It is a cross-cutting topic that touches every aspect of our lives. What is needed from the Montreal Summit to deliver on stabilizing the living world? A roundtable discussion among adelphi-experts.
The main goal of COP15 is to agree on a new global framework for biodiversity for the period after 2020, combined with the goal of returning to a life in harmony with nature by 2050. Some voices are even hoping for a "Paris moment" in Montreal. What do we need to achieve this?
Katrina Marsden, Senior Manager Biodiversity: There are still a lot of open questions around the overarching framework that states intend to set at the conference. The main focus of the negotiations will be on numbers such as the percentage of the world’s marine or terrestrial surface that shall be declared strictly protected areas. One aspect that has come more sharply into focus since states set the current framework in Nagoya in 2010 is the understanding that we’re not just talking about conserving what is left but also about restoring what we have destroyed. This is particularly important in the context of nature contributing to climate goals, for example through ecosystem services. Restoring ecosystems that capture greenhouse gases, such as wetlands, is a so-called nature-based solution to climate change. Their continued destruction, on the other hand, exacerbates climate change, which in turn expedites their destruction.
Talking about ecosystem restoration is also important in the context of fair contributions. In Europe, for example, we have already destroyed a lot of biodiversity. This is why on an EU level, the EU Biodiversity Strategy has a strong focus on restoration. As part of our support to the German Presidency of the Council of the EU, we analysed the discussions up to the proposal of the new restoration law, which is currently going through the EU institutions and is expected to be agreed late 2023 / early 2024. This has the potential to set a new paradigm for nature protection, bringing various environmental challenges together. If this understanding of the importance of restoration is also reflected in the post-2020 framework, we might get close to a ‘Paris moment’ in Montreal.
We saw at UN climate conferences that financing is often a lynchpin issue. Does this also apply to biodiversity conferences?
Christiane Röttger, Senior Manager Biodiversity: The fair distribution of resources will be a major topic for the negotiations. Biodiversity-rich countries in the global South need far greater financial support from the international community. The global biodiversity funding gap is estimated at USD 598-824 billion per year by 2030, which means that investments for instance in nature-based solutions need to increase three to fourfold. But without addressing the structural perverse incentives that drive ecosystem destruction, the funding gap will likely only get bigger. This is a critical point of discussion in Montreal.
Even in rich countries, funding for the protection and restoration of biodiversity is lacking. In Europe and Germany, most biodiversity-related funding comes through project financing. We recently evaluated Germany’s Federal Biological Diversity Programme and found that while such targeted project-based funding can have significant positive impact on the ground, it is bound to be limited in space and time and small compared to major structural threats originating e.g. from agricultural or fossil fuel subsidies. We therefore need to redirect harmful investments and systematically strengthen structural and institutional conservation capacities to achieve long-term effective action and a more strategic roll-out of large-scale nature restoration. This is what we hope to see in the German government’s new programme for nature-based climate solutions as well as the post-2020 framework more generally.
Clearly the agreed international framework is essential for directing further action but the engagement of stakeholders is essential for success. How can we better engage business?
Svenja Stropahl, Senior Manager: To engage businesses for biodiversity, four approaches are key: firstly, we need to better understand and communicate where the biodiversity “hot spots” of companies are along their value chains. This is important to steer their target setting and respective measures where their impact is the highest. We know from our research in the “Atlas on Environmental Impacts” that in many industries the “hot spots” are located in the supply chain. More focus on this is needed.
Secondly, we need a redefinition of accounting rules and balance sheets so that they internalize and display the impacts and true costs of business activities. So far, our economic system takes the resources and services provided by functioning ecosystems and biodiversity for granted. This has led to their depletion. It is past time that we address this as the core of the problem. Mandatory nature impact assessments and reporting are a first step. A price scheme akin to the greenhouse gas prices that are already in place in many jurisdictions would be another important step.
Thirdly, we need to define budgets, install caps and allocate quotas for extraction and consumption of natural resources. While regulation is lagging behind in this regard, the Science Based Targets Network (SBTN), part of the NGO-network ‘Global Commons Alliance’, has taken the initiative to show companies how to protect and restore nature in line with science by preparing to set science-based targets for nature. Current trends in mandatory reporting indicate that businesses will have to set and follow such frameworks in the future.
