Merging nature and finance is crucial to meet biodiversity targets
The finalisation of the post-2020 global biodiversity framework is fast approaching, but for these ambitious yet realistic targets to materialise and be fully implemented in the next 10 to 30 years, massive support and commitment, most especially in the aspect of sustainable financing, are imperative. Earlier this year, the UN Environment Programme Finance Initiative underlined the importance of the “alignment of financial flows” and the pivotal role of private finance in bridging the calculated USD4.1 trillion gap.
Speaking at the Ethical Finance ASEAN 2022 Summit fireside chat on Financing Nature and Biodiversity last week, the ASEAN Centre for Biodiversity (ACB) Executive Director Dr Theresa Mundita Lim emphasised the significance of the “whole-of-society” approach in addressing biodiversity loss, particularly the need to mobilise support from various stakeholders and sectors.
“The ACB believes that biodiversity is everyone’s business, thus we endeavour to forge partnerships and cooperation to scale up mainstreaming biodiversity, particularly in the business and finance sector,” said Dr Lim. She added that the rate of biodiversity loss in the ASEAN and in the rest of the world has been identified as among the major risks to the global economy and that the “business-as-usual” approach could affect food security, particularly in income-poor countries, who, ironically are the most dependent on biodiversity as natural assets.
The Ethical Finance ASEAN Summit 2022 was a virtual event co-hosted by the Global Ethical Finance Initiative (GEFI) and the Asian Institute of Chartered Bankers (AICB), which gathered experts on sustainable and responsible finance in and around the ASEAN to discuss the various megatrends in the region, including climate change and biodiversity loss that affect the regional economy.
Tan Sri Azman Hashim, Chairman of the Asian Institute of Chartered Bankers (AICB), recognised the financial sector’s “enormous influence on the outcome of climate action” and urged the accelerated pace of adoption of responsible banking practices in the region.
“Nature loss and biodiversity risks represent a financial risk because everything is largely linked with nature––from harvesting or extraction to processing, to the end of the supply chain,” said Dr Lim. “Recognising this dependency, it is high time to put nature and biodiversity at the core of our sectoral development and business planning and consider nature as an integral part of managing business risks and strengthening accountabilities.”
As a region rich in biodiversity, the ASEAN is poised to harness such resources as a nature-based solution. One of the nature-based solutions being taken up and promoted by the ACB is the expansion of and effective management of protected areas and expanding the network of remarkable protected areas known as ASEAN Heritage Parks (AHP).
However, the sustainable management of these critical areas has always been hindered by a considerable financing gap, according to Amiel Sarne, AHP Programme Coordinator of the ACB, who also joined the Summit’s fireside chat. He lamented that despite existing financing mechanisms and increase in government financial support, the massive funding gap remains unabridged.
In 2020, the ASEAN Leaders adopted the ASEAN Comprehensive Recovery Framework (ACRF)––the region’s guiding principle in resilience building in light of the COVID-19 pandemic and long-term economic recovery.
An integral component of the ACRF is accelerating actions to mainstream biodiversity considerations into relevant national plans, sectors and cross-sectoral issues, such as climate change. The ACB, with its mandate to facilitate cooperation in mainstreaming biodiversity across pillars and sectors, has been working with the ASEAN Member States (AMS) and development partners in integrating biodiversity concerns into development processes, by engaging key sectors such as health, agriculture, tourism, education, in addition to the business and finance sector.
“Scaling up these ongoing mainstreaming efforts needs more cross-sectoral, cross-pillar collaboration,” said Sarne. “Establishing more dialogues among various stakeholders would gain more support for biodiversity, particularly in harmonising and operationalising policies on the ground.”
The framework encourages the finance sector to rethink supply and value chains and ensure a workable balance between people, planet, and profit. Lim emphasised that an essential part of this paradigm shift is knowing and appreciating the worth of what we are protecting, or losing. “Given that nature underpins economic and business activities, the creation of a nature-positive economic sector that values the interlinkages of nature and ecosystem services is of utmost importance.”
Working on scaling up and broadening natural capital accounting is integral in the efforts to mainstream biodiversity considerations into development processes, most especially at this juncture when the ASEAN Member States are working together in operationalising the ACRF and the adoption of the post-2020 global biodiversity framework.