Biodiversity Is A Global Asset That Should Be Factored Into Investment Strategies – CleanTechnica

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Readers of this publication are definitely interested in the intersection of technology and decarbonization. Yet you may not think a whole lot about biodiversity. When you mull it over, though, despite all our technological advances, we all are completely dependent on healthy and vibrant ecosystems for our water, food, medicines, clothes, fuel, shelter, and energy. This involves respecting, protecting, and repairing our biological wealth.

Today is the UN International Day for Biological Diversity. This year’s theme is “Be Part of the Plan,” which refers to the adoption of the Kunming-Montreal Global Biodiversity Framework, also known as The Biodiversity Plan. It sets goals and concrete measures to stop and reverse the loss of nature by 2050.

This is a call to action to encourage you and all the groups to which you belong — governments, indigenous peoples, local communities, non-governmental organizations, lawmakers, businesses, and individuals — to highlight the ways you are #PartOfThePlan.

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Sometimes biodiversity seems too broad, too complex to take in. Yet the famous quote by Neil deGrasse Tyson still stands out. “We are all connected: To each other, biologically. To the earth, chemically. To the rest of the universe, atomically.”

Biodiversity encompasses all life forms on our planet and the finely-tuned ecosystems they inhabit. All the processes to sustain life and make us healthy and happy are drawn from our biologically diverse planet. However, this crucial natural capital, the heart of the global economy, is under severe threat of degradation and eventual exhaustion, with almost 70% of the world’s biodiversity lost in the past 5 decades and one million species on the limits of life.

To put that understanding into numerical terms, currently over 50% of the world’s total gross domestic product is moderately or highly dependent on nature. According to the World Economic Forum’s 2023 Global Risks Report, the loss of biodiversity and collapse of ecosystems is the fourth most severe global risk facing us in the next decade.

On this UN International Day for Biological Diversity, though, there is another way to look at biodiversity — one that combines investment and respect for species. Sami Asad, professor of sustainability and ecology at Tomorrow University of Applied Sciences, suggests that leaders should be aware of how biodiversity-driven ventures are projected to generate $10 trillion annually. “Technological innovation combined with biodiversity principles offers hope and a blueprint for the future,” Asad says. “To tap into this, leaders must shift their money mindset and use their influence for societal and environmental good — before it’s too late.”

Asad offers the example of using nature’s principles to create innovative, sustainable solutions for global challenges like population growth. “With 70% of the world’s population expected to live in cities by 2050, urban planning must integrate natural elements,” he explains. Items like green roofs, walls, and spaces will reduce urban heat, improve air quality, and enhance life quality. “Unions, CEOs, and changemakers must embrace continuous learning and collaborate with experts for more informed decisions that blend environmental stewardship with development.”

By aligning with the Biodiversity Plan, Asad feels confident we can support efforts to halt and reverse biodiversity loss. “We must profit with purpose.”

Biodiversity & Sound Investing

It is more important than ever to integrate biodiversity considerations into investment strategies for both long-term financial resilience and our environment. In fact, 2024 Franklin Templeton investment management survey data outlines ways that high-impact companies can and should prioritize the protection of biodiversity alongside their transition to a net zero economy. This publication is a call to action for high impact companies to address the challenges related to land use, deforestation, water conservation, climate change mitigation, waste management, and species conservation.

Their findings demonstrate that companies do recognize the importance of biodiversity, with a significant majority of respondents understanding that it contributes to positive customer perception, can create new business opportunities, and has the capacity to help with disaster prevention and natural resource dependency. Investees, it turns out, appreciate the importance of biodiversity considerations in the investment process and are also increasingly aware of the risks and opportunities around biodiversity.

Here are the Franklin Templeton report’s key findings.

• Nature is a valuable asset, and it is everyone’s job to consider the ways in which use of that asset can have a positive or negative impact on investments.
• Investors need to raise awareness around and drive action for prioritizing the consideration of biodiversity risks and opportunities in business practices.
• Of the companies surveyed, 77% had a biodiversity-related policy in place.
• The survey revealed that 54% of companies had operations located in or near biodiversity-sensitive areas and had implemented all the relevant mitigation measures to ensure that their operations did not negatively affect those area.
• Within the survey, 11% of the companies were unaware of where their facilities were located in relation to biodiversity-sensitive areas, highlighting the need for more engagement.
• Companies are not standalone entities and often cooperate with a wide network of suppliers.

Biodiversity policies are important because they help to promote the protection, conservation, and sustainable use of biologically diverse ecosystems and habitats.

Although most of these highlights lean toward the positive, the survey results do indicate that there is still much room for improvement in integrating supply chains in companies’ biodiversity protection efforts. Moreover, because so many companies do not find species conservation to be material and, consequently, lack relevant corporate reporting frameworks, work remains to be done toward biodiversity. The Taskforce on Nature-Related Financial Disclosures and Science Based Targets Network, as well as an update to the Global Reporting Initiative and the expansion of the PAI indicators, are called for in order to bring about such a change.

Final Thoughts

On this UN International Day for Biological Diversity, it makes sense to understand the mission of the Biodiversity Plan for the period up to 2030 and towards the 2050 vision. The Plan calls for urgent action to halt and reverse biodiversity loss to put nature on a path to recovery for the benefit of people and the planet.

To achieve this, nations around the world will need to:

• Conserve and sustainably use biodiversity
• Ensure the fair and equitable sharing of benefits from the use of genetic resources
• Provide the necessary means of implementation

The background to the Biodiversity Plan says it all:

• An average of around 25% of species in assessed animal and plant groups are threatened, suggesting that around 1 million species already face extinction, many within decades, unless action is taken to reduce the intensity of drivers of biodiversity loss. Without such action, there will be a further acceleration in the global rate of species extinction, which is already at least tens to hundreds of times higher than it has averaged over the past 10 million years.
• The biosphere, upon which humanity as a whole depends, is being altered to an unparalleled degree across all spatial scales. Biodiversity – the diversity within species, between species and of ecosystems – is declining faster than at any time in human history.
• Nature can be conserved, restored and used sustainably while other global societal goals are simultaneously met through urgent and concerted efforts fostering transformative change.
• The direct drivers of change in nature with the largest global impact have been changes in land and sea use, direct exploitation of organisms, climate change, pollution, and invasion of alien species. These 5 direct drivers result from an array of underlying causes; the indirect drivers of change are underpinned by social values and behaviors.

Protection of natural systems faces an estimated financing gap of $700 billion a year. Economic risks from biodiversity loss are right in front of us, and Wall Street’s increased interest in the biodiversity crisis needs to accelerate.