Reversing biodiversity loss high on the agenda of COP26
Nature was high on the to-do list of the 26th climate change summit Conference of the Parties (COP26) hosted in Glasgow from 31 October to 12 November 2021. Many commitments and statements on reversing biodiversity loss have been made, following the first half of the UN’s COP15 biodiversity summit last month.
Several members of the Finance for Biodiversity Foundation were joining COP26, among others, Sonya Likhtman from the international business of Federated Hermes and co-chair of the Public Policy Advocacy working group of the Finance for Biodiversity Foundation. Likhtman says:
” It has been great to see nature feature more prominently at COP26, including specific commitments from the public and private sectors on deforestation and sustainable agriculture. There is greater recognition that we need nature in order to successfully transition to net-zero economies. Forests, mangroves, peatlands and other biodiverse ecosystems must be protected and restored to strengthen climate change mitigation and adaptation efforts.”
World leaders promise to end deforestation by 2030
One of the first and most prominent commitments came from world leaders representing more than 100 nations, which contain 85% of the world’s forests, committed to end deforestation and reverse land degradation by 2030. This commitment is being described as a ‘landmark moment’ for nature and, on the day of its launch, has already garnered financial support pledges of €10.2 billion in public money that will be allocated until 2025 to fulfil this promise. In addition, €6.2 billion in private funds will be invested.
“This pledge is a first positive signal. In particular, it is reassuring to see that countries such as Brazil and Indonesia, which account for almost half of tropical deforestation, have taken part in this initiative. We need to go even further if we want not only to avoid the negative impacts of deforestation but also to make forests an ally in facing major environmental issues”, says Ladislas Smia, Head of Sustainability Research of Mirova.
Financial institutions commit to tackle agricultural community-driven deforestation by 2025 through engagement
In addition, over 30 financial institutions committed to work on eliminating agricultural community-driven deforestation (e.g., palm oil, soy, beef and leather, pulp and paper) by 2025.
The commitment includes activities such as:
- Engaging with corporates focused on deforestation
- Publicly disclosing risks and progress on efforts to tackle deforestation
- Increasing investment in nature-based solutions
Among the financial institutions, the following Finance for Biodiversity Pledge signatories and Foundation members supported this statement: Actiam, Aviva, AXA Group, Domini Impact Investments LLC, Fidelity International, the international business of Federated Hermes, Robeco, SCOR SE and Storebrand Asset Management.
Emine Isciel, member of the Public Policy Advocacy working group and Head of Climate and Environment at Storebrand Asset Management, said: “The need to act on deforestation is urgent. Halting deforestation can make a dramatic contribution to mitigating and adapting to climate change while helping to achieve biodiversity targets. Deforestation is not only a risk to climate and biodiversity, it can also pose financial risks to our portfolios. A huge number of economic sectors are exposed to increasing physical and regulatory risks associated with deforestation.”
This investor-led initiative, which is supported by several NGOs, is still open for new signatories.
Other finance and biodiversity-related initiatives launched include:
- 12 new members investing in natural capital – among them Finance for Biodiversity Foundation members the international business of Federated Hermes; Fidelity International and Fondaction – are joining the Natural Capital Investment Alliance that has been formed by (FfB members) Lombard Odier, Mirova, and HSBC Pollination Climate Asset Management in recognition of the need to mobilise investment in nature-based economic opportunities. They have committed to invest in total US$ 10 bn by the end of 2022.
- The Coalition of Finance Ministers for Climate Action and the Network of Central Banks for Greening the Financial Sector jointly committed to addressing global climate and nature goals in an integrated manner.