5 March 2021

Biodiversity COP launches 'finance engagement programme'

The secretariat of the Conference of Parties (COP 15) to the Convention on Biodiversity (CBD) has launched a ‘finance engagement programme’, which it says could help define a ‘roadmap’ to help financial institutions implement the CBD’s proposed framework.

It will hold a workshop event for financial institutions in May, according to Odile Conchou, who serves as the financial sector ‘focal point’ for the secretariat. She invited institutions to apply for the workshop, and said formal invitations will in coming weeks be sent to selected organisations.

Conchou was speaking at Environmental Finance’s Natural Capital Investment Conference on 4 March.

COP15 is formally due to be held in China in May, but will be delayed until an as yet undefined date later this year, Conchou said. It was originally due to be hosted in October 2020 but was delayed to May due to the coronavirus pandemic.

A draft Post-2020 Global Biodiversity Framework has already been published ahead of the event, where it is hoped 196 countries will sign up to binding targets to reduce negative impacts on biodiversity and promote innovation to help preserve it. 

“The COP15 to be held this year is as important for biodiversity as COP21 [in Paris in 2015] was for climate change,” Conchou said.

However, negotiations on the draft continue, she added.

The current text “defines four long term goals to be achieved by 2050 – not one big apex – and 20 action-oriented targets, as well as a monitoring framework with indicators to allow countries to report on what they have achieved,” Conchou said.

She said the engagement with the finance sector is new, and has been added to the programme of action in recognition of the important intersection of policy making and investment.

Conchou said the May workshop will aim to “identify proposals including milestones for the framework itself, aim at incentivising contribution of the financial sector in the development and implementation of this framework, and also to identify priority actions – something like an action plan or roadmap”.

“This [roadmap] could be taken forward both by the financial sector and by governments in the form of regulatory incentives. The implementation framework [would thus] aim to align the strategies and operations of the financial sector with the protection restoration and sustainable use of biodiversity.”

Conchou added: “Implementation of the framework will require an unprecedented mobilisation of financial resources from all sources.

“Very often I am asked why the framework is relevant to the financial sector. The answer is that, when it is adopted by countries, the countries will have to translate that into policies and regulation – this part is mandatory – and they will have to report on their actions. This will have direct consequences on the operations of companies and financial entities.

“Financial sector participation is essential to drive the agenda in a direction that is aligned with that sector’s experience of [economic] reality and that is sufficiently ambitious to achieve the level of action that the biodiversity crisis demands. Also to transform their own business models.

“The agreement will apply to the entire world – it is true that countries are not all at the same level [of accounting for impacts on biodiversity]. Countries could develop natural capital accounting taxonomies – the EU is developing one [as part of its sustainability taxonomy], but what else will we see in South America, Africa or Asia – will they develop other taxonomies, or work together?

“They could incentivise creation of markets to promote public private partnerships, blended finance and so on. To incentivise financial innovation they could develop regulation to ask companies and financial institutions to report on their actions in terms of biodiversity risk management or biodiversity positive financing.”

Conchou, who is also a member of the expert working group of the Task Force on Nature-related Financial Disclosures (TNFD), said devising ways to incentivise financial innovation is an area the TNFD could potentially help. She also suggested the TNFD, among other initiatives, could play a key role in developing a roadmap for the financial sector.

“Central banks and regulators will also have an important role to play,” she added.

Conchou said that a date for COP15 will be decided by the host country, China, and the COP secretariat.

“Everybody says we don’t have goals, targets adopted by countries [because of delays to hosting CBD] – but it will come.

“On the other hand [the delay] allows CBD and partners to go much more into the questions, issues and work with other partners – so in that respect it is not so bad.”

Conchou was speaking on a panel titled ‘The global governance and legislative agenda’, alongside Rhian-Mari Thomas, CEO, Green Finance Institute, Joris van Toor, policy advisor, De Nederlandsche Bank, Chris Dodwell, head of policy & advocacy and director, Impax, and Caitlin McErlane, partner at Baker McKenzie Financial Services & Regulatory Group.

To watch this session on demand register for the Natural Capital Investment Conference here.