The UN Biodiversity Conference (COP16): Takeaways from Planet Tracker

This paper provides an overview for financial institutions of the most pertinent issues identified by Planet Tracker from the UN Biodiversity Conference (COP16) in Cali, Colombia. Topics range from the availability of nature transition plans, to who has responsibility for nature in government structures – it’s looking complicated, to the availability of nature data – or rather its processing and analysing. The struggle to finance countries’ nature and ecosystem services remained unresolved.

Financing nature: a mixed bag

It is widely recognised that there is a significant shortfall in financial flows into nature positive investments. In 2002, nature-based solutions (NbS) flows were USD200 billion. But these investments were overwhelmed by nature negative payments of USD6.7 trillion.ⁱ COP16 witnessed several discussions about environmentally harmful subsidies (EHS), as a potential solution to meet the funding shortfall through reallocation rather than relying on new sources. See ”Nature finance: is relying on subsidy reallocation realistic?”. The International Institute for Sustainable Development (IISD) intends to release a more detailed analysis of EHS later this year.ⁱⁱ

When nature flows are examined, so is the term “nature positive”. Aware of the manipulation of terms such “carbon positive” and “net zero”, and keen to avoid greenwashing claims, the Nature Positive Initiative (NPI) was very active in convening meetings to build a consensus on ‘The State of Nature’ Metrics.ⁱⁱⁱ The NPI commented that it will carry on our work beyond the conference, providing a measurement framework to credibly report on progress towards nature-positive outcomes”.^iv

Finance Ministers in the room

Many at COP16 were encouraged by the attendance of several Finance Ministers, implying that nature considerations are moving beyond the Environment and Agriculture Ministries.^v The overarching challenge is whether the bioeconomy can be linked to the existing economic system. In our pre-COP16 blog – “What financial institutions need to know before the UN Biodiversity (COP16)” – we listed a range of financial instruments being used to finance nature. Planet Tracker sensed a growing unease over debt-for-nature swaps, largely because of their costs to sovereign states. Biodiversity credits continue to attract a lot of discussion assisted by the launch of the Framework for high integrity biodiversity credit^vi markets by the International Advisory Panel on Biodiversity Credits, but with little to show in terms investment. Some question whether so much effort is worthwhile. To help scale these credits, the Biodiversity Credit Alliance has proposed digitally native frameworks.^vii BloombergNEF (BNEF) estimated that less than USD 1 million of credits have been purchased to date.^viii In comparison, it estimated existing biodiversity inflows are USD 208 billion annually.

The nature-linked instruments list is expanding

As expected, some issuers took the opportunity to publicise new nature-linked instruments. For example, the Inter-American Development Bank (IDB) and BBVA Colombia, announced the placement of the first thematic bond with an exclusive focus on biodiversity projects in Latin America and the Caribbean.^ix Meanwhile, the International Finance Corporation (IFC) announced an investment of up to US$50 million in a biodiversity green bond issuance by Banco Davivienda, to finance Colombian projects aimed at conserving, protecting, and restoring biodiversity and nature.^x An USD 60 million ‘Country Package’ for Forests, Nature, and Climate collaboration was announced by France, the Fonds d’amorçage des Partenariats Pays, The Nature Conservancy (TNC), the Global Environment Facility (GEF), and the United Nations Development Programme (UNDP), which will work together to support Gabon’s commitments to forests, nature, and climate via the Global Biodiversity Finance Initiative (BIOFIN).^xi

Also worthy of mention is the partnership between WWF and European Investment Bank (EIB). The former will establish an ‘incubation facility’ to develop a pipeline of Nature-based Solutions from origination until they are investment-ready, while the latter will provide guidance on mobilising public and private funding for them.

From the negotiations room

Progress was made in negotiations regarding sharing benefits from use of digital sequence information on genetic resources (DSI), despite opposition from the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA). It stated, “The ability to rapidly use scientific data known as “digital sequence information” (DSI) is essential for developing new medicines and vaccines. Any new system should not introduce further conditions on how scientists access such data and add to a complex web of regulation, taxation and other obligations for the whole R&D ecosystem – including on academia and biotech companies.”^xii (Note that academia is exempt under the guidelines.) In contrast, the Convention for Biological Diversity (CBD) heralded this agreement as “a historic decision of global importance”.^xiii This mechanism is likely to affect pharmaceutical, nutraceuticals, cosmetics, biotechnology, animal and plant breeding and other related industries which benefit from DSI.

