The results of the latest round of high-level negotiations ahead of the COP15 conference on biodiversity, which were released on Sunday, prompted a mixed response from investors.
Held over six days in Nairobi, the discussions concerned the Post-2020 Global Biodiversity Framework, which is expected to be finalised at COP15 in December, and involved the Parties to the UN Convention on Biological Diversity (CBD).
Summarising the discussions, the CBD said in a statement: “Delegates took the text from the March meetings held in Geneva, rationalised parts of it, achieved consensus on several targets, and proposed diverse options for large parts of the framework. Parties set out their ambitions with respect to the goals of the framework, and refined the essential targets related to conservation, sustainable use and benefit-sharing.”
Negotiations covered the entire framework text, which includes four goals, 23 proposed targets, and all of the elements that will enable nations to meet them.
For the finance sector, Goal D, and Targets 14 and 15, are seen as the most relevant.
According to the CBD’s statement, Goal D is about ensuring an “adequate level of the means of implementation are enabled, including financial resources, capacity building and other supports to action”.
Further information is provided in the draft recommendations submitted by the co-chairs following the Nairobi negotiations, in which Goal D is given two potential definitions. While still in draft format, the aim is to ensure that adequate means of implementing the framework are employed by Parties with public and private financial flows aligned with the 2050 Vision.
Meanwhile the targets touch on aligning public and private activities – as well as financial flows – with the Framework, and business and financial institutions assessing and reporting their dependencies and impacts on biodiversity.
Emine Isciel, head of climate and environment at Storebrand Asset Management, was in Nairobi representing the Finance for Biodiversity Foundation. She told Responsible Investor that – in regards to Goal D – while governments recognise the need to align private financial flows with the biodiversity goals and targets and the importance of mainstreaming biodiversity in all sectors, “discussion around the role of finance and business has advanced slowly”.
Asked why this was the case, Isciel said there was still resistance among some parties to the concept. At the same time, she added, “most are supportive”.
Also responding to discussions on Goal D, Jessica Smith, nature project lead at UNEP Finance Initiative, told RI: “There has been a good level of interaction with the business and finance community and it’s a fantastic result that the wording under consideration still contains clear reference to the alignment of all financial flows, public and private, with the goals of the framework. This means that language is being crafted that will result in real mainstreaming and systems change across the global economy. We look forward to it being ratified at COP15 later this year.”
With regard to Target 15, Isciel stressed the need for it to explicitly put forward mandatory disclosures. “If all the elements fall into place, the Convention on Biological Diversity could be recommending that countries’ financial regulators require companies to assess and disclose their impact on nature to reduce negative impacts and increase positive impact. This would potentially be the most significant developments from Nairobi.”
As an official observer to the CBD, the Finance for Biodiversity Foundation can participate in the negotiation process of the Framework.
Also speaking on behalf of the foundation, Suresh Weerasinghe, head of EU and international public policy at Aviva, said in Nairobi that the initiative embraces the idea of mandatory disclosure to stimulate action by financial institutions, as well as the need for the alignment of flows with targets.
He concluded: “In this way, the framework will frame the basis for driving further regulatory action to require the financial sector to fully play its role in positively addressing this biodiversity crisis. We will discuss further in contact groups, but believe specific references in Goal D and Targets 14 and 15 will enable this and we look forward to the brackets being removed in these very important provisions.”
Following the closing of discussions, Weerasinghe told RI: “It was pleasing to see the progress at the talks and the recognition by parties of the role of the financial sector in reducing harmful impacts on biodiversity and in incentivising positive impacts. We look forward to seeing the relevant parts of the Framework dealing with the policy goals and targets in respect of the financial sector and private financial flows being confirmed in Montreal.”
Speaking more broadly about the pre-COP15 talks, Eoin Murray, head of investment at Federated Hermes, told RI: “Following on from the talks held in Geneva in March this year, the hope was that this follow-up meeting of 195 states in Nairobi would help set the scene for bold agreement on a Paris-like, climate-scale proposal for biodiversity in Canada later this year. However, it appears that the discussions may have stalled on the thorny issue of finance and who is to pay for the work necessary to achieve the bold objective.
“Much works remains to be done, but there’s still time to reach agreement and investors are ready to play their role with the appropriate allocation of capital.”
Eve Gleeson, ShareAction’s biodiversity research manager was also concerned that not enough was achieved last week.
“With talks in Nairobi failing to generate a comprehensive and COP-ready framework, there is much work for government negotiators to do before December. The Framework must feature data-driven targets, an agreement on common goals, and clear-cut pathways for addressing financial sector contributions to biodiversity loss,” she told RI.
It was confirmed last week that COP15 will take place in Montreal on 5-17 December. The conference was originally scheduled to take place in Kunming, China, in 2020 but has been repeatedly postponed due to the pandemic. China will retain its role as president and chair of the event.