A Canadian financial hub has announced it will set up a research centre tasked with developing financing mechanisms to scale investments towards nature protection, including biodiversity credits and biodiversity bonds.
Quebec-based Finance Montreal will run the facility, dubbed the Montreal Centre for Nature-based Solutions and Biodiversity Finance, with the UN Environment Programme Finance Initiative (UNEP FI) providing technical support.
“This centre represents a beacon of hope as biodiversity continues to decline at an alarming rate,” said Jacques Deforges, CEO of Finance Montreal.
“We are committed to demonstrating the effectiveness of nature-based solutions, thereby redefining the paradigms of sustainable finance in Montreal and beyond.”
Established in 2010, Finance Montreal currently counts 64 members, including banks Societe Generale and BMO, consultancy firms KPMG and EY, and asset managers Manulife and Amundi.
Finance Montreal said the centre’s work aims to strengthen cooperation between financial institutions and environmental organisations, influence policymakers, and develop new financial instruments to channel funds towards biodiversity conservation and restoration.
These include biodiversity bonds, biodiversity credits, and new impact investment models, Finance Montreal said in a statement.
ACCELERATING FINANCE SECTOR ACTION
“The global financial sector plays a decisive role in halting and reversing the loss of biodiversity, and contributing to nature-based solutions,” added Eric Usher, head of UNEP FI.
“The upcoming launch of the Montreal Centre for Nature-based Solutions and Biodiversity Finance is an exciting development in accelerating finance sector action on protecting the planet, and we look forward to its success.”
Last year, UNEP urged the financial sector to invest in nature-based solutions, and biodiversity credits in particular, to help mobilise the $200 billion per year needed to meet the global biodiversity targets by 2030.
The 2022 Kunming-Montreal Global Biodiversity framework carved out a clear role for nature-based solutions to help bridge the biodiversity financing gap, though demand for biodiversity credits is lagging due to a lack of market confidence.
To address this gap, several initiatives have emerged over the past few months, seeking to investigate the feasibility of using biodiversity credits to promote biodiversity-positive activities.
In October, Yale University launched a research project on biodiversity credits, planning to start developing methodologies tailored to Latin America around mid-year, with the first results expected by the end of 2024.
By Sergio Colombo – sergio@carbon-pulse.com
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