#12 Nature Finance
The relationship between nature and finance is at the core of building an inclusive, sustainable world.
Nature Finance focuses on leveraging financial tools, investments, and economic incentives to protect and restore our planet's ecosystems, promoting sustainable development and biodiversity conservation.
Why Nature Finance?
According to Task Force on Task Force on nature Markets :
Nature and its contributions have historically been mis-valued, and its economic benefits inequitably distributed. Our current model sees the economy outside of nature and treats it as an afterthought.
2. A surge in the monetarisation of nature
The increasing value attributed to nature could make a major positive difference, but unchecked monetarisation of nature could result in another round of nature-destructive and inequitable outcomes.
3. An historic opportunity
The future of the global economy and livelihoods depends on a living and thriving nature. By placing nature and equity at the heart of nature markets, we can reset the relationship between us, our global economy, and nature.
What are Nature Markets? The Nature MArkets Task force defines them as
Three key types of nature markets, highlighting their breadth and diversity.
Debt-for-Nature swaps are one kind of Nature Finance.
A whole lot of nature and biodiversity in forests, lakes, coral reefs, rainforest, mangroves, are in emerging and developing countries.
Those counties don’t always have the financial resources on hand to protect that nature, or to prevent it being extracted or transformed into a money making use (eg rainforest to palm oil plantation).
This is exacerbated by large government debts that those developing countries owe to wealthier nations or orgs like the IMF or Wolrd Bank
…… enter Debt for Nature swaps ... they allow these countries to restructure their huge debts in exchange for a commitment to protect the nature we all need
US$ 100 trillion global economy is 100% dependent on nature. From the food we eat, the water we drink, our mobile phones and streaming services, to the homes we live in and our efforts to manage climate change.
Nature is being degraded at unprecedented rates, with financing patterns continuing to drive nature destruction and global temperature rises.
Nature Finance is a transformative approach that recognizes the vital role of nature in our global economy, as it sustains every aspect of our lives. With nature facing unprecedented degradation and financial systems contributing to its destruction, Nature Finance aims to urgently and radically reshape the global financial landscape. By integrating nature-related risks and opportunities, Nature Finance paves the way for innovative pathways that align global finance with equitable and nature-positive outcomes. Its objective is to secure a sustainable future where finance and nature thrive in harmony, benefiting both humanity and the planet.
“Policymakers need to define and include the concept of nature-positive economic activities in their existing and developing taxonomies”
- WWF
According to a report of the United Nations, nature conservation funding must triple globally this decade
According to the latest United Nations Environment Programme (UNEP) State of Finance for Nature report, nature-based solutions currently attract USD 154 billion per year – less than half of what’s needed by 2025, and only a third of that required by 2030 if we’re to meet global climate and biodiversity targets.
What’s more, public funds make up 83 percent of this financing, and only 17 percent comes from private accounts. This is simply not enough: as Yuriko Backes , Luxembourg’s minister of finance, said, “what is also clear is that transitioning to #netzero [cutting greenhouse gas emissions to as close to zero as possible] and achieving our SDGs [Sustainable Development Goals] will not be possible through public investment alone.”
Crucial Deals
COP15, held in Kunming, China, in 2021, aimed to set new global targets and strategies for biodiversity conservation beyond the year 2020. As part of the negotiations and discussions, Nature Finance played a significant role in addressing the financial aspects of biodiversity protection and sustainable development.
Objectives:
Understanding the relationship between finance and nature is key to achieving the goals set by the GBF. On December 10th, 2022 NatureFinance launched a new Alignment Tool designed to track how financial flows are supporting the protection and restoration of nature. Partners and pilots announced include Brazilian investment bank JGP Crédito, UNDP BIOFIN and NatureAlpha. With support from the Swiss Government (SECO), NatureFinance’s Alignment work presages a significant push in this space in the coming year.
"Global leaders must finance nature now to protect and restore biodiversity, and to better integrate the responses to climate change and biodiversity loss, says Deborah Lehr on #WorldBiodiversityDay"
Source: The Paulson Institute
?? BREAKING ??
Swiss Life Asset Managers France has signed the Finance for Biodiversity #pledge on World #BiodiversityDay! The United Nations has proclaimed 22 May as the World Biodiversity Day to increase understanding and awareness of biodiversity issues.
Alice Ross poses this thought-provoking question for #capitalmarkets in Financial Times.
"Only once institutions and #capitalmarkets can offer more innovative fund choices - that embrace novel but promising new methods and instruments to value nature more scientifically, for example - will direct investment in the #systemic value at risk from #natureloss be possible in the scale needed. "
The U.S. is the only country in the world that has not yet ratified the 1992 treaty that established the United Nations Convention on Biodiversity.?
María Mendiluce published a brilliant article about the importance of not misdirecting the climate critique, prompting to focus our attention on those who are actually doing something to change things.
"If all our efforts go into catching greenwashers, we will unwittingly let the most determinedly business-as-usual companies off the hook and block desperately needed investment into #nature protection and restoration."
