Sustainable finance organizations call for action on  natural capital investment

The organizations Environmental Finance, Finance for Tomorrow, Global Landscapes Forum, Mirova and IDH – The Sustainable Trade Initiative organized three events in November 2019 dedicated to exploring ways of investing in natural capital. These events aimed to create common ground and understanding about natural capital investments, help build a track record for investors, and foster partnerships among stakeholders. This Outlook 2020 builds on that experience, in order to share recommendations for actions to enable systemic change in a joint outcome.

Since those events took place, the international community has been fundamentally shaken by the COVID-19 crisis. In Europe, institutions are prioritizing measures to protect people and their livelihoods from the crisis. They have also warned of delays with regard to the EU Green Deal.

At the same time, experts have been increasingly highlighting the relationships between biodiversity loss, land degradation, globalization and the vulnerability of our systems to pandemics.  “Diseases are more likely to travel further and faster than before, which means we must be faster in our responses,” Brian Bird, a research virologist at the University of California Davis, told the publication Scientific American. “It needs investments, change in human behaviour, and it means we must listen to people at community levels,” said Bird.

Put another way, the immediate short-term priority for the world must be to protect people from the coronavirus and prevent its spread. “But our long-term response must tackle habitat and biodiversity loss” said Inger Andersen, executive director of the UN Environment Programme, in an interview with The Guardian newspaper.

Even if the outlook for 2020 – the Super-Year for Nature – is disrupted, it is more  important now than ever to share insights, to plan ahead, and to respond effectively to the ongoing biodiversity and climate crises.

The need is as strong as ever: Global Assessment data from the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services  (IPBES) states that 75 percent of land has been “severely altered” or damaged by human activity; and 66 percent of marine environments similarly affected.

The UNDP Biodiversity Finance Initiative (BIOFIN) estimates that the annual investments need to protect biodiversity total over US$400 billion. But we can track only US$52 billion as of 2019. Investors have the capacity and the responsibility to fund innovative business models building on nature-based solutions, such as agroecology, ecotourism and sustainable forestry, as well as green infrastructures.

This publication is part of a collective, sustained effort by Environmental Finance, Finance for Tomorrow, Global Landscapes Forum, Mirova and IDH – The Sustainable Trade Initiative, to mobilize economic actors in building sustainable landscapes and protecting our climate, land and biodiversity – as well as our health.

This document provides recommendations for actions that are necessary to enable systemic change:

  1. Use innovations and game changers to develop the Natural Capital Market
  2. Applying landscapes approaches for inclusions and de-risking
  3. Need for blended finance
  4. Harmonizing green finance taxonomy and E&S monitoring

To mobilize the billions worth of investments needed, we must shift the system and help the financial sector in this process. In order to integrate natural capital and conservation finance into mainstream activities, banks and asset owners must know the specificities of the sector, financing techniques and risk, return and impact profiles. To speed the transition, the worlds of biodiversity and finance should talk to each other: the need is urgent for communication between scientists, investors and policy-makers.

Time is running out. Environmental Finance, Finance for Tomorrow, Global Landscapes Forum, Mirova and IDH – The Sustainable Trade Initiative are calling for bold strategies to preserve biodiversity in the post-2020 agenda. All stakeholders must cooperate and raise their voices to sustain the ambition for a “New Deal for Nature”. | | | |

Download the Outlook Report here

Download the Executive Summary here