The world needs better economic incentives and clear policy direction to ramp up biodiversity finance and deploy nature measurement technology at a scale not seen before, a major investment bank has said.
UBS on Monday issued a white paper on biodiversity – Bloom or Bust – to be presented at the annual World Economic Forum in Davos.
“Biodiversity loss requires swift action. Collaboration between government, industries, academia, and communities is critical to accelerate and scale the solutions needed to reduce biodiversity loss by 2030,” Sergio Ermotti, UBS group CEO, said in a press release accompanying the report.
In the white paper, UBS noted that currently available nature technology already offers most of the solutions needed to properly measure global biodiversity in order to determine the actions required to stem biodiversity loss, and that the challenge lies in deploying them faster and at a greater scale than seen before.
That would require accelerated use of technologies such as remote sensing, new sensors, environmental DNA, genetics mapping, nature modelling, and AI, the bank said.
But achieving that requires boosted finance and government leadership, it added.
“There is growing client interest in directing capital toward nature positive solutions both through investment and philanthropic solutions,” Suni Harford, president of UBS Asset Management, said in the release.
“Governments can help send clear signals to the markets to encourage investors to take account of biodiversity and ultimately expand investment into biodiversity measurements and assets at scale.
OPTIONS
Finding money is a major challenge in the world’s efforts to meet the 2030 targets of the Global Biodiversity Framework (GBF), with some analysts estimating the annual funding gap at around $700 billion.
UBS listed a range of options available to players in the financial system to address this – green or sustainability-linked bonds or loans, debt conversion mechanisms for nature, conservation bonds, biodiversity credits and offsets, payment for ecosystem services, risk disclosure frameworks, and more.
It also revealed that it has taken its own first steps into the emerging biodiversity credit market, piloting Verra’s new nature credit methodology together with Finance Earth through a community forest project in Tanzania.
However, even if corporates step up, that will not be sufficient to plug the funding gap.
“Private capital allocation, corporate actions, and consumer behaviours historically overlooked nature’s economic importance, thereby endangering biodiversity goals. The investment gap is widening, and private finance alone will not plug it,” the report said.
Complimentary action from the government will be needed, through providing suitable economic incentives, sending clear policy signals, crowding in private capital, and mainstreaming better data and methodologies, UBS said.
By Mulumba Agaba – mulumba@carbon-pulse.com
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