Financing for Biodiverse Futures?
The dust should have been long settled from this year’s Sixteenth Conference of the Parties to the Convention on Biological Diversity (COP16) in Cali, Colombia, but news of recently closed negotiations trickled into newsfeeds after its would-be closing date.
I was honored to represent Friends of the Earth US’ (FOE US) economic policy team’s work on the role of financial institutions in stopping and reversing biodiversity loss. For me, this in some ways marked the culmination of nearly a year’s worth of engagement with commercial and public banks on their varying efforts to develop and in lesser instances implement biodiversity ‘transition’ plans. In December 2023, on the first anniversary of the adoption of the Kunming-Montreal Global Biodiversity Framework (GBF) nearly 100 civil society organizations called upon banks globally to publish a transition plan to stop and reverse the biodiversity crisis.
After sending this open letter to hundreds of banks based in and doing business around the world, and engaging nearly two dozen of them, a few key themes emerged. First, while some financial institutions may have standalone policies on biodiversity, Indigenous Peoples, and human rights, bank policies rarely acknowledge or address the overlap in risk management or impacts. Second, there is also a lack of clarity in how banks stimulate and engage corporate clients to address their role in managing biodiversity impacts. And finally, there has been a lack of clear and practical guidance for the development and implementation of strong biodiversity plans among financial institutions. And where biodiversity strategies or transition plans do exist, there are diverging, inconsistent approaches to how financial institutions assess biodiversity impacts and set targets.
To fill this gap, I am pleased to have supported FOE US in publishing the report, Financing for Biodiverse Futures? Key Considerations for Financial Institutions to Stop and Reverse Biodiversity Loss as COP16 kicked off in mid-October 2024. The report explains how banks and financiers must align with the GBF and develop a biodiversity plan to stop and reverse biodiversity loss, while also protecting Indigenous Peoples and affected communities and upholding climate-related commitments. In addition to how banks and financiers can develop an effective biodiversity plan, the report outlines how stopping and reversing biodiversity loss should be the aim of a credible and comprehensive biodiversity plan, in line with the GBF, and should include the use of exclusionary areas, per the Banks & Biodiversity Initiative so that critical ecosystems and communities are protected from harmful financing.
The intersection of stakeholders’ efforts, including from the financial services sector in aligning efforts to address impacts on nature, climate, and people are becoming increasingly relevant and important and financiers appear to be taking note.
With all the conversation about how efforts under the GBF will be financed, an additional, important question remains: What will be done to stop financing that is harmful to nature?