Content thumbnail COP 15 preview: the “Paris moment” for nature?
AI Content Chat (Beta) logo

COP 15 preview: the “Paris moment” for nature?

Melissa Bourassi, November 2022

COP 15 preview: the “Paris moment” for nature? November 2022 We expect biodiversity to be a major theme for investors in 2023, after the recent COP 27 formally acknowledged the link between the climate and biodiversity crises – as underscored by severe weather events this year. We hope that the upcoming COP 15 – a conference dedicated to biodiversity – will agree a global biodiversity framework for the coming decade that will live up to high expectations. Mélissa Bourassi The ambition is to put the world on a path that Sustainability Key takeaways secures nature for future generations. The Kunming Analyst 1 – The focus of this year’s COP 15 is to Declaration , a political declaration aimed at adopt a globally agreed framework – the demonstrating political ambition, was adopted post-2020 global biodiversity framework during the high-level segment of the conference. – which could be a unique opportunity The second part of the CBD COP 15 will take to reverse biodiversity loss and support place in Montreal, Canada from 7-19 December, climate action. under the Chinese COP presidency in coordination – While hopes are high that COP 15 could with the Canadian government. The conference be the “Paris moment for nature” – will see a gathering of representatives from 196 echoing the progress made on climate governments. in the Paris Agreement of 2015 – there are challenges to overcome around the mobilisation of finance for nature What is COP 15? restoration. th – The good news is that a successful COP COP 15 stands for the 15 Conference of 15 could be a springboard for greater the Parties (COP 15) of the Convention integration of natural capital into on Biological Diversity (CBD). Adopted in investment decisions and opportunities. 1992, the CBD is the first global agreement to cover all aspects of biological diversity, focusing on three main objectives: While COP 27, the better-known climate confer- – The conservation of biological diversity ence, has seized the headlines recently, attention – The sustainable use of the components of will soon turn to COP 15, the dedicated conference biological diversity on biodiversity. The first part of the CBD COP 15 (to – The fair sharing of the benefits arising out give it its full name) took place virtually from 11-15 October 2022 and focused on the development of the utilisation of genetic resources of the post-2020 global biodiversity framework. 1. Value. Shared.

COP15 preview: the “Paris moment” for nature? Why is COP 15 so important? Biodiversity intersects with many other sustainability topics, such as the impact that land loss has on com- Biodiversity is integral to the “planetary boundaries” topic, munities. Reflecting these social factors, the framework which addresses how we will sustain our global population acknowledges the need for appropriate involvement and in a higher temperature world. This topic is one of Allianz empowerment of women and youth, and recognition of Global Investors’ three core sustainability themes (together the crucial role indigenous peoples and local communi- with climate change and inclusive capitalism). Natural ties play in the implementation of the framework. capital – the world’s stock of natural assets – is being harmed by human activity at an unprecedented rate, What are we hoping for at COP 15 – or expecting? impacting the functioning of ecosystems and the ability to provide basic life-support services.2 We think the three thematic days covering biodiversity themes at COP 27 set the scene rather than advanced The primary aim of COP 15 is to adopt a globally agreed the cause. At COP 15, we hope for – and, indeed, expect framework known as the post-2020 global biodiversity –a positive final agreement on the framework to halt framework. This move would represent the most significant biodiversity loss. event for the natural capital agenda this decade. However, a key question, and one where regulation The first draft of this framework was published in July 20213 may play a part, is around the financing of biodiversity and was built on the lessons learned from the failure of conservation and restoration. Today, it is estimated that the Strategic Plan for Biodiversity 2011-2020 and its Aichi the public and private financial flows that are harmful Biodiversity Targets. Those targets were not fully met, and to biodiversity are at least five to six times higher than natural degradation accelerated. The intention is to create the finance for preserving biodiversity.4 This topic will the nature equivalent of the Paris Climate Agreement, with also extend to the direction and redirection of subsidies, an ambitious plan to halt and reverse biodiversity loss by especially for low-income countries. 2030 and achieve net targets by 2050. To achieve a progress in this area, clear guidance will The post-2020 framework differs from its predecessor in be needed on how companies can operate while being being more “outcome-orientated”, with four long-term nature-positive – or at least not nature-negative. We 2050 goals related to conservation, sustainable use of believe this guidance will be framed by the evolution in biodiversity, fair benefit-sharing and adequate means biodiversity data, risk identification and management, of implementation of the vision. In addition, there are 21 disclosures and possibly regulation. action-orientated targets for 2030. See some examples of the targeted outcomes below. This year has already seen the introduction of formal biodiversity screening and reporting requirements into investments. A successful COP 15 should propel biodiver- Examples of goals of the post-2020 global sity into greater focus for 2023, where the measurement biodiversity framework and screening for biodiversity – as well as the engage- – Protecting at least 30% of the planet’s land and ment around this topic and its integration into investment decisions – will likely evolve rapidly and significantly. marine areas by 2030, especially areas of particular This is likely to be reinforced by recommendations from importance for biodiversity. the Taskforce on Nature-related Financial Disclosures, – Preventing or reducing the rate of introduction and which are scheduled to be released next year and aim to establishment of invasive alien species by 50%. enable organisations to report and act on nature- – Reducing nutrients lost to the environment by at related risks. least half and pesticides by at least two-thirds and eliminating plastic waste discharge. – Using ecosystem-based approaches to contribute to mitigation and adaptation to climate change. – Redirecting, repurposing, reforming or eliminating incentives harmful for biodiversity in an equitable way, reducing them by at least USD 500 billion per year. 2. 3. 4. World Bank, The Economic case for Nature World Bank Document Earth-Economy-Model-to-Assess-Development-Policy-Pathways.pdf?sequence=1&isAllowed=y 2

