After COP15: Market leadership instrumental for global biodiversity agreement

At the biodiversity summit COP15, governments committed to agree on a global biodiversity framework next year, with implications for business and finance

Last week, global leaders gathered for the first phase of the Convention on Biological Diversity’s 15th Conference of the Parties (COP15). The five-day meeting, which took place in Kunming, China as well as virtually, saw the world’s governments commit to agree to a post-2020 Global Biodiversity Framework next year. Final negotiations of the agreement are scheduled for the second phase of COP15 in May next year. Once finalised, the framework will set out a 10-year roadmap for reversing nature loss. TNFD Co-Chair Elizabeth Mrema played a leading role at the COP15 proceedings in her role as Executive Secretary of the Convention on Biological Diversity.

New commitments for framework and funding

The new Kunming Declaration was the most notable outcome of the first phase of COP15. Under the Declaration, 99 ministers, nine heads of state, and the heads of delegations commit to negotiate, adopt and implement an effective post-2020 Global Biodiversity Framework next year. The Declaration also covered a wide range of other commitments, including strengthening national biodiversity strategies, reforming incentive structures, like subsidies, that are harmful to biodiversity, as well as mobilising additional financial resources from all sources, and aligning all financial flows in support of the conservation and sustainable use of biodiversity.

Alongside the Kunming Declaration, COP15 saw governments make several funding commitments for biodiversity. A new Kunming Biodiversity Fund received an initial injection of funding from the Government of China to the tune of US$233 million, intended to support developing countries in protecting biodiversity. China invited other governments to pledge additional contributions. Separately, the European Union, France, Japan and the United Kingdom all made commitments to increase funding for biodiversity. The CBD Global Environment Facility, an anchor funder of TNFD, announced in partnership with UNDP and UNEP a commitment to support developing countries to implement the expected post-2020 Global Biodiversity Framework as quickly as possible by fast-tracking financial and technical assistance.

36 Chinese financial institutions and 24 international banks and organisations also issued a joint declaration on support for biodiversity conservation by banking and financial institutions.

The new commitments made at COP15 come only a few weeks ahead of the COP26 climate summit, where nature-based solutions are expected to be a priority area of discussions for governments.

‘Business and financial sectors have a central role to play’

While governments were the central actors at last week’s conference, the post-2020 Global Biodiversity Framework will have implications for financial institutions, corporates and market service providers. When agreed next year, the framework has been slated to be for biodiversity what the 2015 Paris Agreement was for climate change, by providing the private sector with more policy certainty and clarity on collective goals.

A first draft of the post-2020 framework was released already earlier this year. It lists 21 targets and 10 proposed milestones for 2030, as stepping stones towards ‘living in harmony with nature’ by 2050. Several of the targets included in the draft biodiversity framework are specifically aimed at financial institutions and corporates, including a target for all businesses to assess and report on their dependencies and impacts on biodiversity.

“The business and financial sectors have a central role to play in shifting global financial flows from negative to positive outcomes for nature,” said Elizabeth Mrema in her opening remarks at COP15. “Identifying and disclosing their dependencies and impacts on nature, and the associated risks, is an essential step in this transition. The Taskforce on Nature-related Financial Disclosures (TNFD), which I have the honour to co-chair, will help them to achieve this.”

President of the French Republic, Emmanuel Macron, also zeroed in on the finance sector in his remarks to COP15: “All our investments, both public and private, must be aligned with the aims of the Post-2020 Framework, meaning their impact on nature must be either null or positive. In this respect, I welcome the ongoing efforts of central banks, development banks and of the Taskforce on Nature-related Financial Disclosures (TNFD) to assess the impact of financial flows on biodiversity.”

Market leadership lays foundation for global agreement

Over the coming months, governments will now work to follow through on the commitments made in the Kunming Declaration. As they prepare to agree a final post-2020 Global Biodiversity Framework in May next year, they are doing so against a backdrop of increasing market buy-in for acting on nature-related risks.

33 senior executives representing financial institutions, corporates and market service providers have now joined the TNFD Taskforce. Earlier this month, they met for the first time and began work on developing a risk management and disclosure framework for nature-related risks. Over 200 organisations, including private sector entities, have also joined the consultative TNFD Forum.

Aligning with existing initiatives, frameworks and standards is central to the TNFD’s approach.

As set out in the TNFD’s proposed technical scope, the TNFD framework will broadly seek to align with the two proposed global targets in the draft Global Biodiversity Framework of no net nature loss by 2030 and net gain by 2050.

Separately, 78 financial institutions with more than US$10 trillion of assets under management released a statement ahead of COP15 calling for ambitious policy action on biodiversity, including a post-2020 Global Biodiversity Framework that requires financial flows to align with global biodiversity goals. The signatories include several institutions of the TNFD Forum, such as AXA, Aviva, BNP Paribas, Credit Suisse, Mirova, Natixis, Robeco and Storebrand.

Having the private sector as the driving force behind the TNFD and other collective initiatives across business and finance sends a strong message to global governments of the economic and financial imperative of halting and reversing nature loss, according to Elizabeth Mrema, who has stated it increases the likelihood of an ambitious post-2020 Global Biodiversity Agreement.