COP 15: UN Biodiversity Conference – Montreal, December 2022

By Harry Knox, Mylene Turban, and Maddy Rymill


Secretary-General of the United Nations Antonio Guterres at the opening of the COP15 UN Biodiversity Conference, Montreal
COP15: United Nations Secretary-General Antonio Guterres

Following the historic deal at the United Nations Biodiversity COP 15 in Montreal last month, Pangolin Associates breaks down the agreements and what this means for business.

Introduction

Biodiversity is declining faster than at any time in human history threatening the ecosystem services on which our lives and livelihoods depend. The Global Biodiversity Framework (GBP) aims to reverse this decline through the introduction of a strategic vision and a global roadmap for the conservation, protection, and sustainable management of biodiversity and ecosystems through 2030.

Biodiversity and the human-derived ecosystem services from natural systems is the foundation of the global economy: more than half of global GDP – equal to $41.5tn – is dependent on the healthy functioning of the natural world. No sector is immune to the risk of disruption due to nature loss.

With much of the current international environmental movement focused on climate change and the impacts that greenhouse gases are having on Earth, biodiversity loss and the lack of international effort to protect and enhance existing biodiversity has played second fiddle in the international arena. And to date many have failed to recognise that biodiversity loss and climate change are inextricably linked. However, the UN Biodiversity COP 15 is said to be biodiversity’s ‘Paris Agreement’ moment paving the way for a more strategic approach to tackle both climate and biodiversity challenges internationally.

A whole-of-society approach

Realising this goal necessitates an integrated, whole-of-society approach. Business has a critical and irreplaceable role to play in delivering innovation, investment, and business models to improve quality of life, achieve sustainable prosperity, and ensure that our planet remains hospitable to human life.

Multiple international agreements on environmental issues

Measurable and viable metrics related to biodiversity are much more complex and difficult to quantify than greenhouse gas emissions, meaning that the biodiversity crisis does not have a similar North Star to the climate crisis: 1.5°C. Rather, biodiversity is a systems-wide, intercorrelated network of genetics, species, and ecologies. Scientists believe we are now living in the sixth great extinction where levels of species extinction rates are 100 – 1000 times higher than normal.

And while changes to the climate could be reversible (even if it takes thousands of years), extinctions are permanent.

The five drivers of biodiversity loss

The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) identifies five direct drivers of biodiversity loss:

  1. Changes in land and sea use.
  2. Direct exploitation of organisms.
  3. Climate change.
  4. Pollution.
  5. Invasive alien species.

We need an ambitious, comprehensive, and measurable framework that addresses all five of these drivers. Many who work in the sustainability sector argue for the integration of both COPs. They recognise the importance of nature to climate adaptation and as a carbon sink. Given the packed agendas for both, it is unlikely the two will be merged in the near future.


COP 15 outcomes: a new roadmap

Photo: COP 15 UN Biodiversity Conference: coral bleaching, Great Barrier Reef
Coral bleaching, Great Barrier Reef, Australia

The Kunming-Montreal Global biodiversity framework (GBF) is now finalised and approved by 190 governments. This could be the watershed moment for global biodiversity action: the GBF is the new roadmap for a nature positive transition.

The roadmap’s 23 targets aim to address all drivers of nature loss by the end of this decade providing clear and quantifiable goals and indicators to measure progress.

Important outcomes from the GBF:

  • Target 3 (30×30): a pledge to protect 30% of the world’s lands and oceans by 2030 (up from 17% and 10% respectively).
  • Target 7: reducing pollution risks which includes reducing use of chemicals, synthetic fertilisers, and plastics.
  •  Target 15: mandatory disclosure of nature risk.
  •  Target 18: redirecting at least US$500b of subsidies per year by 2030 for industries that are depleting nature as well as removing incentives that cause damage to biodiversity.
  • Target 19: resource mobilisation and redirecting financial flows towards biodiversity.

More information on the GBF Targets

We recommend the World Economic Forum article for its breakdown and case studies of the GBF’s 23 Targets.


Post COP 15: the Global Biodiversity Framework and business

Never has nature been such a high priority on the corporate agenda. The GBF recognises that business as usual destroys value across the capitals – whether natural, social, or human. Achieving the 23 agreed targets requires business, regulatory reforms, finance, and resources in an integrated, whole-of-society approach.

Companies that seize the opportunity to adopt nature-positive strategies will increase resilience while building stakeholder confidence and better managing growing regulatory risks.

Mandatory nature-related risk assessment and disclosure on the horizon

Companies around the globe have given unprecedented support for the GBF’s Target 15 (mandatory disclosure of nature risk). This is a clear signal for all large organisations that business as usual is no longer accepted. Rather, governments will require large entities to assess and disclose their impacts and dependencies on nature by 2030. Crucially, this applies across operations, supply and value chains, and portfolios.

Here are a few ways organisations can prepare for the upcoming mandatory reporting obligations.

  • Taskforce on Nature-related Financial Disclosures (TNFD) framework: an end-to-end guidance which considers the assessment, monitoring, and disclosure of your business’ impacts and dependencies on biodiversity to manage the relevant risks and opportunities.
  •  The Natural Capital Protocol helps identify significant risks and opportunities hidden in supply chains. This protocol addresses the drivers of biodiversity loss such as habitat destruction, over-exploitation of wild species, climate change, pollution, and invasive alien species.
  •  International standards such as GRI 304 helps ensure organisations are disclosing operational impacts against natural assets and ecosystems.
  • Using key metrics such as Science Based Targets Network’s (SBTN) interim targets mean organisations can set nature-related goals.
  • The International Financial Reporting Standards (IFRS) is in the process of releasing the final requirements of its Sustainability Disclosure Standards which will provide a common global language for sustainability-related disclosure. These standards will be published within the year.

