As we enter 2023, we are propelled by the positivity from the landmark deal and key targets agreed as part of the COP15 Global Biodiversity Framework in Montreal. Discussions and panels at The World Economic Forum in Davos highlighted the need for corporate biodiversity risk disclosure frameworks pinning hope on the emergence of the TNFD (Taskforce on Nature-related Financial Disclosures). There is no question that financial markets recognise the nature dependency of the global economy. The World Economic Forum estimates that roughly half of the global GDP, or about $44 trillion of economic value, depends on the natural world in some shape or form, an awakening to the financial markets, meaning its demise carries a huge financial toll.
The new targets set at COP15 declared for financial firms to disclose their biodiversity footprint and most significantly Target 15 of the GBF (Kunming-Montreal Global Biodiversity Framework) states that financial institutions should "Regularly monitor, assess, and transparently disclose their risks, dependencies and impacts (...) along their operations, supply and value chains and portfolios".
With the emergence of these new frameworks and nature markets, what are the opportunities for the private sector? There is huge demand from financial institutions and investors who don’t have an auditable way to invest in nature. What’s required is the emergence of nature-based solutions focusing on alleviating the risk, that can’t be eliminated, using a standardised metric framework. Increasing transparency on supply chain impact on nature loss will give investors and corporations the opportunity to accurately target opportunities to increase biodiversity, and mitigate the risk.
Technological advances allow us to easily declare climate and nature risk through asset-based geolocation, from emerging startups such as Quantifying Nature and other financial risk frameworks such as the TNFD. Advances in geo spatial data allow us to accurately identify critical landscapes in need of urgent funding and channel it at scale. According to Juha Siikamäki, Chief Economist at the International Union for Conservation of Nature (IUCN) “we need to figure out how to scale up the projects and drive down the transaction costs.”(Environmental Finance, 2023).
THE ARK is one solution for the public and private sector to accurately target and mitigate business supply chain risk at scale. THE ARK’s access to the conservation industry makes it a portal to a multitude of conservation engagements categorised by sector, geography, SDG, ESG and more.
Biodiversity engagements and their metrics vary depending on the landscape and environment, however the framework enables baselines and targets to be set by conservationists and investors to construct their global project portfolio and track their performance. Accurate and verified real time data allows corporations and organisations to account for biodiversity gain, adjust corporate operations and contribute before the harm occurs. Using various temporal, numeric and spatial data feeds THE ARK can take areas such as palm oil plantations and evaluate its nature impact over time and propose opportunities to mitigate or adapt.
At the recent launch of the GAEA (Giving to Amplify Earth Action) initiative in Davos, Per Heggenes, Chief Executive Officer, IKEA Foundation, said ‘The global figure of philanthropic capital for climate mitigation currently stands under 2% and that is not acceptable. But this is also a massive opportunity to leverage philanthropic giving for climate action.' THE ARK provides a solution by offering investments in philanthropy but also different asset classes such as blended finance.
In order for the financial sector to actively and positively engage in reducing biodiversity loss, tackle climate change and reach net zero by 2050, it will require the collaboration of major philanthropists, public and private sector organisations to mobilise mainstream finance direct to grass roots, credible conservationists at scale.The issue of biodiversity loss is immediate and devastating with species being wiped out daily, the reduction in loss requires the private sector and philanthropists to act now.
Author Qasim Abbas
Co-Founder THE ARK | LinkedIn
More about THE ARK