Under the agreed guidelines, entities benefiting commercially from DSI uses should contribute to “the Cali Fund,” The draft decision defines entities as which on their balance sheet dates exceed at least two out of three of these thresholds (total assets: USD 20 million sales; USD 50 million; profit: USD 5 million) averaged over the preceding three years, should contribute to the global fund one percent of their profits or 0.1 percent of their revenue, as an indicative rate. (Note the use of the word ‘should’ implies this is a voluntary scheme.) At least half of the funding is expected to support the self-identified needs of indigenous peoples and local communities (IPLC) through government or by direct payments through institutions identified by indigenous peoples and local communities. Exempt from such payments are academic, public research institutions and other entities using DSI but not directly benefiting. On a related subject, but likely to receive limited headlines was new, voluntary guidance on assessing the risks posed by living modified organisms (LMOs) containing engineered gene drives. This guidance aims to improve international biosafety management and increase scientific rigo”.r and transparency of risk assessment procedures. There was also an agreement for an expert group to guide identification of synthetic biology’s potential benefits and review the potential impacts of recent technological developments. See Planet Tracker’s “Long AI, Short Nature: Close the Short”.

There was no agreement reached on how to fund the deficit for global biodiversity initiatives by 2030. As negotiations overran the allotted time, the COP became inquorate. The CBD stated that Parties at COP 16 “will resume at a later date and venue to complete the agenda”.^xiv Nor was there a decision on a new dedicated global financing instrument for biodiversity to receive, disburse, mobilize and articulate funding needs.

Planet Tracker believes that the importance of the insurance industry warranted even more attention. Insurance companies are vital to the financial system because they are large investors in financial markets, because they provide important links with banks, and because insurers safeguard financial stability by insuring risks. Changes in climate and nature are highly relevant to risk controls, and therefore the global capital markets.

Nature transition plans

The nature community has never been too proud to learn from its climate change predecessors. And so it is with nature transition plans, especially because of the climate/nature overlap. With agriculture, forestry, and land-use change accounting for nearly one-quarter of global greenhouse gas emissions, and it also being the largest driver of nature loss – which has seen a 73% average fall in species population numbers between 1970-2020^xv – releasing a strategy with actionable steps to achieve science-based nature targets, as with climate, appears a required ask from financial institutions.

And there are transition plan outlines readily available or in the consultation process. In November 2023, Business for Nature published ‘Now for Nature’ which outlined high-level business actions on nature.^xvi At the beginning of 2024, WWF recommended integrating nature into climate plans as well as integrating nature positive objectives in supports of transition planning.^xvii At COP16, the Taskforce on Nature Related Financial Disclosures (TNFD)^xviii released its discussion paper on nature transition plans and so did the Glasgow Financial Alliance for Net Zero (GFANZ).^xix CDP published a useful paper at COP16, which summarises nature strategies and transition plans, providing a brief overview of each one.^xx Further assistance is available from the Science Based Targets Network (SBTN) which set the first corporate science-based targets for nature. At COP16, the first three firms announced validated science-based targets for nature – GSK [GSK], Kering [KER] and Holcim [HOLN].^xxi WBCSD is helping companies on nature positive journeys by providing guidance for credible business actions for specific value chains.^xxii And if that is not enough, expect more nature transition plan assistance from both WWF and World Economic Forum before the year-end.

Oceans in the mix

Planet Tracker was pleased to see an increased focus on oceans. Work on protecting ecologically or biologically significant marine areas (EBSAs) began in 2010 but was stopped for more than 8 years due to legal and political concerns. At COP16, new mechanisms to identify new EBSAs and update existing ones, was agreed. This will ensure that the cataloguing of information of these areas can support planning and management with the most advanced science available.^xxiii This is an important part of the implementation of the 30×30 protected areas target^xxiv and to prepare for the future implementation of the new agreement for marine biodiversity beyond national jurisdiction.

Government policy – where does nature fit in?

While corporates and financial institutions discuss who should oversee nature responsibilities, it is the same for governments. (Note that some corporates have appointed Nature Officers – see the Nature Scorecard). Should nature issues be overseen by environmental departments, or perhaps climate or land-use ones? What was often repeated in discussions was that finance ministries need to be convinced as do those officials responsible for agriculture, fisheries & farming. Unsurprisingly, many argued for a holistic approach, mainstreamed in all government departments and central banks; certainly, this would be ideal, but the hardest to achieve.

Governments are struggling to sort out this issue as they compile national biodiversity strategy and action plans (NBSAPs). Is this one possible reason for the disappointing number of NBSAPs submitted before COP16. To date 44 Countries (out of 196) have submitted their NBSAP. In line with the Global Biodiversity Framework (GBF), countries that were “not in a position” to meet the deadline to submit NBSAPs ahead of COP16 were requested to instead submit national targets. These submissions simply set down biodiversity targets that countries will aim for without an accompanying plan for how they will be achieved. By the end of COP16, some 119 parties had published some national targets. ^xxv

Nature data – overwhelming?