Procurement policies

At Pangolin Associates we advise our clients to put in place procurement policies that focus on deforestation-free supply chains and supply-chain environmental and social due diligence.

Greater awareness of the impact of deforestation on both biodiversity loss and climate change draws attention to products such as beef, palm oil, soy, cocoa, natural rubber, coffee, and wood which convert natural habitats to agricultural land. Already many organisations make voluntary commitments to reduce or eliminate deforestation and other adverse environmental and social impacts from supply chains. Increasingly these organisations choose to report on these impacts and the mitigation measures undertaken.

While much of the impetus for nature-conscious procurement has come from businesses and individuals, governments have started to increase relevant legislation. The EU’s proposed regulation on halting the consumption of products coming from supply chains associated with deforestation is an important step in the right direction.

Capital: biodiversity credits and offsets

The gap between current and required annual funding for biodiversity protection is roughly $700 billion; this is frequently noted as the key obstacle for a successful GBF. Biodiversity offsets and credits are one way to increase the amount of capital. The GBF’s Target 19 (resource mobilisation and redirecting financial flows towards biodiversity) aims to create new ways for private sector finance to reach biodiversity services, including offsets and credits.

Biodiversity offsets are like carbon offsets in the compensation for equivalent unavoidable impact to ensure no net-loss in biodiversity. Conversely though, biodiversity credits focus squarely on the net-gain of natural systems and cannot offset impacts in one area for another.

Investment and holistic nature-based objectives

Biodiversity is becoming increasingly important for investors as a shift from climate-based considerations to more holistic nature-based objectives is often the primary objective for companies. This shift is important as nature and biodiversity credit markers encompass and include both carbon and non-carbon related ecosystems giving potential for them to overtake carbon-only credits or offsets.

Still, academics fear the monetisation of natural capital represents only a small number of ecological functions. It is imperative that the development of biodiversity credit and offset programs is well-considered and scientifically rigorous in both development and application.

Nature Positive Impact (NPI) and commercial activity

More and more regulations across the globe require new development or infrastructure projects to deliver NPI via enhancements to existing habitats or new habitat creation.

Accordingly the Australian Government’s Nature Positive Plan means that any negative biodiversity impacts caused by a project must be outweighed (a net gain) by the biodiversity gains through compensation measures implemented in the project region. This regulatory apparatus will affect how organisations operate; the cost of any associated environment impacts will be passed on to responsible entities.

Find more here:

Biodiversity loss mitigation hierarchy

NPI applications can be delivered on-site, offsite, or via biodiversity credits, although the mitigation hierarchy of avoidance, minimisation, and then compensation for biodiversity loss still applies throughout the project process.

This is important as biodiversity assets are location-specific and no two areas of habitat or species populations are identical. Offsets must be a last resort and in limited and well-defined situations to ensure net-positive biodiversity outcomes create consistency across all ecosystems, not simply an easier way to manage or replicate project obligations.


Call for action: stewardship, influence, and inclusion

In addition to implementing mitigation strategies, society’s most powerful voices, large businesses and corporate entities, must demand more from government and policymakers where commercial activity and development results in greater deforestation and harm to natural ecosystems.

Importantly, the GBF also acknowledges the roles and contributions of Indigenous Peoples and Local Communities (IP&LCs) as custodians and partners in the conservation, restoration, sustainable use of nature, and as rights and knowledge holders. A successful transition must give IP&LCs a seat at the table.


Conclusion

The importance of what was achieved at COP 15 should not be underestimated. The GBF was meaningful and provides a clear path forward for each of its signatory countries. From here, members states are expected to develop stronger domestic policies specifically related to their National Biodiversity Strategies and Action Plans, thus providing the guiding domestic policy and regulation within which companies need to operate.

Finally, the next COP will be held in 2024. Between now and then the subsidiary bodies will work to implement the COP 15 outcomes, and consolidate the scientific details related to the GBF. We are hopeful that the momentum built at COP 15 will result in more expedited and meaningful results rather than the stop-start nature in which UN talks on climate change have played out.


Our writers

Harry Knox, Pangolin Associates Consultant Climate SolutionsHarry Knox
Consultant | Climate Solutions

Harry helps organisations transition towards a sustainable, accountable future. His expertise includes all aspects of environmental, social, and corporate governance (ESG).

Read more about Harry.

Photo: Pangolin Associates: Mylene Turban | Senior Consultant | Climate SolutionsMylene Turban
Senior Consultant | Climate Solutions

Mylene is a registered Chemical Engineer. She has a particular interest in designing circular economy business models and facilitating climate change workshops.

Read more about Mylene.

Pangolin Associates: Maddy Rymill | Consultant | Climate SolutionsMaddy Rymill
Consultant | Climate Solutions

Maddy has extensive corporate experience. She provides GHG Assessments (Carbon Footprints), Climate Active carbon neutral certifications, and Science Based Targets consulting. Maddy is also CPA certified.

Read more about Maddy.


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