If the world is to meet the goals of the Global Biodiversity Framework (GBF), governments must act swiftly to put in place regulations that incentivise nature positive investments and penalise nature negative activity, a global asset manager has said.
Investors are willing to step up and help fill the global biodiversity funding gap, but need regulatory incentives to do so at scale, Manulife Investment Management – an asset manager with some $220 billion under management – said in its semi-annual Global Intelligence report, released this week.
“As we see things now, roughly six months after the GBF was signed, the central challenge confronting robust private sector involvement is regulation; where regulation doesn’t financially incentivise nature-positive actions, the pools of capital willing to invest will remain limited,” Manulife IM stated.
The asset manager said the fourth goal of the GBF – ensuring the accessibility to the means of implementing the framework – and the target to mobilise $200 billion in annual finance by 2030 from public and private sources will be crucial to meet the ambitions agreed to.
Some of the elements that need to be put in place are underway, it said.
For example, it is looking to the Taskforce on Nature-related Financial Disclosures (TNFD) to provide a framework to help businesses commit, collaborate, assess, and disclose their relation with nature.
There are also processes ongoing addressing needs like systems to measure natural capital and sustainable accounting standards.
But for those systems to be widely accessible and scalable, regulatory assistance is needed, the report stressed.
“[We need] governments to act on the positive signals they’ve sent through their support of the global biodiversity framework, meaning they need to deliver regulatory and legislative changes that recognise and support the unique value of nature,” Manulife IM said.
“This extends to the need for governments to either prohibit or penalise nature-negative activity while encouraging nature-positive action.”
As an example it mentioned the EU’s anti-deforestation policy, which bans deforestation in the supply chain for commodities like palm oil, cattle, soy, coffee, cocoa, and timber.
It also highlighted other government efforts, such as China’s 2021 biodiversity bonds and the emergence of debt-for-nature swaps, such as the ones involving Ecuador and Barbados.
“Only when the widest pools of capital are available can the full power of the market be aligned to addressing the crucial challenge of building a nature-positive future,” the asset manager said.
Many developing nations have begun the process of implementing the GBF and related targets into national policies and legislation.
However, it is expected to take time and a significant amount of international assistance to carry out the work required along with additional incentivising regulations like guidelines for policies such as ecosystem payment arrangements or voluntary biodiversity credits.
By Stian Reklev – stian@carbon-pulse.com
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