The refrain that there is not enough data on nature and biodiversity was debunked many times at COP16. There are various methods for collecting this data, including remote sensing & camera trapping, environmental DNA (eDNA), bioacoustics, and satellite imagery. And technology is helping to make these collection methods more precise. For example, satellite imagery is able to analyse data in 10cm squares. The European Space Agency is making biodiversity data a priority for 2025.^xxvi As more data collection methods are invented, they become cheaper. For example, insects and pollinators can be monitored by using a device which uses low cost 2G, powered by solar, costing around USD 250 device.^xxvii eDNA is also proving particularly versatile in both aquatic and terrestrial environments, and to a lesser extent in air.^xxviii However, it is becoming increasingly clear that despite improved collection methods, no single process is completely reliable. The combination of satellite data with ground-based analysis, on the other hand, looks very promising.

There appear to be two main problems with biodiversity data. Firstly, there is an apparent backlog in the processing and analysing of these vast data sets. Are we being overwhelmed with biodiversity data maybe a more relevant question; will AI provide quicker insights? Secondly, the standardisation of nature data is a challenge. The frequent comparison with climate metrics has built up an expectation of a single measure – i.e. equivalent to 1.5°C of warming – using a single unit of measurement – i.e. CO₂e – across the globe. Nature and biodiversity are unlikely to be condensed into one unit of measure – e.g. species or ecosystem health or habitat quality – across all the world’s biomes. But that does not mean that an improvement of nature in a variety of ecosystems cannot be measured and achieved.

The rise and rise of social considerations

Receiving considerable airtime at COP16 were the rights of indigenous peoples and local communities (IPLC). According to the 2018 Colombian census, there are 1.9 million individuals belonging to 115 different indigenous groups in the country. Expect more focus on these rights when the 2025 climate COP (COP30) takes place in Belém, Brazil. Brazil is home to 266 indigenous peoples with a population of 1,693,535 people, or approximately 0.83% of the total Brazilian population.^xxix

At COP16, a new programme (Article 8[j]) was agreed that sets out specific tasks to ensure the meaningful contribution of IPLC towards the three objectives of the Convention – conservation of biodiversity, sustainable use of biodiversity, and fair and equitable sharing of benefits. In this programme, rights, contributions and traditional knowledge of indigenous peoples and local communities are further embedded in the global agenda. A new Subsidiary Body is expected to elevate issues related to the implementation of Article 8j and enhance the engagement and participation of indigenous peoples and local communities in all convention processes.^xxx

Until next time

The COP16 convention was not officially closed, so further progress is possible to try and resolve the outstanding funding issues prior to the next CBD COP. Astrid Schomaker, Executive Secretary, Convention on Biological Diversity stated, “It will resume at a later date and venue to complete the agenda”.^xxxi Armenia was elected as the host of COP 17, to be held in 2026.

Memorable quotes from sessions attended

“The present economy is a bioeconomy as it is reliant on nature. But today’s bioeconomy is nature negative which means it is not sustainable. We need a new bioeconomy.” (Marco Lambertini, Convener, Nature Positive Initiative)

“We are eating the planet that feeds us. What kind of fertiliser do you wish to be for the planet?” (Indigenous leader at TNFD Adopter event)

“The present economic system incentivises nature negative policies by encouraging the likes of deforestation and overfishing, promoted by subsidies.” (Tony Goldner, Executive Director, TNFD)

“It is not a coincidence that the slowest rates of deforestation in Brazil are those inhabited by indigenous communities.” (Ceiça Pitaguary, National Secretary for Environmental and Indigenous Territorial Management, Ministry of Indigenous Peoples, Brazil)

“Presently nature data is roughly five years behind climate data.” (Christian O’Dwyer, Sustainable Finance Solutions Product Manager [Nature & Biodiversity])

“The Amazon is not just the lungs of the planet, but also its heart as it is the centre of the hydrological climate system.” (Atossa Soltani, Amazon Sacred Headwaters Alliance)

“When developing land restoration projects, the problem is not the solutions but the scaling.” (Daan Groot, Managing Director, Nature^Squared)

“The OECD has seen a doubling of biodiversity–related financing between 2017-2022, mainly from multi-lateral banks.” (Kumi Kitamori, Deputy Director, Environmental Directorate, OECD)

“Between 1992 and 2014, while produced capital per person doubled and human capital per person increased by about 13%, the stock of natural capital per person declined by nearly 40%” – The Interim Report of the Expert Review on Debt, Nature & Climate: Tackling the Vicious Circle

“We know what the problem is.” Susana Muhamad, Colombian Environment Minister and COP16 President

“Nature does not stand alone.” Executive Director of the United Nations Environment Programme