Biodiversity refers to forests, oceans, and other ecosystems, as well as efforts to protect them. It’s vital because processes such as the nitrogen and carbon cycle are impossible without a variety of organisms existing and being involved at every stage, while ecosystem services such as pollination and flood prevention are inextricably linked with life on our planet.
Investing in biodiversity involves mobilising sustainable finance for the conservation and restoration of natural habitats, as well as promoting sustainable practices. Worryingly, just $124-143 billion is mobilised each year to biodiversity conservation. Approximately 80-85% of funding is derived from the public sector through governmental budgets and taxation – estimates of biodiversity funding needs by 2030 amount to $722-967 billion each year1.
Bridging the financial gap therefore requires mobilising $598-824 billion every year by that time horizon. This is mostly needed for agriculture transition (54%), protected areas (21%) and urban environment (10%), while other activities (mitigation of invasive species, coastal restoration, fisheries, and forest maintenance) altogether amount to 15%1.
By comparison, $632 billion is mobilised annually for climate-related projects2. However, it’s important to point out that biodiversity loss and climate change are intrinsically linked. So, while biodiversity loss recently fell out of the World Economic Forum’s top 10 most pressing risks list for the next two years, a trade-off between climate and biodiversity is disingenuous.
As the report highlighted: “Without significant policy change or investment, the interplay between climate change impacts, biodiversity loss, food security and natural resource consumption will accelerate ecosystem collapse, threaten food supplies and livelihoods in climate-vulnerable economies, amplify the impacts of natural disasters, and limit further progress on climate mitigation.”3
Biodiversity is a very serious topic that needs attention, which is why our experts from Mirova, lead expert on Climate and Environment, Manuel Coeslier, and ESG analyst, Hadrien Gaudin-Hamama, have been looking into how investors can take advantage of the opportunities and tangibly invest in biodiversity.
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Mirova is an affiliate of Natixis Investment Managers
1 Source: Financing Nature: closing the global biodiversity financing gap, 2021, Paulson Institute, https://www.paulsoninstitute.org/conservation/financing-nature-report/
2 Source: Global Landscape of Climate Finance, 2021, Climate Policy Initiative, https://www.climatepolicyinitiative.org/publication/global-landscape-of-climate-finance-2021/
3 Source: WEF Global Risks Report 2023, https://www.weforum.org/reports/global-risks-report-2023/digest
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