INSIGHT by Nicolas Poolen
A selection of tools and approaches for scaling and accelerating investor action for nature and delivering on the Kunming-Montreal Global Biodiversity Framework
The critical role that the financial sector must play in protecting and restoring nature is clearly recognized in the Kunming-Montreal Global Biodiversity Framework (GBF) agreed by 196 countries last December.
The GBF offers the world a new lodestar for global action on nature, providing clarity on what’s at stake and what’s needed to achieve a nature-positive world. In particular, it includes targets on aligning public and private financial flows with the objectives of the agreement (Target 14), and disclosing nature-related risks, impacts, and dependencies (Target 15).
WWF recently contributed to an assessment and webinar by the UNEP Finance Initiative (UNEP FI), UN Principles for Responsible Investment (PRI), and the Finance for Biodiversity Foundation, exploring the implications of the GBF for investors, and how the financial sector can act immediately to deliver on its goals and targets. The publication highlights eight next steps for investors, and how they relate to individual targets.
In implementing these, we recommend investors identify relevant tools and approaches that help scale and accelerate action for nature, and develop an implementation toolkit. While the landscape of relevant resources is evolving rapidly, below I profile a selection of the best available today, and explore how they relate to specific GBF targets.
| Identifying the best tools for the job
The GBF is ambitious in its conservation aims. These range from preventing loss of areas of high importance for biodiversity (Target 1), to eliminating the impacts of invasive species (Target 6). This requires gathering, interpreting, and acting on new types of information and data (Target 21) that although becoming more common, are typically not yet readily available to the financial sector.
This means that financial institutions need to build cross-organisational capacity, including at board-level, to address their risks, impacts, and dependencies on nature. This can be done both by bringing in new expertise and by educating existing staff, for instance by using the Taskforce on Nature-related Financial Disclosures (TNFD) knowledge bank, or the DNB’s E-learning on Biodiversity for Financials.
Investors now also have the opportunity to pilot TNFD’s LEAP process, and can use tools and data such as WWF’s Risk Filter Suite, ENCORE, IBAT, Ceres’ Investor Water Toolkit, CDP, and the World Benchmarking Alliance’s Nature Benchmark.
Building capacity, understanding, and familiarity with the best available tools and approaches will offer financial institutions a critical foundation from which they can regularly screen and assess investor portfolios, feeding nature-related information into decision-making, risk management, and disclosure (Target 15).
| Acting for nature
Financial institutions should also commit to protecting nature, contribute to reducing real-economy footprints (Target 16) and operating within planetary boundaries. This can be done through joining initiatives such as the Finance for Biodiversity Pledge, developing transition plans that integrate nature (for example by following WWF’s Nature in Transition Plans guidance), and implementing topic-specific commitments such as eliminating deforestation and conversion of natural habitats (Targets 1 and 3).
Investors should also develop thematic and sector-specific policies for high-risk sectors such as agriculture, aquaculture, fisheries, and forestry (as mentioned in Target 10). Many sources of investor guidance offer help. These include WWF’s Bringing It Down to Earth report on addressing nature-related risks in agriculture, and its Seeing the Forest for the Trees report; Accountability Framework guidance on addressing deforestation and conversion; and UNEP FI’s Sustainable Blue Finance Principles, as well as its supplemental guidance on deep-seabed mining, exclusions, seafood, and other marine topics.
| Engaging collectively for change
Driving real-world change aligned with the GBF, should be supported by robust, and where possible collective, engagement with investees in high-risk sectors. Beyond addressing individual nature-related considerations, engagement should also support the implementation of important methodologies and standards by investees by organisations such as the TNFD and the Science Based Targets Network, and sector initiatives such as the Coalition to end Wildlife Tracking (Target 5) that contribute to individual GBF targets. Investors should also consider joining collective engagement initiatives, including Nature Action 100 and a recently launched seafood engagement effort, and collective sovereign engagements initiatives such as the Investors Policy Dialogue on Deforestation.
Governments are expected to develop National Biodiversity Strategies Action Plans (NBSAPs) to guide implementation of the GBF. Such plans should provide guidance for the private sector on where to direct their investments, and could result in new incentives and other financial flows for scaling up conservation, sustainable use of biodiversity (Targets 18 and 19) and restoration (Target 2), for example, through nature-based solutions and ecosystem-based approaches (Target 11). To fully realise the benefits, investors should look for opportunities to invest in Bankable Nature Solutions and other financial instruments and mechanisms that help protect and restore biodiversity.
Lastly, the success of the GBF relies on action and cooperation by all actors in society. Nature loss cannot be addressed by individual financial institutions acting alone or working in silos. This means proactively engaging others, including through NBSAP implementation, or other multi-stakeholder and multi-sector approaches. Examples include supporting regional initiatives such as the Cerrado Manifesto, supporting nature-positive advocacy such as the call for a moratorium on deep sea mining, and sharing knowledge through platforms such as the finance workstream of the EU B@B platform, the Asia Sustainable Finance initiative, and the TNFD Forum.
| A stitch in time saves nine
Transition to a nature-positive economy will result in opportunities estimated by the World Economic Forum to amount to $10.1 trillion in annual business value by 2030. With the range of resources and support growing all the time, and the risks and costs of inaction far greater than the $1 trillion price tag for protecting biodiversity, investors have no reason to delay action for a nature-positive world.
That’s why we encourage the financial sector to work with WWF and organisations such as UNEP FI, UN PRI, and the Finance for Biodiversity Foundation, to pilot, refine, adopt, and scale tools and approaches that support the full integration of nature and its value into financial decision-making, and that recognise that our economies are embedded in and dependent on nature.
| brief bio
Nicolas is a Green Finance Specialist at WWF. He has a background working on diverse topics ranging from Bankable Nature Solutions to engaging the financial sector on the integration of nature into financial decision making and regulation. Through this experience he has collaborated with and led projects with Dutch Ministry of Foreign Affairs, The Dutch Entrepreneurial Development Bank (FMO), the Taskforce on Nature related Financial Disclosures (TNFD), The Global Impact Investing Network, Rabobank and others. Since 2023, Nicolas has been managing the Finance Engagement, for WWFs Global Nature Positive Initiative. Prior to joining WWF, Nicolas was a Research and Engagement Advisor for Follow This, a movement of activist shareholders in the oil and gas industry. Nicolas has a background in business and sustainability.
| All opinions expressed are those of the author and/or quoted sources. investESG.eu is an independent and neutral platform dedicated to generating debate around ESG investing topics.