COP15 preview: the “Paris moment” for nature? Allianz Global Investors is a leading active asset manager with over 600 investment professionals in over 20 offices worldwide and managing EUR 521 billion in assets. We invest for the long term and seek to generate value for clients every step of the way. We do this by being active – in how we partner with clients and anticipate their changing needs, and build solutions based on capabilities across public and private markets. Our focus on protecting and enhancing our clients’ assets leads naturally to a commitment to sustainability to drive positive change. Our goal is to elevate the investment experience for clients, whatever their location or objectives. Active is: Allianz Global Investors Data as at 30 September 2022. Total assets under management are assets or securities portfolios, valued at current market value, for which Allianz Asset Management companies are responsible vis- ávis clients for providing discretionary investment management decisions and portfolio management, either directly or via a sub-advisor. This excludes assets for which Allianz Asset Management companies are primarily responsible for administrative services only. Assets under management are managed on behalf of third parties as well as on behalf of the Allianz Group. Investing involves risk. The value of an investment and the income from it will fluctuate and investors may not get back the principal invested. Past performance is not indicative of future performance. This is a marketing communication. It is for informational purposes only. This document does not constitute investment advice or a recommendation to buy, sell or hold any security and shall not be deemed an offer to sell or a solicitation of an offer to buy any security. The views and opinions expressed herein, which are subject to change without notice, are those of the issuer or its affiliated companies at the time of publication. Certain data used are derived from various sources believed to be reliable, but the accuracy or completeness of the data is not guaranteed and no liability is assumed for any direct or consequential losses arising from their use. The duplication, publication, extraction or transmission of the contents, irrespective of the form, is not permitted. This material has not been reviewed by any regulatory authorities. In mainland China, it is for Qualified Domestic Institutional Investors scheme pursuant to applicable rules and regulations and is for information purpose only. This document does not constitute a public offer by virtue of Act Number 26.831 of the Argentine Republic and General Resolution No. 622/2013 of the NSC. This communication’s sole purpose is to inform and does not under any circumstance constitute promotion or publicity of Allianz Global Investors products and/or services in Colombia or to Colombian residents pursuant to part 4 of Decree 2555 of 2010. This communication does not in any way aim to directly or indirectly initiate the purchase of a product or the provision of a service offered by Allianz Global Investors. Via reception of his document, each resident in Colombia acknowledges and accepts to have contacted Allianz Global Investors via their own initiative and that the communication under no circumstances does not arise from any promotional or marketing activities carried out by Allianz Global Investors. Colombian residents accept that accessing any type of social network page of Allianz Global Investors is done under their own responsibility and initiative and are aware that they may access specific information on the products and services of Allianz Global Investors. This communication is strictly private and confidential and may not be reproduced. This communication does not constitute a public offer of securities in Colombia pursuant to the public offer regulation set forth in Decree 2555 of 2010. This communication and the information provided herein should not be considered a solicitation or an offer by Allianz Global Investors or its affiliates to provide any financial products in Brazil, Panama, Peru, and Uruguay. In Australia, this material is presented by Allianz Global Investors Asia Pacific Limited (“AllianzGI AP”) and is intended for the use of investment consultants and other institutional/professional investors only, and is not directed to the public or individual retail investors. AllianzGI AP is not licensed to provide financial services to retail clients in Australia. AllianzGI AP is exempt from the requirement to hold an Australian Foreign Financial Service License under the Corporations Act 2001 (Cth) pursuant to ASIC Class Order (CO 03/1103) with respect to the provision of financial services to wholesale clients only. AllianzGI AP is licensed and regulated by Hong Kong Securities and Futures Commission under Hong Kong laws, which differ from Australian laws. This document is being distributed by the following Allianz Global Investors companies: Allianz Global Investors U.S. LLC, an investment adviser registered with the U.S. Securities and Exchange Commission; Allianz Global Investors Distributors LLC, distributor registered with FINRA, is affiliated with Allianz Global Investors U.S. LLC; Allianz Global Investors GmbH, an investment company in Germany, authorized by the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin); Allianz Global Investors (Schweiz) AG; in HK, by Allianz Global Investors Asia Pacific Ltd., licensed by the Hong Kong Securities and Futures Commission; ; in Singapore, by Allianz Global Investors Singapore Ltd., regulated by the Monetary Authority of Singapore [Company Registration No. 199907169Z]; in Japan, by Allianz Global Investors Japan Co., Ltd., registered in Japan as a Financial Instruments Business Operator [Registered No. The Director of Kanto Local Finance Bureau (Financial Instruments Business Operator), No. 424], Member of Japan Investment Advisers Association, the Investment Trust Association, Japan and Type II Financial Instruments Firms Association; in Taiwan, by Allianz Global Investors Taiwan Ltd., licensed by Financial Supervisory Commission in Taiwan; and in Indonesia, by PT. Allianz Global Investors Asset Management Indonesia licensed by Indonesia Financial Services Authority (OJK). © 2022 Allianz Global Investors 2617945 | LDS-220631