of climate change, which is however not simple! When we talk about climate change, we always come back to carbon. The ton of greenhouse gases in Montreal is the same as that in Beijing or Paris. On the other hand, as far as biodiversity is concerned, it is not the same everywhere.
There are global frameworks that exist, but there also needs to be work done locally, closer to the reality on the ground to determine what the priorities are in the area. Not all companies have the capacity to report on the 200 or more biodiversity indicators that exist around the world. But we can identify a dozen of the most important indicators in Quebec.
We started working on this with SNAP Quebec and the Center for Biodiversity Science in Quebec. There will be an update on where we are at COP15.
What exactly are you expecting from this COP15? What would make you happy with it?
Already, a small victory is that this will be the first year with a finance day. So we have succeeded in showing that it is necessary. We cannot rely solely on public funds, we also need private investment to preserve biodiversity.
The second small victory is that the Finance Montréal delegation that will take part in COP15 will be made up of approximately 120 people! This proves that there is enthusiasm and that things are moving in the sector.
We are part of the Finance for Biodiversity Pledge alliance, and we will push for an ambitious framework for biodiversity in the world. A lot of work has been done at this level in the last two years, with preparatory meetings.
In particular, we want to make governments aware of the importance of adopting a framework, which could make the Montreal Agreement the same thing for biodiversity as the Paris Agreement for the climate.
This interview has been edited for clarity and conciseness.