And not before time. It is now widely acknowledged that biodiversity loss is as great a challenge to our world as the climate crisis.
Today, up to one million of eight million known species in the world are at risk of extinction and average species population sizes fell by 68 per cent between 1970 and 2016.
According to their global study of nature, the Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES) says that human activity has “severely altered” 75 per cent of terrestrial environments and there has been a 47 per cent decline in global indicators of ecosystem extent and condition against their estimated natural baselines.
I could go on.
The implications of biodiversity degradation are far-reaching. Our economies and societies are deeply embedded in nature, rather than existing alongside it. Biodiversity of our natural world is our own life support system through ecosystem services it enables and sustains. The water cycle, clean air and the provision of food are fundamental to all life on earth.
Many medicines, especially anti-infectives and anti-cancer agents, originate from plants, fungi or bacteria.
But there is another factor to biodiversity that is often overlooked. And that is the astonishing economic benefits we derive from a healthy and thriving biodiverse planet.
Evidence has been growing that shows habitat conservation generates more economic benefits than habitat conversion, such as clearing rainforests for farm use.
The UN Environment Programme states that for every dollar spent on nature restoration, at least $9 leads to economic benefits. The Food and Land Use (FOLU) Coalition says that changing agricultural and food production methods could unlock $4.5 trillion per year in new business opportunities by 2030, while also preventing trillions of dollars’ worth of social and environmental harms.
According to a report on ConservationTools.org by the Pennsylvania Land Trust Association, the overall benefit: cost ratio of an effective global program for the conservation of remaining wild nature is at least 100:1.
There is no more obvious case for investment that offers both the opportunity for sustainable wealth creation and for contributing to building a better future for our planet. As investors, we have both a responsibility and an opportunity to help halt and – where possible – reverse biodiversity loss.
Which is why we just launched a Biodiversity Strategy in collaboration with the Natural History Museum in London of which – full disclosure – I am honoured to be an ambassador. Drawing on extraordinary insights from its Biodiversity Intactness Index and the work of [over 150] biodiversity researchers and data scientists, we hope to establish a bridge between observed biodiversity impacts, and the products and services that investment companies enable.
As investors, we can go further through active engagement with companies. Through our own stewardship activities, we are calling upon companies to commit to net-positive impact on biodiversity throughout their operations and supply chains.
But the investment industry alone cannot solve the biodiversity crisis, much like it cannot solve the climate crisis. That is why gatherings like COP 15 are so important.
It was encouraging to see biodiversity take centre stage at COP 26 in Glasgow last year, where more than 100 global leaders made a commitment to halt deforestation. The 100 nations that signed the pledge represent 85 per cent of the world’s forests.
COP 15, which held its first part virtually in October, sees global governments come together to sign up to a post-2020 Global Biodiversity Framework, which aims to reverse the current loss of biodiversity and ensure that biodiversity is put on a path to recovery by 2030. The second part of the meeting later hopes to accelerate global actions against climate change and biodiversity loss.
I would like to see central banks step up here as well. I concur fully with those asking them to recognise biodiversity loss as a potential source of economic and financial risk, and commit to developing a response strategy.
In a world where geopolitics has come to dominate the news agenda – and all our thoughts – I hope we also retain the focus on heading off both the biodiversity and climate crises.
We have come a long way in tackling the climate challenge but only now are we really seeing a wider move to tackle our many biodiversity issues. An awful lot more needs to be done on both if we are to overcome the worst of their consequences.
Saker Nusseibeh, CBE, CEO, Federated Hermes