Late last Saturday in New York (05/06/23), exhausted negotiators reached a landmark agreement on protecting life on Earth: the high seas treaty, the second big environment deal in just three months after Cop15, the biodiversity summit in Montreal. The moment, nearly two decades in the making, overwhelmed the president of the conference, Rena Lee, who cried as she announced that a deal had been done.
?The high seas treaty “brings marine protection into the 21st century”, says Li. “Building on the recent success of biodiversity Cop15, the high seas treaty will help fulfil the 30x30 target. This success indicates that environmental progress and multilateralism can still triumph despite challenging geopolitical conditions. China is a critical country in these negotiations. Its willingness to upgrade marine governance is a key element to unlock the deal.
The Paris Agreement is a legally binding international treaty on climate change. It was adopted by 196 Parties at the UN Climate Change Conference (COP21) in Paris, France, on 12 December 2015. It entered into force on 4 November 2016.
Its overarching goal is to hold “the increase in the global average temperature to well below 2°C above pre-industrial levels” and pursue efforts “to limit the temperature increase to 1.5°C above pre-industrial levels.”
"As #climatechange, #nature loss, pollution and social issues become more urgent than ever, @UNEP_FI and the global banking sector are working together to drive ambitions and the Paris Climate Agreement. Read more: https://ow.ly/5nFH50Ot9sp"
?Five Key Takeaways from COP27:
"How can businesses help boost biodiversity protection and recovery while securing economic prosperity?
The article "Seeding Private Sector Interest in Biodiversity" by GCF experts Ayaka Fujiwara and Tatiana Kan, and Ivey Business School Associate Professor Diane-laure Arjaliès explores the vital role of private sector capital and concessional finance in safeguarding nature. It examines the barriers to private sector action and showcases case studies, such as the Global Fund for Coral Reefs, and other successful structures that prioritise investments in biodiversity.
Access the article via the Ivey Business Journal: https://g.cf/3W7bzHv"
Source: Green Climate Fund
"Ecuador has launched a debt-for-nature deal that will wipe out some $1 billion in interest payments in exchange for boosting its protection of the waters around the Galápagos Islands, reports Elizabeth Alberts.
Much of the funding will focus on managing the newly established Hermandad Marine Reserve, the existing Galápagos Marine Reserve, and sustainable fishing and climate resilience efforts.
The deal would also finance an endowment to generate ongoing funding for marine conservation in the Galápagos Islands.
This is the world’s largest debt-for-nature deal to date." Rhett Ayers Butler
The 2023 UN Climate Change Conference will convene from 30 November to 12 December 2023?in Dubai, United Arab Emirates (UAE). It will comprise:
"If COP28 is to be successful, negotiators will have to accept that: 1. Energy security is key and non-negotiable for most (all?) countries. 2. Not every country has the same amount of zero-carbon energy sources."
"??? Mark your calendar!
From sustainable #finance summits to water management conferences and everything in between, here is your guide to the most important #climate events in 2023."
GLF–Luxembourg Finance for Nature: What Comes Next?
When: 7 March 2023
Where: Online & Luxembourg
More info: Website
3rd Global Soil Biodiversity Conference
When: 13–15 March 2023
Where: Dublin, Ireland
More Info: Website
UN 2023 Water Conference
When: 22–24 March 2023
Where: New York, NY, United States
More info: Website
The 6th Nordic Conference on Climate Change Adaptation, NOCCA23
When: 17–19 April 2023
Where: Reykjavík, Iceland and online (day 1 only)
More info: Website
Bonn Climate Change Conference
When: 5–15 June 2023
Where: Bonn, Germany
领英推荐
More info: Website
The 36th Conference of the International Association of Climatology
When: 3–7 July 2023
Where: Bucharest, Romania
More info: Website
World Water Week 2023
When: 27 August – 1 September 2023
Where: Stockholm, Sweden and online
More info: Website
8th Asia-Pacific Climate Change Adaptation Forum (APAN Forum)
When: 28 August – 1 September 2023
Where: Incheon City, Republic of Korea
More info: Website
2023 Sustainable Development Goals Summit
When: 9–20 September 2023
Where: New York, NY, United States
More info: Website
Climate Week NYC 2023
When: 18–24 September 2023
Where: New York, NY, United States
More info: Website
Leading experts making remarkable contributions to Nature Finance:
Their exemplary efforts in promoting sustainable finance, driving innovative financing mechanisms, and advocating for the preservation and restoration of our precious natural ecosystems have inspired many and set a new standard for excellence in the field. Your contributions are instrumental in shaping a more sustainable and resilient future for our planet.
By tagging you, I hope to amplify your incredible achievements and provide a platform for further collaboration and knowledge-sharing within our professional network.
I invite esteemed readers of this newsletter to suggest and tag other experts, reports, or upcoming events that you believe are relevant to the topic of Nature Finance.
Let us create a more comprehensive and inclusive network of knowledge and expertise.
Please feel free to reach out to me directly or leave a comment.
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