Biodiversity is the diversity of life on our planet, encompassing every living thing from the smallest amoeba to the blue whale. Biodiversity provides nourishment, medicines, climate regulation, and natural services that promote our wellbeing. The power of biodiversity is especially apparent in agriculture. Cocoa, soybeans, and avocados all rely on wild pollinators for sustenance and the diversity in staple crops, like rice, carrots, and wheat. Several crops that are dependent on pollinators are also important contributors to farmers’ incomes.
It is thus a matter of grave global concern that biodiversity faces serious threats. Every year, thousands of species go extinct. This loss of biodiversity is caused by a variety of factors, including excessive use of natural resources, invasive species, pollution, and climate change. Habitat loss is caused by human activities such as deforestation, agriculture and urbanisation. Recognising these threats, representatives from 190 countries adopted the Kunming-Montreal Global Biodiversity Framework in December 2022 in Montreal.
The framework has 23 action-oriented global targets for urgent action up to 2030. The targets include halving food waste, and ensuring that at least 30% of terrestrial, inland water, and coastal and marine areas are under effective conservation and management. Another target is increasing total biodiversity-related international financial resources from developed countries to developing and transition countries to at least $20 billion per year by 2025, and to at least $30 billion per year by 2030. As substantial as these sums may be, they are far less than the funding required to reverse the decline in biodiversity by 2030, estimated by the Paulson Institute to total $711 billion annually.
Hurdles to mobilise financing for biodiversity
Generating financing at such levels will be difficult, particularly with multiple overlapping crises afflicting the planet. One specific challenge is the difficulty of measuring and valuing biodiversity. Investors, governments and grant-makers want to be able to measure the impact generated by their investments yet there is no standardised system for measuring the impact of corporate practices on biodiversity, and for firms to compare their performance against peers.
Additionally, many people are not aware of the importance of biodiversity or the threats it faces. This lack of awareness makes it difficult to mobilise financial support for conservation efforts. There are also political barriers; some people, particularly those on the right of the political spectrum, view measures to protect biodiversity, which potentially include limits on tree-cutting, mining, and oil extraction, as deleterious to economic growth and job creation.
While this is a widely held belief, it is not always proven true as there are a growing number of sustainable development strategies that allow for substantial economic growth and the preservation of biodiversity to occur in tandem and sometimes symbiotically. One group, Conservation Strategy Fund, develops these strategies alongside governments and corporations who aim to generate economic development without endangering the natural resources on which local populations depend.
What can be done?
So, what can be done to mobilise the necessary financing from investors and governments to achieve these ambitious global biodiversity targets?
One way is to better present the arguments in favour of biodiversity protection. People can grasp the tangible and immediate importance of forested and verdant land, clean water, and open natural spaces. Initiatives that combine job creation and economic development with proper care of natural assets are likely to resonate with communities being encouraged to change behaviour. The choice of words matters. “Conservation” does not have the same polarising ring as “climate” in some constituencies.
Biodiversity’s complexity makes it difficult to pinpoint a single primary measurement – like carbon emissions for climate. That said, biodiversity does offer several points of reference – like abundance and diversity of flora and fauna, as well as hectares of rainforest and mangroves, and healthy coral reefs. Projects that promote economic development as well as biodiversity protection can be evaluated with data on jobs and economic impact created through sustainable agriculture, responsible tourism, and forest management.
Some recent resource mobilisation partnerships provide inspiration for biodiversity funding. In Ecuador, a debt-for-nature swap will turn $1.6 billion in commercial debt into a new $656 million loan. Credit Suisse purchased the distressed debt and financed a new long-term loan with a lower rate by issuing a marine conservation-linked Galápagos Marine Bond. The US International Development Finance Corporation provided $656 million in political risk insurance for the loan, and the Inter-American Development Bank supplied an $85 million guarantee to help make the deal possible. A group of 11 private insurers are also providing more than 50% reinsurance for the project.
In exchange for generating huge savings for Ecuador on future debt repayments, the country’s government has committed to spending around $17 million a year on conservation over the next 18 years, with about $5.4 million annually going to support a permanent endowment to continue financing projects after that. The newly created Galapagos Future Fund will manage the funds. The government, environmental groups, and representatives of the tourism and fishing industries have worked together to elaborate more than 20 commitments that the government has made to improve fisheries management and support the marine protected area, local economy, and tourism.
In another part of the world, the Asian Development Bank (ADB) has joined with the East Asian-Australasian Flyway Partnership, BirdLife International, and several other partners, to raise $3 billion over a 10-year period to protect priority wetland clusters along the East Asian–Australasian Flyway. The Flyway is home to diverse wildlife and provides a critical bird migration route extending across more than 20 countries from the Arctic Circle to New Zealand. More than 50 million migratory waterbirds of more than 210 species—along with many other animal and plant species—also depend on the Flyway’s wetlands for food, shelter, and other essential needs. These wetlands are critical for the livelihoods of hundreds of millions of people.
Significantly, international fund managers are adopting biodiversity strategies to invest in companies that minimise harm to natural habitats. For example, the Bank of America Corporation has estimated that global assets in biodiversity-related investments may rise 20-fold to more than $400 billion by 2030. Earlier this year, Northern Trust Corporation launched the world’s largest biodiversity-focused fund, with more than $1.2 billion in assets.
Companies looking to improve their sustainability credentials can not only reduce their carbon footprints to support climate change mitigation but also take actions to support biodiversity. Governments can strengthen laws and regulations to protect biodiversity, and international aid agencies can contribute to building capacity and institutions critical to biodiversity protection in low- to medium-income countries. In addition, public, private, and not-for-profit organisations supporting biodiversity protection can explore ways to nurture innovation, knowledge-sharing, and improved coordination.
If concerned parties adopt the measures that we’ve described here to protect biodiversity, the world stands a much greater chance of creating a healthy and sustainable future for ourselves and generations to come.
Scott joined CSF after seven years at Environmental Defense Fund (EDF) as the Latin America and Caribbean Director in the Oceans Program. During the last two years of his tenure at EDF, Scott managed a global community-based fisheries management initiative to address overfishing in hundreds of communities in places like Indonesia, Brazil and the Philippines. Prior to EDF, Scott was the Senior Director at the National Parks Conservation Association (NPCA). At NPCA, Scott created an international programme to provide protected area managers with private sector business tools to improve their capacity for revenue generation and cost effectiveness. In addition, Scott managed multi-year projects writing business plans for the US National Park Service and the US Forest Service. He served as a technical advisor to the United Nations Development Program on the $25 million project to enhance financial sustainability for protected area systems in six countries, and has led numerous workshops in developing countries on business planning and conservation finance.
Bart W. Édes
Bart W. Édes is a policy analyst, commentator, and author of Learning From Tomorrow: Using Strategic Foresight to Prepare for the Next Big Disruption. He is a Professor of Practice at McGill University, and Distinguished Fellow at the Asia Pacific Foundation of Canada. Édes focuses on developing Asian economies, international trade and sustainable development, and transformative trends reshaping the world.