15 October 2024 - Businesses and financial institutions can go beyond low return, piecemeal actions to systemic changes that incorporate nature and generate positive value for the environment and economy, two CISL reports released today show.
Scaling finance for nature: barrier breakdown and Better business: rethinking value for nature positive outcomes look at how scaling nature-positive-aligned business models must be adopted to halt and reverse nature loss and how private commercial capital can be used already today to reduce pressure on nature and enable these systemic changes.
Two years ago in Montreal, the world witnessed a landmark achievement: an ambitious global agreement to protect and restore nature by 2030. It was the first time that the private sector showed up in force at a nature summit. As part of this, over 400 companies with revenues totalling over $2 trillion asked policymakers to make nature disclosures mandatory.
Over the past two years, there has been growing business momentum for action. But, for all the talk and optimism, economy-wide solutions remain virtually non-existent. Business responses are often focused on small nature projects with insufficient focus on the market infrastructure and incentives needed to drive action at scale.
Addressing these issues will require a different level of dialogue between the public and private sectors, going beyond platitudes to redesign markets, subsidies, and economic incentives. This is why CISL is working with partners from across Europe on the A-Track project to tackle these systemic problems, looking at how to support and scale business models. This will require a transformation of business practices and systems, as well as the right financing and investment.
Eliot Whittington, Executive Director, CISL: “Nature provides the fundamental underpinnings of our economy – it’s the critical ingredient that allows businesses to deliver their services and the economy to work. More and more business leaders and finance organisations are aware of this but right now the actions and investments from the private sector on nature are piecemeal, isolated and not addressing the scale of the problem. These reports set out the opportunity to move to a more joined up way of looking at things – rethinking business models and shifting mainstream finance to put nature at their heart and protect and restore it at scale.”
One example highlighted in the Scaling finance for nature; barrier breakdown report is asset manager Union Bancaire Privée’s UBAM Biodiversity Restoration Fund. The fund targets companies that have clear economic opportunities to help mitigate ecosystem damage, as well as those that seek a competitive opportunity in nature remediation, or that help mitigate biodiversity impact through innovation and new technologies. This fund is an example that demonstrates that nature finance isn’t just about protecting what remains, it’s about stopping the harm that is still being done.
Dr. Nina Seega, Director, Centre for Sustainable Finance, CISL: “The central message of this scene-setting report is that the whole finance sector can play a meaningful role in addressing the nature crisis already today. Well-established financial mechanisms can be used to redirect private capital away from harmful activities and towards those that restore and conserve nature. Nature positive finance is more than impact investing, it includes reducing pressure on nature through mainstream finance.”
Victoria Leggett, Equity Fund Manager and Head of Impact Development, Union Bancaire Privée: “There’s a perception that nature finance is restricted to the realm of conservation projects with low returns and low scalability. This report seeks to broaden the definition of nature finance, to include ‘halting’ nature loss (reducing existing pressures) alongside conservation efforts. Seen through this lens, nature finance becomes a term that can penetrate mainstream finance across a range of asset classes and returns expectations. This gap in both perception and financial flows must be closed to achieve our ultimate aim of a nature-positive economy.”