Nature tech has the potential to reduce costs of biodiversity conservation and support the development of financing mechanisms such as voluntary biodiversity credits, though greater collaboration between private and public sectors is needed to scale the market, a report has said.

Demand for tech-driven tools has steadily expanded over the last four years, fuelled by increased awareness of biodiversity risks and the adoption of nature disclosure frameworks, but funding remains disproportionately concentrated in high-income countries, according to the mobile industry organisation GSMA.

“Developing and scaling effective, high-impact technological solutions is crucial for stemming, and ultimately reversing, biodiversity loss,” said the report.

“While numerous technological and digital solutions are being deployed worldwide, most of the start-ups developing them are still in early stages and rely heavily on grant funding.”

These include tools for measuring, reporting, and verifying (MRV) climate and biodiversity data, such as satellite imagery, sensors, and camera traps, as well as sharing knowledge and best practices through connecting individuals and communities.

At the same time, AI, machine learning, and environmental DNA (eDNA) have rapidly emerged to map biodiversity, identify priority conservation and restoration areas, and develop sustainable land management approaches.

NO BALANCE

Nature tech can play a critical role in reducing biodiversity monitoring costs, the report said. Yet, although most biodiversity hotspots are in low and middle-income countries (LMICs), the bulk of nature tech funding is being allocated to high-income countries (HICs).

A separate research paper by Nature4Climate in 2023 found that, between 2018 and 2022, projects in the US and Europe received a total of $6.48 billion, while as few as $0.4 bln was ringfenced to projects in Asia, $0.01 bln in Africa, and $0.06 bln in Latin America.

“More investment is needed in LMICs,” GSMA said.

“More of these solutions also need to originate from LMICs to ensure they are tailored to the environmental and social needs of Indigenous peoples and local communities.”

The report estimated that the private sector currently accounts for around 40% of all financing towards nature tech, compared to the 60% coming from the public sector.

“Blended finance models offer a potential solution, leveraging public finance to pilot and test new ventures, develop bankable project pipelines, and mitigate investment risks for the private sector,” said the report.

“Greater collaboration between the public and private sectors could unlock new investment opportunities for nature tech solutions and maximise their potential to scale.”

THE CASE FOR BIODIVERSITY CREDITS

GSMA cited emerging reporting frameworks, such as the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations and the EU’s Corporate Sustainability Reporting Directive (CSRD), as fuelling demand for nature tech solutions.

Further advancing these tools could support the development of financing mechanisms aimed at channelling resources towards biodiversity conservation, including the biodiversity credit market, it said.

“Global demand for voluntary biodiversity credits is predicted to increase significantly, creating a clear case as a promising revenue stream.”

“The rate of adoption will, in part, depend on the establishment of robust governance models and quality assurance measures and metrics – areas where nature tech can contribute.”

In recent months, technology-based monitoring tools have emerged as go-to solutions for many companies aiming to make their first foray into the voluntary biodiversity credit market.

For example, the Italian-headquartered tech startup 3Bee has recently announced it plans to apply a monitoring approach based on bioacoustics and remote sensing to biodiversity credits.

French-based environmental company Nat5, which has started piloting a biodiversity credit methodology this month, also said it will leverage bioacoustics and satellite imagery to measure ecosystem and species uplift.

By Sergio Colombo – sergio@carbon-pulse.com

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