And fourthly, we need to translate the magnitude of biodiversity loss into business language addressing risks and opportunities for success. Nature and biodiversity generate enormous value. According to the World Economic Forum report “Nature Risk Rising” (2020), about 50% of global GDP is directly dependent and strongly linked to a functioning a healthy ecosystem. And business opportunities derive when companies start offering solutions to the crisis. Nature-based solutions will become of high demand for restoration, adaptation and protection. Furthermore, companies positioning themselves with alternatives to nature-depleting products and services can gain a competitive advantage, with the right regulatory setting and increasingly watchful consumers.
And what about business actually making money from biodiversity rather than losing money associated with its loss?
Julia Rohe-Frydrych, Senior Manager + Co-Lead Green Entrepreneurship:
We need a paradigm shift in the discussions around biodiversity and business as these are still quite biased in two main aspects: primarily, most people think big business matters most, thus there is a strong focus on international corporates that need to become greener. But corporates only play one part. While small and medium sized enterprises (SMEs) are the economic backbone of virtually every economy in the world and especially play a crucial role in emerging markets, they still receive very little attention when it comes to their impacts on natural ecosystems. Their operations can seriously damage biodiversity as they often lack regulation and the necessary means to sustainably manage their operations.
At the same time, SMEs have a lot of potential to contribute to biodiversity conservation as they are locally embedded. Their management is thus inclined to have a stronger sense of responsibility for the people and the natural ecosystems around them as they also feel the repercussions of the destruction of nature and habitats more immediately.
This leads me to the second aspect where a paradigm shift is needed as there is the prevailing argument that biodiversity-sound business activities are costly and therefore lower the profitability of a company. This might be true for a company with a conventional business model that undertakes efforts to green its operations but here is also a growing number of enterprises that pursue profitable business models that are biodiversity-positive from the outset.
Throughout more than 15 years of working with green SMEs in Africa, Asia and Latin America, the adelphi Green Entrepreneurship team has seen a great variety of innovative business models that integrate biodiversity conservation, management, or restoration as a core part of their business. These enterprises provide market-based solutions to pressing local biodiversity challenges, for instance, by addressing deforestation, over-exploitation of habitats or environmental pollution.
However, most of these businesses are still operating on a very small scale, lacking opportunities and access to resources to grow and scale their positive impact on biodiversity. Small enterprises remain significantly underserved by financial institutions, as our recent scoping reports “Filling the Missing Middle Financing Gap” examining the biodiversity finance ecosystems in Malawi and Zambia show. This financing gap applies all the more to green businesses, as financial institutions often perceive them as high risk ventures. Other conservation funds or biodiversity financing vehicles have very restrictive criteria and for the most part, aim for bigger ticket sizes that are not accessible for smaller nature-positive enterprises. As a result, only few biodiversity-positive SME can access investment capital. This prevailing missing middle financing gap needs to be addressed to allow biodiversity-positive enterprises to grow and scale their impacts.
So, in sum, small should be the new big when the international community talks about business and biodiversity in Montreal.
How can we as individuals do something? Aren’t we completely powerless in the face of these larger actors?
Jan Christian Polanía Giese, Senior Manager: Changing our consumer behaviour is crucial for the protection of biodiversity - both locally and globally. Raising awareness about this issue requires well-presented information materials and activities addressing a variety of specific target groups. To support multipliers in their communication activities for nature-compatible consumption, adelphi’s sustainable consumption team helped UNEP’s One Planet Network develop a new communication toolkit. This demonstrates the type of changes we can make in our day to day choices which can reduce our impact on biodiversity. For example, the choices we make on what we eat, what we wear and where we travel. For example, by choosing to reuse and repair cotton clothing instead of buying something new or by seeking out ecolabels, we can help reduce pressures caused by intensive cotton production and the processes to develop it into clothing. In Montreal, I’ll be presenting this toolkit and discuss ways to raise awareness about the devastating impacts of conventional consumption patterns on nature.