After more than four years of negotiations, repeated delays due to the COVID-19 pandemic, and disagreements between nations, on 19 December, nearly 200 countries signed the Kunming-Montreal Biodiversity Agreement at COP 15. The agreement aims to put humanity on a path where it will live harmoniously with nature and includes 23 action-orientated global targets requiring urgent attention on biodiversity over this decade.
The historic agreement is on par with the 2015 Paris Agreement and is a monumental moment for biodiversity. The deal aims to protect 30% of land and water considered important for biodiversity and will reform USD 500 billion worth of environmentally-damaging subsidies. Many governments also agreed on urgent action to halt human-induced extinctions of species known to be most under threat and assist in promoting their recovery.
The agreement, once implemented, could signal major changes to farming, business supply chains, and the role of indigenous communities in conservation. It comes at a critical time when many scientists are warning that humans are causing the start of Earth’s sixth mass extinction.
Target 3: By 2030, protect and conserve at least 30% of terrestrial, inland water, and coastal and marine areas.
Target 4: Halt human-induced extinction of known threatened species.
Target 10: Ensure that areas under agriculture, aquaculture, fisheries and forestry are managed sustainably.
Target 15: Encourage and enable businesses to monitor, assess, and transparently disclose their risks, dependencies and impacts on biodiversity along their operations, supply and value chains and portfolios.
Target 18: By 2025, identify, eliminate, phase out or reform incentives, including subsidies, harmful towards biodiversity.
Target 19: Increase the level of financial resources from all sources to implement national biodiversity strategies and action plans by 2030, mobilising at least USD 200 billion per year.
For over two weeks, negotiations have stalled, with disagreements occurring about what protection looks like and who will pay for it. Divisions between developed and developing nations over who should pay to protect the Earth’s ecosystems threatened to derail the summit after a group of developing nations walked out, with some African nations wanting more money for conservation as part of the deal.
Countries from the global south, including Brazil and Indonesia which are home to the world’s largest rainforests, wanted governments to agree on the creation of a new biodiversity fund as part of the Kunming-Montreal biodiversity agreement to pay for the new targets.
In echoes of last month’s COP 27 climate summit in Egypt, where countries attempted to agree to create a new fund to compensate loss and damage from climate change to vulnerable nations, countries from the developing world left talks due to disagreements over funding.
Whilst action from governments is needed, new interest from the financial community is hopeful. The private sector is slowly introducing financial mechanisms for biodiversity, such as debt-for-nature swaps, biodiversity credit markets, and natural capital funds. Further, the regulatory requirements as part of the framework, will see companies needing to report on their risks, dependencies, and impacts on biodiversity for the first time.
The global community now has a roadmap to protect and restore nature and use it in a sustainable way for current and future generations. As always, these agreements are not perfect, with larger economies like Brazil and China receiving more funding than African nations, and the US did not participate. But with each agreement, more steps are being taken to protect biodiversity and raise awareness of the unpriced risks of biodiversity loss.
The issues of climate and biodiversity are intrinsically connected through mechanistic links and feedback loops and share common anthropogenic drivers. Climate change exacerbates risks to biodiversity and habitats. At the same time, natural and managed ecosystems and their biodiversity play a key role in the extraction of greenhouse gases (GHGs) and climate mitigation and adaption.
In his keynote address at the conference, Mark Carney, Chair of Brookfield Asset Management, urged the private sector to ensure that net-zero transition plans include clear priorities on deforestation, protecting nature, and restoring biodiversity. Carney opened “finance day”, a first for the conference, where representatives from pension funds, asset managers, central banks, data providers and many more gathered to discuss the private sector’s role in tackling the nature crisis.
In his concluding remarks Carney said “The world is still not acting with the urgency that the twin crises of nature and climate demand. Whilst climate change has moved higher on most investors’ agendas, there has been less interest in the biodiversity crisis. CO2 can be priced and traded, but how do investors value nature? Moving forward, net-zero commitments must ensure their transition plans include clear priorities on deforestation and protecting nature and restoring biodiversity”.
The Kunming-Montreal biodiversity agreement, whilst not legally binding, is a step forward in ensuring that governments across the world show their progress on meeting the targets set within the framework. Whilst we expect governments around the world to be slower to enact elements of the Kunming-Montreal biodiversity agreement into legislation, private capital should flow relatively quickly in some areas such as agriculture, aquaculture and fisheries, as well as forestry and water and waste management, creating opportunities for investors.
Overall, a monumental moment for biodiversity, with over 200 countries agreeing that protecting biodiversity is a global priority.
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