Investing in the future: finance’s role in restoring nature

Almost one year after the launch of “Sustainable Finance at Scale", welcome to a special edition, where we revisit the subject of our inaugural issue: biodiversity.

The prospect of global warming exceeding 2°C looms large, threatening the survival of animal species and seagrasses worldwide. Now recognised as a critical tool in fighting climate change, finance also has the potential to counter and reverse biodiversity loss, thanks to a myriad of solutions that extend far beyond investment.

• In 2020, a seismic shift occurred when the World Economic Forum published its New Nature Economy Report, proving that “protecting and restoring natural ecosystems can lead to economic growth and create new business opportunities”, recounts Verleye Ines , Senior Biodiversity Expert, PFS Environment (Belgium) & Head of the Belgian Delegation to Biodiversity COPs. This insight motivated an unprecedented number of private companies to attend the December 2022 COP15, where they made a significant contribution to the landmark Kunming-Montreal Global Biodiversity Framework.
• By setting ambitious targets to be reached by 2030, such as protecting 30% of the planet and significantly increasing funding for conservation, the Kunming-Montreal Agreement has proven a massive stride for nature. Yet it wasn’t the only success born of COP15, where a coalition of investors dubbed Nature Action 100 emerged with an aim to push companies and policymakers to reverse nature loss by 2030. Launched by 11?institutional investors, including BNP Paribas Asset Management , the initiative seeks “to engage companies in key sectors that are deemed to be systemically important in reversing nature and biodiversity loss by 2030” and to ensure they are efficiently protecting and restoring ecosystems, says Adam Kanzer , Head of Stewardship Americas at BNP Paribas Asset Management.
• Restoring ecosystems is in fact fast emerging as a collective priority, made all the more urgent by the European Parliament’s recent decision to compel the EU to implement restoration measures by 2030, covering at least 20% of its land and sea. In this area, finance can play a particularly powerful role.

• Yet the success of restoration efforts – such as those Nature Action 100 promotes – depends largely on our ability to assess corporate impact on biodiversity. “Mapping a company’s impact on biodiversity could be likened to playing with Russian nested dolls”, says Robert-Alexandre Poujade , ESG Analyst and Biodiversity Lead at BNP Paribas Asset Management, “because you will find pieces within pieces, making it difficult to establish a cause-and-effect link?between a company’s business and its impact”. To overcome this hurdle, BNP Paribas has partnered with ICEBERG DATA LAB , which uses published data and estimates to compute the biodiversity footprint of thousands of companies. On the biodiversity side, the new Species Threat Abatement and Restoration (STAR) metric now helps identify the actions most beneficial to threatened species, providing a valuable guide for investment decisions.
• It’s not just quantitative evaluation that’s becoming more elaborate – so are financial mechanisms. In Brazil, where $18-26 billion must be invested in nature annually to reach net-zero, BNP Paribas is financing conservation by tying interest charges to biodiversity performance indicators and targets, providing yet another example of the role finance can play in biodiversity conservation. By weaving together financial and ecological goals, the sector may well emerge as a crucial guardian of our ecosystems!
• To learn more about how BNP Paribas is leveraging its tools to sustain viable levels of biodiversity, read our latest issue of Perspectives.

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New frontiers?

Every day, innovators are working to shape the future of agriculture and biodiversity.

• Case in point: the startups supported by BNP Paribas Asset Management’s Ecosystem Restoration Fund are developing solutions as diverse as precision fermentation (to replace animal products), cellular agriculture (to diminish our reliance on traditional livestock), or indoor agriculture (for pesticide-free, resilient crop yields). Read on to find out about the companies revolutionising agritech!

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Explorers

• Deep-sea mining is a hot topic among countries eager for new revenue sources and energy transition metals. But what about its effects on biodiversity? As the International Seabed Authority edges closer to a decision on whether DSM should be allowed in international waters, our experts Yves Floch and Jacky Prudhomme dive into mining’s considerable impact on fragile sea life.

Milestones

Embracing biodiversity in urban areas is not just a noble idea; it's a powerful strategy to create sustainable and thriving cities.

• BNP Paribas Real Estate has been leading the way since 2018 by integrating the natural environment into their building projects. By creating nature-based corridors that link natural areas and urban spaces, their initiatives showcase how buildings can be designed to enhance local biodiversity.
• With the help of Biodiv’Corp, BNP Paribas Real Estate was able to implement an orchard, vegetable gardens, and a shelter zone for fauna and flora at their Métal 57 headquarters in Paris. This project demonstrates that enhancing biodiversity doesn't have to be costly but is rather just a matter of dedication and willpower, which can result in substantial human and environmental benefits.
• When practices like this become commonplace, the impact is multiplied. Like Catherine Papillon , Head of Sustainability/CSR at BNP Paribas Real Estate says, “As the number of these facilities increases, so does their contribution to urban biodiversity.”

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From the observation post

“Biodiversity”: behind this simple term, thousands of fascinating species and incredible ecosystems.

• Looking for a great end of summer listen? Dive into the BBC Earth podcast, where two zoologists uncover the hidden wonders of the natural world.

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