We are convening today for one simple reason: we are not putting enough money into the conservation and sustainable use of biodiversity, endangering the success of the Global Biodiversity Framework, or GBF, before it is even agreed.
Some estimates put the global biodiversity funding gap at USD 598-824 billion per year by 2030. UNEP’s of State of Finance for Nature identifies a USD 4.1 trillion financing gap in nature by 2050. Such estimates are not pessimistic when we consider the state of play today. Investments in nature-based solutions, for example, amount to USD 133 billion today. These investments need to at least triple by 2030 and increase four-fold by 2050 from the current level.
How do we get there? Governments need to do more, yes. We need to see enhance regulation that will create the pathway for long-term sustainable investments. We need to see central banks lean in and assess the risk profile and stress test the viability of agriculture and fisheries investments that are built on undermining natures ability to sustain itself in the long run. We need to see policy reforms, such as redirecting harmful agricultural and fisheries subsidies, while ensuring food remains affordable for less affluent communities. We need to see efforts to reduce risk to public and private investors. We need to see new financial innovations.
But public finance cannot do it all. Some 86 per cent of current investments in nature-based solutions come from public sources. The investments are too low, yes, but they show that the public sector is doing most of the lifting right now. The private sector should be bringing in a much larger share of nature finance, which is in the sector’s own best interests. Risks to nature pose risks to businesses, as around half of the world’s depends on nature. Meanwhile, a new nature economy can generate USD 10 trillion in business value and create 395 million jobs by 2030.
Negotiators finalizing the GBF can help to unlock private and public finance at a massive scale by setting the enabling environment for alignment of finance to nature.
The first draft of the GBF includes a dedicated Goal of Finance. This goal calls for closing the gap between available financial and other means of implementation to achieve the 2050 Vision. This is positive, but the language should go further to promote full alignment of financial flows with the goals of the GBF. Strong language at goal level could yield a transformative change in how the public and private sector, including financial institutions and real economy players, view nature.
The climate space has taught us much about using alignment to shift finance.
The Paris Agreement had three clear objectives: mitigation, adaptation and finance. Article 2.1c on alignment of financial flows set the stage for private actors to converge and mobilize. Under the Glasgow Financial Alliance for Net Zero, more than 450 financial institutions announced their commitment to net zero by 2050. This represents USD 130 trillion in private capital. The three largest Alliances – banks, insurers, investors – are convened by the UN.
These finance sector commitments also spur the ambition of real economy players. Now, over 4,000 businesses have committed to align their business models with 1.5 degrees C and net-zero emissions by signing up to the UNFCCC’s Race to Zero campaign.
So the question that we need to answer is what this will look like when it comes to biodiversity and nature? Where and how will we find a return to the investor so that, say, your pension and mine, invested in nature’s bounty, will provide a sufficient return when we retire? Clearly, the focus will — at least initially — be on investments in sustainable food systems, sustainable agricultural production and sustainable forestry.
Friends, let me therefore focus on action in food systems which will be particularly critical.
We know our food systems drive biodiversity loss, both in terms of how we produce and how we consume and waste. If we shift financial incentives in favor of nature-positive consumption and production, we can achieve success under the GBF.
The financial sector can accelerate the deployment of private capital flows in emerging markets and developing countries. The sector can also remove deforestation from its investment portfolios. Some opportunities include making concessional finance available to accelerate the transition to “net zero, nature positive” sustainable agriculture, forestry and fisheries. The UNEP-supported Good Food Finance Network can accelerate this transformation, offering a way for finance stakeholders to work together on food and finance.
I am sure this workshop will further explain what this alignment issue means and shows how it is already applied by some financial institutions. I hope you can take your new knowledge out into the world and help to start unlocking the finance we need to make the GBF a success and protect the biodiversity that is so critical to our health and wealth.
Thank you.
