An environmental impact platform and a payments network have closed their call for proposals set to identify innovative finance projects, saying they seek to fund initiatives in the emerging biodiversity credit market.
Sweden-headquartered Milkywire and Klarna launched the Nature Transformation Fund back in 2021, an initiative that has so far been supported by donors such as Spotify, ING Bank, Pangaia, Northzone, and Mentimeter.
This year’s call for proposals was launched in April with the aim of supporting initiatives either focused on durable carbon removal strategies or aligned with the goals and targets of the Kunming-Montreal Global Biodiversity Framework (GBF).
During a webinar on Wednesday on how businesses can lead the way on biodiversity actions, Jill Raval, manager of the Nature Transformation Fund for Milkywire, said that the two companies hope to unlock the potential of the private sector in channelling funds towards nature positive outcomes.
Replying to a question from Carbon Pulse, Raval said: “One of the pillars for the selection criteria for this call for proposal was innovative finance, and we are hoping that there might be some biodiversity credit methodology projects among the proposals.”
“We are still in an early stage when it comes to the biodiversity credit market, and we want to make sure that it will be shaped in a scientific way, taking the learnings from the carbon market.”
Biodiversity credits are increasingly drawing market attention, with a growing number of companies and organisations working on piloting projects, developing methodologies, and even listing credits.
In a recent move, the High Integrity Forest (HIFOR) investment initiative backed by the Wildlife Conservation Society (WCS) released last week its methodology to identify and issue units that could fit a biodiversity credit scheme.
In March, Colombia-based environmental crediting standard Cercarbono published the final version of its biodiversity protocol, the first finalised biodiversity crediting framework to be released by one of the major standards.
Verra, Plan Vivo, and Gold Standard are also at various stages in the process of making their own.
BEYOND THE “CARBON TUNNEL VISION”
Klarna and Milkywire first partnered in 2021 for the Give One initiative, through which Klarna committed to allocating 1% of its latest $1 billion funding round to initiatives supporting conservation, mitigation, and restoration efforts for climate and biodiversity.
Salah Said, head of sustainability at Klarna, emphasised during the webinar that companies need to go beyond the so-called “carbon tunnel vision”, meaning that they have to start considering environmental threats and risks other than carbon emissions, including biodiversity loss.
“I think we are at a point where it becomes crucial that we create the same action toward nature, including creating standards and financial mechanisms to allow businesses to act on nature,” he said.
In the last few months, an increasing number of companies have committed to nature-related disclosure, aligning with reporting frameworks such as the Taskforce on Nature-related Finance Disclosures (TNFD) recommendations and the Global Reporting Initiative (GRI).
“Companies are realising that including nature and biodiversity into the ESG strategy is crucial if they want to be successful in the long run,” Said added.
By Giada Ferraglioni – giada@carbon-pulse.com
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