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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.https://whc.unesco.org/en/news/2349. 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. https://www.worldbank.org/en/topic/natural-capital. 3. https://www.cbd.int/doc/c/abb5/591f/2e46096d3f0330b08ce87a45/wg2020-03-03-en.pdf. 4. World Bank, The Economic case for Nature World Bank Document https://openknowledge.worldbank.org/bitstream/handle/10986/35882/A-Global- Earth-Economy-Model-to-Assess-Development-Policy-Pathways.pdf?sequence=1&isAllowed=y 2

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