Engaging for Biodiversity – How to encourage issuers to transition away from negative impact?

At Building Bridges, a Chatham-House-rules workshop was hosted to brainstorm how to encourage improvement through targeted discussions among stakeholders. Discussion tables were split by topic, including corporate engagement, regulation, emerging markets, credits, biodiversity standards and scaling up start up solutions – and their perspectives are fascinating to say the least

Speakers

The workshop began by introducing the fact that the systemic ‘wicked’ problems that plague our world today intertwine, especially with biodiversity being taken into consideration. For example, the extraction of ores and minerals is necessary for the proliferation of clean energy sources in the energy transition, however often counteracts the preservation and promotion of biodiversity. 

Furthermore, the speakers highlighted how biodiversity loss is exacerbated by the linearity of the capitalist model, where corporations exploit under the presumption of endless economic gain. The model neglects the need to address the detrimental effects of biodiversity loss and the need to work within planetary and humanitarian boundaries. On top of that, capitalism’s overreliance on exploitation often leads to societal, environmental, and even economic vulnerability and uncertainty.

In order to stray away from capitalism, speakers emphasised the importance of stewarding and allocating capital from corporate finance in order to further accelerate the transition to biodiverse and sustainable economic models – and although things are moving in the right direction, we are not moving fast enough.

Global biodiversity funding has faced shortcomings, especially in COP15 through the Global Biodiversity Framework (GBF). The framework failed due to an overdependence on greenwashing private sectors, inadequate accountability, and the unambitious $20B per annum capital mobilisation goal to bridge the $700B biodiversity-finance gap.

To combat the drivers of biodiversity loss, speakers suggested 3 points for efficiency and impact. These points were science that relies on millions of data points, expertise for actionable endeavour translation, and collaborative initiative with an ecosystem-integrity approach.

Speakers even suggested completely replacing the current economic model for a model that relies on circularity – servitization. Servitization values value creation over maximising sales volume, operating under the idea of products as a service (PaaS). Through servitization, products would not only be fully reused, however would have a circularity index exceeding 1 by providing profit for biodiversity regeneration. However, speakers still viewed the stimulation for transformative change as reliant on providing the consumer with the inevitable choice of sustainable alternatives

In consideration of all that, speakers moved to the perspectives of those who attended the workshop in order to get to the deeper question: how to encourage issuers to transition away from negative impact. Splitting the room into 8 distinct groups, each group was tasked with answering a different aspect of the overarching question.

Perspectives

In order to do this, attendees suggested creating a catalogue to facilitate the interaction between nature positive startups, products, investors, and larger corporate entities in which COP rights would be highlighted for each individual startup. This would permit smaller enterprises to outreach and collaborate with larger enterprises to reach their goals and scale their solutions. However, fears of these enterprises being viewed as ‘charities’ were expressed.

The wording of ‘ensuring biodiversity’ raised a plethora of problems among attendees as well. Biodiversity is a notoriously difficult idea to define, and even when defined, how do you ensure that investment into biodiversity does not impede on both ROI and other forms of socioeconomic gain? Participants suggested ‘biodiversity units’ as measurement, in which a biodiversity unit as 1 hectare of biodiverse land for 30 days.

ESG data is extremely important in the transition to encouraging issuers to move away from negative impact, however this ESG data remains unstandardised and regulatory. Making ESG data collection mandatory and standardised would convince companies to collect their data in a particular manner that allows their data to be benchmarkable and unbiased.

Moreover, attendees highlighted the essential support investors need. Helping them understand the risk of their leverage, considering not only the restorative justice of biodiversity investment but also the social, and providing metrics to allow for system simplification and investors to better understand what they are investing in are all important in order to promote engagement that is not bilateral but rather collective. Turning jargon into clear goals mobilises private capital.

This engagement should not be limited to investors but should involve any stakeholder in the biodiversity loss crisis, including indigenous communities. Indigenous communities are often misrepresented as only 2.1% of the historic $1.7 billion UN climate pledge funding directly goes to them.

In parting words, participants further called upon the government to do more vis-a-vis mandatory regulation and data collection. Attendees highlighted the incentive for corporates to perform under a ‘minimum-compliance’ mindset, so tightening regulation and defining biodiversity would prove impactful. However, this regulatory burden should not impede on solution building.

The workshop highlighted the importance of engagement, simplification, and stakeholder recognition in the transitition to a greener economy.

source featured image: https://smb.telkomuniversity.ac.id/cerita-telutizen/tren-green-economy-informasi-dan-prospek-kerjanya/