biodiversity credits Archives - Global Landscapes Forum

Innovative Finance for Nature and People

kneditor — Tue, 21 May 2024 13:30:00 +0000

Primary tropical forests are vital for achieving the Sustainable Development Goals, the Paris Climate Agreement, and the Kunming-Montreal Global Biodiversity Framework, especially benefiting host countries and Indigenous People and Local Communities (IPLCs). The One Forest Summit in Libreville, co-hosted by France and Gabon, aimed to ensure these ecosystems are protected and restored for their environmental, economic, cultural, and social benefits.

This report assesses the state of biodiversity finance and recommends new financial mechanisms, focusing on biodiversity-positive carbon credits and nature certificates. It was developed by a High-Level Working Group with support from an Expert Panel.

Key Messages

1. Financial gap: global biodiversity financing needs to increase to $200 billion annually by 2030, while reducing harmful subsidies by $500 billion per year.
2. Innovative instruments: biodiversity-positive carbon credits and nature certificates can help bridge the financing gap and generate private sector interest.
3. Governance and policy: effective governance, clear policies, and institutional frameworks are crucial for market integrity and scaling up finance.
4. IPLC involvement: full participation and benefit-sharing with IPLCs are essential for successful stewardship of forests and biodiversity.
5. Market development: practical metrics, robust verification processes, and demand incentives are needed to develop high-integrity markets.

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Biodiversity Credit Markets: The role of law, regulation and policy

kneditor — Tue, 21 May 2024 13:03:27 +0000

This paper explores the development of biodiversity credit markets, highlighting the importance of a robust governance framework supported by laws, policies, and regulations. It examines current initiatives in both the public and private sectors and offers principles and recommendations for scalable, high-integrity markets.

Highlights

Financial gap: current conservation spending is $124-$143 billion annually, with a $598-$824 billion gap needed to address global biodiversity loss.
Case studies: examples from New Zealand, Colombia, Australia, and others showcase current initiatives.
International frameworks: the Kunming-Montreal Global Biodiversity Framework highlights the importance of biodiversity credits for financial mobilization, emphasizing the need for standardized rules and safeguards for Indigenous and local communities.
Financial assets and legal enablers: identifies legal mechanisms to enhance private sector investment, such as natural capital accounting and risk disclosure.
Governance framework: stresses the need for stakeholder engagement to build a governance framework that ensures market integrity and confidence.
Principles and recommendations: proposes five key principles for achieving high-integrity outcomes in biodiversity credit markets.

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Harnessing Biodiversity Credits for People and Planet

kneditor — Tue, 21 May 2024 10:11:28 +0000

The One Forest Summit in March 2023 spotlighted biodiversity credits, focusing on biodiversity-positive carbon credits, guided by the GEF’s report on innovative finance for nature. This paper builds on the summit’s outcomes and outlines the rising trend and design challenges of biodiversity credits. It proposes a Global Roadmap to create robust, high-integrity biodiversity credit markets, ensuring they support global biodiversity and climate goals, with France and the UK leading the initiative.

Key Messages

Policy and governance: clear policies, good governance, and transparent engagement are vital for effective biodiversity credits.
Financial mechanisms: biodiversity credits can enhance financial tools to achieve global biodiversity and climate goals.
Current trends: increased visibility of biodiversity is driving definitions, measurement schemes, trading pilots, and regulatory developments.
International cooperation: essential for scaling biodiversity credits and channeling financial flows to meet sustainability targets.
Financial support: needed for biodiversity maintenance, threat mitigation, restoration, and regenerative practices.
Design challenges:
- Measurement: credible and affordable biodiversity monitoring.
- Demand: sustained high-integrity demand.
- Supply: ensuring high-integrity supply with positive outcomes.
- Equity: fair pricing and distribution of rewards.
- Governance: robust and transparent institutional arrangements.

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Biodiversity Credits: A Guide to Support Early Use with High Integrity

kneditor — Wed, 15 May 2024 10:20:54 +0000

The World Economic Forum and McKinsey have published this comprehensive outline of how companies can engage in the emerging voluntary biodiversity credits industry with integrity.

Another piece in Nature Finance industry puzzle is falling into place, in the form of Biodiversity Credits. It’s still early days but to support this evolution, the World Economic Forum and McKinsey have published two reports on the topic. With the potential for global demand of voluntary biodiversity credits reaching $2 billion in 2030 and $69 billion by 2050, the first report – Biodiversity Credits: Demand Analysis and Market Outlook – explores the drivers, and maps out an overview of the market. Meanwhile, the second report – Biodiversity Credits: A Guide to Support Early Use with High Integrity – which our Founder, Paul Chatterton, contributed to, is a practical guide for companies who are interested in incorporating biodiversity credits into their strategy with high integrity, whilst standards and advice are established.

Key messages

Arguably, the biodiversity crisis is larger and more advanced than the climate crisis – and much harder to see. The finance world is creating the conditions for a nature repair industry. Bankers don’t understand nature and conservationist don’t understand finance – but working together they are building this new world of nature positive investment. Here are a few observations:

Nature is now part of doing business: The new global accounting rules under the IFRS now demand companies to report on nature impact. This is a big change and barely understood, but it’s already flowing down.
Smart companies are working out how to remove nature risk: The Taskforce on Nature-related Financial Disclosures (TNFD) has been drawing the big crowds at the global finance and business conferences I’ve attended in recent months. TNFD provides simple guidance for companies to report on nature impact and determine how to move towards nature positive. If your COO is not already looking at nature risk, they’re not doing their job.
Contributing to restoring nature can be an income stream: Companies who are actively shifting their supply chain to positively restore nature can obtain credits for biodiversity contributions and make this an additional income stream.
Credits help bridge the gap where nature risks can’t be fully removed: If your assessment of nature risk shows that you will still have residual impact then biodiversity credits offer a way to fill the gap.
Forget offsets: Offsets don’t make sense with biodiversity. You can’t restore nature by destroying it. And while some offset markets still continue in England and New South Wales, evaluations are suggesting they’re not so successful. Both the Science Based Targets initiative and TNFD now challenge offsets. All future nature investments have to add to nature.
The most credible nature credits will be at landscape scale: Nature operates in scales of millions of hectares. We have to think about water flows, migration corridors, and pollination systems. Only landscape-level action allows for this. So look for biodiversity credits that contribute to landscape efforts. And they come with the added advantage of ensuring greater social license and shared value.

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