The Global Biodiversity Framework (GBF) can have a catalysing effect on the sector to protect and restore nature, providing a framework under which business and finance can begin to redirect capital away from negative activities towards nature-positive investment, experts from financial institutions told a webinar Thursday.

Speakers from HSBC and Swedbank underlined the importance in particular of points 14 and 15 of the 23-target agreement that was reached at the UN’s bi-annual biodiversity summit in Montreal in December.

These two targets address the implementation of the goals, and especially the involvement of the private and financial sectors, in the GBF, which has been described the Paris Agreement for biodiversity and nature.

“This is what is really driving the actions that we are taking at this stage,” Clinton Adas, HSBC’s biodiversity lead, told the webinar organised by the UNEP and CDC Biodiversite on the implications of the GBF on financial institutions.

“The journey is not an overnight fix, but we need to start now,” he added.

The key thing now for the private sector, and in particular financials, is to get an understanding of their exposure to the impacts of the degradation of nature that has taken place over the past 50 years.

“Having that information really puts us in a strong position as to what are the next steps,” he continued, speaking in reference to the agreed framework, and outlining the two next steps the bank was looking to take.

Firstly, engaging with firms and their supply chains, where there are high negative impacts on nature, would be a strong start, he said, with financials responsible for sharing best practices on how to change these activities.

Shifting asset allocation and moving finance away from some companies and sectors to others that are more beneficial to nature would represent the second step that could be taken immediately following the GBF’s agreement.

While considered historic, observers say the deal is more of a framework rather than a prescriptive outline of what must be done, and clarity will emerge over the coming years as regulation is implemented and behaviours hopefully start to change.

Financial experts are for the most part cautiously optimistic, but admit there is much to be done.

“We need to make companies aware of [biodiversity] as a topic. This may sounds like a basic step but some are not [aware],” Adas added.

One of the key game-changing aspects of the framework is the explicit reference to the need for private capital for nature restoration, with experts from The Biodiversity Consultancy (TBC) describing the “exciting presence” of the financial sector in Montreal at the COP15 talks.

The framework has the idea of transformative change, not just “tinkering around the edges” about how the world can adjust investment strategies and business models, commented Malcolm Starkey, TBC’s chief innovation officer, during the webinar.

“Whether you are a bank or an asset manager, or a mining company, or a small business, it is the understanding that [the GBF] is not just something scientists or NGOs are looking at … It’s a real societal mission,” he added, welcoming the fact it offered a framework for action.

“If you think of the framework as a recipe, telling you exactly what you should do, you’re going to be disappointed.  But if you think of it as a roadmap, it is more useful,” he continued, specifically referencing the financial community.

Camille Maclet, also of TBC, described the fact that more than 100 financial institutions attended COP15, where the agreement provided a “clear call to action” for the sector to start to enact change.

That said, while the GBF does not go into granular detail, it needs to be built on, Shu-Wen Chan, head of sustainability transformation at Swedbank, told the webinar.

“This is a broader scale challenge very much tied to Target 15,” she said, referring the GBF goal that calls on the private sector to regularly monitor, assess, and transparently disclose their risks, dependencies, and impacts on biodiversity.

She added that metrics and monitoring from corporates “will become more concrete and material to the financial system”.

Carbon Pulse provided an overview of all 23 targets and the wider agreement during its reporting of COP15.

By Roy Manuell – roy@carbon-pulse.com

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