Despite ongoing efforts, leading reports indicate that biodiversity – the diversity within species, between species and of ecosystems – continues to deteriorate faster than at any time in human history. Recent months have seen global efforts to halt and reverse biodiversity loss continue. Without this, the global economic impact would be profound: the World Economic Forum has estimated that more than half the world’s total gross domestic product is moderately or highly dependent on nature and its ecosystems.
In December 2022, 188 States from around the world reached agreement on the new Kunming-Montreal Global Biodiversity Framework. The Framework affirms the importance of biodiversity to human well-being and economic prosperity, playing a vital role as a source of food, medicine, energy, clean air and water and security from natural disasters. It sets out a number of goals and targets to halt and reverse biodiversity loss by 2030 both on land and at sea. Chief amongst these is a goal to protect 30 per cent of land and water considered important for biodiversity by 2030. (March 2023 saw a major step taken towards that goal, when States concluded a new international agreement on maritime biodiversity beyond national jurisdiction.) They also include, for example, global targets to restore 30 per cent of degraded ecosystems, to reduce pesticide risk by at least 50 per cent and to mobilise at least USD 200 billion per year in biodiversity-related funding by 2030. The Framework provides for implementation primarily through the translation of these global targets into national-level policy, in the form of updates to National Biodiversity Strategies and Action Plans.
The Framework was adopted following a four-year consultation and negotiation process under the auspices of the 1992 Convention on Biological Diversity. That Convention enjoys near-universal membership, with 195 States Parties as well as the European Union. The recent Global Biodiversity Framework was agreed at the 15th Conference of the Parties to the Convention in December 2022. While not legally binding, the Framework calls on States to monitor and report on progress at five-year intervals.
In the lead-up to its adoption, the Global Biodiversity Framework had garnered support from some 150 financial institutions, including banks, investors, and insurers, representing over USD 24 trillion in assets. While focused primarily on State action to protect biodiversity, in particular through National Biodiversity Strategies and Action Plans, the Framework also emphasises both a “whole of government” and “whole of society” approach.
Institutions that backed the Framework and other investors will be interested in new guidance on what the Framework means for responsible investment, issued jointly in April 2023 by the United Nations Environment Programme Finance Initiative, the United Nations-backed Principles for Responsible Investment and the Finance for Biodiversity Foundation. That guidance recommends three broad actions that investors can take on a voluntary basis to address the risks of biodiversity loss:
- “Integrating biodiversity into investment decision-making, recognising the importance of biodiversity within policy, strategy, governance, risk management, operations and targets and encouraging action among clients, peers and policymakers;
- Investing in innovative financial solutions (for example, green bonds or biodiversity credits) to help mobilise the USD 200 billion per year needed to meet the Framework’s objectives and scale up new investment opportunities;
- Disclosing nature-related dependencies, impacts, risks and opportunities, engaging with voluntary initiatives and anticipating likely regulatory developments to improve investment decision-making.”
It remains to be seen to what extent this “soft law” guidance may be integrated by individual States into national-level laws or policies in ways that regulate the activities of financial institutions and other investors.
The Parties to the Framework’s overarching Convention on Biological Diversity are due to meet again at the Convention’s 16th Conference of the Parties in Türkiye in December 2024. There, the Parties will seek to finalise details of a new Global Biodiversity Trust Fund, expected to be financed through contributions by companies using digital sequence information on genetic resources.
