A radical mindset change in how companies address their dependencies on nature is key to ensuring biodiversity credits emerge as an effective solution to tackle ecosystem and species loss, the founder of Germany-based tech startup Landbanking Group told Carbon Pulse.
Speaking on the sidelines of a panel on biodiversity credits at the Hack Summit in Lausanne, Switzerland, Sonja Stuchtey argued that marketing strategies are currently the sole driver for corporates mulling to purchase units on the voluntary market.
“Nobody wants to buy biodiversity credits right now. What should they buy credits for? If you go to a CFO, or even a sustainability manager, and offer them biodiversity credits, either they have a marketing idea or they don’t need it,” she told Carbon Pulse.
“They don’t know what claim they can make with those credits. The only way to establish a market is creating an understanding of businesses’ dependencies on nature.”
As momentum is building up on corporate nature-related disclosure frameworks, such as the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations and the Global Reporting Initiative (GRI) standard, companies are increasingly looking for a way to make claims on nature.
Yet, corporate demand in the voluntary markets is yet to pick up on a significant scale, in part due to a lack of education and awareness of the space compared to the carbon markets.
“There are two different groups that speak completely different languages. Those who want to create a market coming from the conservation side, and those who want to invest in nature, but don’t buy [biodiversity credits] even though we think that they should,” said Stuchtey.
“I think we need to get better in translating the readiness to pay into the need to invest.”
Stuchtey called on companies to not only integrate biodiversity into decision-making, but also ensure it is prioritised.
“We’re all dependent on nature. You want to maintain your business? You want to future-proof your business? You need nature. Without this understanding, it will all be superficial,” Stuchtey said during the panel.
“We need a mindset change, it’s not a punishment to invest in nature, it’s something that future-proofs your company.”
NATURE EQUITY ASSETS
Stuchtey also said the Landbanking Group is advancing consultations on its new nature asset class, dubbed Nature Equity and designed to foster investments in ecosystem preservation, restoration, and improvement.
A second consultation paper on the asset will be published in the next few months, following the one released in January.
According to the Landbanking Group, Nature Equity assets aim to reward land stewards for protecting and restoring ecosystems through outcome-based payments while enabling investors to gain proof of nature stewardship.
A contract will be signed between the land steward and the investor that links the payment to a biophysical nature preservation or uplift unit, and must adhere to specific monitoring, reporting, and verification (MRV) rules, said the first consultation paper.
Nature Equity assets would be exchanged on the Landler online platform, developed last year by the Landbanking Group with $11 million in financing, and contracts and transactions would be recognised on the balance sheets of both the land stewards and the investors.
By Sergio Colombo in Lausanne – sergio@carbon-pulse.com
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