Global public and private funding that has a detrimental impact on nature stands at a massive $7 trillion per year, while funding with a positive impact last year reached $200 billion, UNEP said in its annual State of Finance for Nature report, released Saturday.
Annual spending on nature-based solutions reached $200 bln in 2022, in an increase from around $154 bln from the year before, but still falls far short of the $542 bln needed by 2030 and $737 bln by 2050 to meet the world’s Global Biodiversity Framework (GBF) targets.
Private-sector impact was particularly grim, the report found, with investments directly harming nature last year reaching $5 trillion – 140 times more than the $35 bln spent on nature-based solutions.
“To have any chance of meeting the sustainable development goals, these numbers must be flipped – with true custodians of the land, such as Indigenous Peoples, among the chief beneficiaries,” said Inger Andersen, UNEP executive director.
The five industries most responsible for nature negative investments were construction, electric utilities, real estate, oil and gas, and food and tobacco, UNEP found.
According to the agency, those five account for 16% of overall investments globally, but 43% of funds associated with the destruction of forests, wetlands, and other natural habitats.
Still, governments worldwide contributed some $1.7 trillion in harmful subsidies last year, particularly in relation to fossil fuels and agriculture.
“This year’s report is a stark reminder that continuing with “business as usual” poses a severe threat to our planet, reinforcing the urgent need for a transition to sustainable business practices and to stop the financing of nature destruction,” Niki Mardas, executive director of non-profit Global Canopy, said.
“The net is tightening, with increased regulatory pressure in key areas like tackling deforestation, it means that those companies and financial institutions still driving the problem now need to make best use of the excellent data, guidance, and frameworks already available to urgently commit to a nature-positive future.”
While governments and private companies both need to dramatically ramp up nature positive spending, according to UNEP, the agency found that private investors in particular have room to beef up spending.
“While public funding will continue to play a critical role, private finance can potentially increase its share of nature-based finance from 18% currently to 33% by 2050,” it said.
Nature-based solutions should play a pivotal role in the years ahead, according to UNEP.
The long-term profitability of sustainable food and commodity production means investments in those can increase four-fold by mid-century, the report said.
“Protection of diverse ecosystems is highly cost-effective, representing 80% of the additional land needed for nature-based solutions while absorbing just 20% of additional nature-based solutions financing by 2030.”
DO MORE
The report was launched on the sidelines of ‘Nature Day’ at COP28 in Dubai, amid some positive developments such as China announcing it will join the High Ambition Coalition for Nature and People.
Even so, UNEP stressed that in order to solve the nature crisis, work must be put in to not only increase nature positive funding, but also reduce destructive finance.
“A major turnaround for nature is needed. The financial sector and businesses must not only increase investments in nature-based solutions but also implement incentives to redirect finance from harmful activities, fostering positive outcomes for nature,” it said.
“Government policies play a crucial role in creating an enabling environment for nurturing investment opportunities. Notably, investment prospects in nature-based solutions are flourishing, driven by the overhaul of global sectors such as food, extractives, real estate, and infrastructure—major contributors to nature’s decline.”
UNDERVALUED
While the numbers presented in the UNEP report were bleak, they were not surprising, with observers pointing out that the real value of nature and biodiversity continues to be ignored.
“It’s ironic that on the COP28 nature day – a day focused on amplifying the linkages between climate change and nature – we are shown clearly just how undervalued biodiversity really is,” said Annamaria Lehoczky, a senior technical specialist with green group Fauna & Flora.
“Nature is a critical ally in the fight against climate change, able to provide one-third of the emissions reductions needed by 2030 and able to support the lives and resilience of those communities living closest to nature. But, if we continue to destroy nature then we weaken its power to help us to mitigate climate change or adapt to its impact.”
By Stian Reklev in Dubai – stian@carbon-pulse.com
** Click here to sign up to our twice-weekly biodiversity newsletter **
