Putting nature at the heart of business and finance
Nature underpins our global economy to the tune of US$125 trillion worth of natural…
Nature underpins our global economy to the tune of US$125 trillion worth of natural ecosystem services–the equivalent of 1.5 times global GDP– through drinking water, food, safety, health, climate mitigation, and jobs and livelihoods, among other benefits. Yet in the last 50 years, we have lost 68 percent of all wildlife populations, and this loss places half of global GDP at risk.
Investing in the protection and restoration of nature is a globally urgent priority, with multiple benefits. When businesses prioritize nature, it unlocks US$10.1 trillion in financial opportunity and will create 395 million jobs by 2030. Investing in nature- and climate-aligned COVID-19 stimulus packages can convey a return-on-investment of between 2:1 and 10:1.
UNDP, with 40 other partners, is co-convening a virtual “Nature for Life Hub” to explore how to put nature at the heart of sustainable development, including business and finance. During the Business and Finance Day on 25 September 2020, part of the UNDP-led Finance for Nature Virtual Global Series, private sector champions share insights on what it takes to implement successful nature-positive business and investment strategies. The sessions focus around four key transformations that must occur in business and finance if we are to halt and reverse biodiversity loss.
CEOs putting nature at the heart of business
CEOs from the world of food, finance and infrastructure have begun to show momentum for protecting nature. New initiatives, such as the Finance for Biodiversity Pledge and the “Nature is Everyone’s business” Call to Action demonstrate what companies can achieve with collective action, political will, and accountability. Through such initiatives, visionaries from Walmart, Natura, ASN Bank, HSBC Asset Management, BRK Ambiental, and the World Economic Forum are demonstrating that prioritizing nature will create a US$10.1 trillion market opportunity.
Transforming finance for nature through transparency and accountability
According to the World Economic Forum’s Global Risk Report the top five economic risks identified by CEOs are related to the environment and climate-change, all of which have material impacts on a company’s operational costs, reputation, and profitability. A key step for transforming finance for nature will be to increase transparency and accountability; explored by Professor Dasgupta via the economics of biodiversity, along with Government of France, AXA, Danone, Refinitiv, the National Banking and Securities Commission of Mexico (CNBV), Rainforest Action Network, Global Canopy, UNEP, WWF and UNDP. A new task force,the Informal Working Group for the Taskforce on Nature-related Financial Disclosure (IWG TNFD), will be launched to steer finance towards nature-positive outcomes.
Strengthening laws and legal frameworks
When biodiversity is lost or degraded, communities suffer. If we are to create a nature-based planetary safety net, then we must draw the links between nature and human rights more clearly. The COVID-19 crisis has demonstrated that the careless exploitation of biodiversity poses profound risks, affecting billions of people, especially the poor and vulnerable. In the “Nature Rules: A new accord with nature” component of the Nature for Life Hub, key organizations, including WBCSD, OECD, Climate Litigation Network, BirdLife International, the African Development Bank, top UN Human Rights leaders and Heads of State clearly delineate why nature and human rights are inseparable, and show how leaders from all sectors and governments can prioritize their protection.
Filling the ‘missing middle’ in finance for nature
Small- and medium-sized enterprises account for 60 percent of jobs and up to 40 percent of GDP in emerging markets, in which consumer markets are likely to be worth US$30 trillion by 2025. Green enterprises are poised to play a leading role in fostering green economic growth, innovation and development, and in catalyzing a green recovery from COVID-19. The bad news is that small businesses often find it difficult to raise the investment needed to expand their activities and scale up their impact – especially for nature-based enterprises seeking investment capital in the range of US$1 to US$10 million. This ‘missing-middle’ is too large for traditional microfinance, yet too small to attract most larger institutional investors. The good news is that BNP Paribas, Forest First Colombia, the &Green Fund, Kering, ANDE and UK DEFRA are making strides in exploring what it takes to finance the green missing middle.
The COVID-19 pandemic is the ultimate stress test of local, national, and global systems. It is also an unprecedented opportunity to regenerate green, inclusive, circular economies, and ensure that growth occurs within our planetary limits. It is clear that many corporations and finance institutions have already started down that path. We invite you to chart this journey, and join us, by insisting that #NatureIsEveryonesBusiness, demanding #FinanceForBiodiversity and by asking the manager of your bank, retirement fund, and favorite company: “What are you doing to #GreenYourWallet?”