COP15 round-up: FIs call for global biodiversity framework

Financial news from Montreal: G7 countries launch sustainable mining alliance; FfB launches guide on biodiversity integration.

A statement coordinated by the Principles for Responsible Investment, the UN Environment Programme Finance Initiative and the Finance for Biodiversity Foundation has called on world leaders to adopt a global biodiversity framework at COP15. The signatories, which represent $24 trillion in collective assets, have called for an “ambitious post-2020” framework to ensure the halt and reversal of nature loss by 2030. They have asked governments to set a clear mandate for the alignment of financial flows and global biodiversity similar to Article 2.1(C), which set clear policies on climate change within the Paris Agreement. Signatories include AXA Group, Manulife Financial Corporation, Fidelity International, Groupe La Banque Postale, Shinhan Financial Group, Sumitomo Mitsui Trust Asset Management and UBS Bank.

Canada and G7 countries have launched a sustainable mining alliance to encourage mining companies to adopt more environmentally and socially responsible standards. The alliance was announced by Canada’s natural resources minister, Jonathan Wilkinson, at COP15. It will aim to extend Canada’s mining strategy, which seeks to produce coal in an environmentally sustainable way, guarantee equity for indigenous communities and improve global security. It comes as countries seek to ramp up their critical mineral supply chains while also reducing China’s dominance. Italy is the only G7 country not to have joined the alliance.

The Finance for Biodiversity Foundation (FfB) has launched a guide on biodiversity integration. The guidance was launched by HSBC Asset Management’s global stewardship lead for biodiversity and investment stewardship, Clinton Adas, at COP15 yesterday. The guide provides financial institutions with advice on how to integrate biodiversity into their financing activities and decision-making, as well as how to start measuring impact and setting targets.

Nearly a quarter of Aviva’s corporate holdings by value have “some level of exposure to deforestation risks”, the insurance giant’s first biodiversity report has found. More than half of these are financial institutions which are exposed via the companies they finance. Published earlier this week, the report aimed to highlight Aviva’s positive and negative contribution to global biodiversity goals across financing activities, investment portfolios and underwriting. The findings will inform the firm’s engagement strategy going forward and will be built on in 2023 to include more data on agricultural commodity trade flows.

This week also saw Aviva, in partnership with WWF, call for a globally agreed nature positive goal, as well as measurable, legally binding, national nature goals aligned with the upcoming Global Biodiversity Framework. The pair made the recommendations at COP15 in a new seven-point pathway to mobile finance for the nature crisis.

The Inter-American Development Bank (IADB) has said that it is committed to aligning its operations with the UN’s Global Biodiversity Framework. The IADB has developed a plan for mainstreaming natural capital and biodiversity across the organisation for approval in early 2023. It will be the first multilateral development bank (MDB) with a dedicated natural capital and biodiversity mainstreaming strategy. The IADB, which is leading on nature-based solutions in Latin America and the Caribbean, plans to continue its work on nature-positive finance alongside other MDBs, as well as developing a green finance target. It is also working on implementing the MDB joint statement on nature, people and planet, which it led at COP26.

The International Sustainability Standards Board (ISSB) has announced plans to research “incremental enhancements” that complement the Climate-related Standard, including relating to natural ecosystems and the just transition. To deliver this, the ISSB will consider the work of the Taskforce for Nature-related Financial Disclosure (TNFD) and other existing nature-related standards and disclosures where they relate to the information needs of investors. Addressing COP15 delegates on Wednesday, Emmanuel Faber, chair of the ISSB, also announced the appointment of two additional special advisers to provide strategic counsel on issues relating to natural ecosystems and just transition.

The International Union for Conservation of Nature (IUCN) has found that more than $26 billion of finance was unlocked to implement restoration commitments in 18 countries across Africa, Latin America, Asia and Europe in the past year. The finance restored a total of 14 million hectares of land, created 12 million jobs, sequestered 145 million tonnes of carbon and benefited threatened species across 600,000 hectares, according to the flagship nature Restoration Barometer report. The research, which was launched at COP15, was endorsed by more than 50 governments and developed by the IUCN with the support of the German Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection. The 18 countries have committed to restoring 48 million hectares of land by 2030.

Directors may face the risk of liability for a failure to consider biodiversity risks in governance and disclosure if this breaches the duties of care or loyalty, according to a new report. Biodiversity Risk: Legal Implications for Companies and their Directors was authored by Jennifer Ramos and Zaneta Sedilekova at the Commonwealth Climate and Law Initiative (CCLI).

MSCI is due to launch nature tools early next year to support investors in assessing biodiversity loss and deforestation risk in portfolios. The screening metrics, which were announced at COP15, combine thousands of ESG and climate data points, overlaid with MSCI’s proprietary geolocation data, which helps pinpoint a company’s operations. The biodiversity-sensitive areas tool will help investors identify companies with physical assets located in areas of high biodiversity, and the deforestation tool will flag any companies exposed to deforestation-related risks, including those which directly or indirectly contribute to deforestation.

French companies Kering and L’Occitane Group have collaborated to jointly finance nature protection through the launch of the Climate Fund for Nature. The fund, which will be managed by Mirova, will mobilise resources from the fashion and beauty sectors to protect and restore nature, with a particular focus on the empowerment of women. It has a target of €300 million and has already received €140 million in commitments.

NatureMetrics has launched a nature performance monitoring service powered by eDNA technology. The performance data has already detected over 3,200 endangered and protected species across more than 85 countries, according to the global nature technology company. The subscription service provides continuous nature impact monitoring at scale, enabling the standardised performance measurement of natural ecosystems.