Hi. I'm Helen Avery with the green
Finance Institute and you're listening to the final episode
in our cop, 27, special series of financing nature with the
United Nations environment program.
In this episode. I'll be joined by Susan, Gardner
director of the Ecosystems division at unep and Evo Moulder
head of the climate Finance unit in Susan's team.
And we're going to be recapping where we are in terms of the
finance, gap, for nature, and the actions.
We need to see it. Cop 27.
Hello, and welcome and thank you for joining me for this final
episode in this short series of financing nature as we lead up
to cop 27 in partnership with the UN environment program.
It has been Quite a ride from bonds to venture capital.
We've tackled deforestation in Latin America, regenerative
business Investments, like those happening in Kenya and in
Volcanoes National Park in Rwanda.
We've learned about the role king crabs play in stemming the
loss of coral, reefs, in mesoamerica.
And we've also learned about sustainable business models for
Commodities like rubber in. Indonesia, there have been
really clear messages about the need for more Innovative
financing including the role of Guarantees and Blended finance
and the need for us all to listen, more to the experiences
and needs of developing economies, many of which are
showing that nature and economic growth and resilience go hand in
hand but we're not finished yet today.
For this wrap-up episode Jessica may not be with me but I'll be
joined by un colleagues. The wonderful Susan Gardner
director of the ecosystems division at the UN environment
program and Evo Mulder head of the climate.
It's unit in Susan's. Team will be hearing their views
on the actions. We need to come out of the cop
27 meetings that begin Sunday, the 6th of November.
So with that very long lead in, let's bring our guests on.
Well, thank you so much for joining us today, Susan an ebow,
it's a real pleasure to see you in what is the very busy period?
I'm sure nice to talk to you. Thanks a lot.
Hello. Nice to talk to you.
So now we're a few days out and it would just be really great to
hear from each of you on sort of what your affections are for the
next few weeks at what's really at stake at cop 27, when it
comes to Nature and find out, so Susan, I wonder that's come to
you. If you could, if you could get
us going, that's certainly Helen.
You know, I think that as countries get ready to arrive to
show more Shake, I think there's a real recognition that it's now
or never last year, a cop 26, there was so many important
highlights. So many pledges that came
forward. A lot of very strong pledges
from the private sector, for example.
But this year, the whole headline of this cop is about
delivering for people and planet and we can see every day that
we're in an era where We're we're experiencing
climate-induced disasters daily. So there's real Clarity that we
need to shift the game, we need to do it.
Now we have to move from the great pledges that we have two
action on those pledges and as the Director of the ecosystems
division at unit, my role is to support countries in investing
in nature for people for the sustainable development, in
their countries because nature based Solutions particular for
I'm at changed. They have so much potential in a
cost-effective way to advance, both climate mitigation and
climate adaptation while at the same time, having all these
other co-benefits so helping to protect and preserve
biodiversity reducing land, degradation supporting people
and livelihoods. One thing that's fake is to
really Unleash the Power of Nature and to do it in a way
where it's in addition to Rapid serious, extensive Of
decarbonization both going forward.
So that leaders can ensure that we're advancing.
Both of these tools, both of these powerful approaches at the
same time. Eve.
Oh, I'm sure you will say feel this sense of urgency.
Thanks a lot Helen. So I mean to complement, Susan,
I think the basic message is that time is up.
So what is at stake? I think what people have seen
this year in Europe is Rivers drying up.
Good good not be delivered. Two factories, some shops being
empty. The Yangtze river in.
China running dry. We've also factories and power
plants. Basically have to shut down.
There was a major I shelf in East and other car, the Congo, a
shelf, that collapsed and lots. And lots of course of Doom and
Gloom messaging, but that is, is simply the result of the
inadequate action that we've taken.
So, we're basically staring in the headlight of a truck and we
see I'm paralyzed about treating it as the crisis that it really
is. So my first point is that time
is up the second. Is that a lot of countries have
made pledges around providing a hundred billion dollars a year
to developing countries and as the o.c. is Quantified only 83
billion was transferred both in Grants and concessional
financing and Loans to developing country governments
in 2020. So there's a hundred billion
dollar pledge. Something that is and will be on
the table. A lot of development Finance
institutions and mdbs have made a nature pledge at cop 26 in
Glasgow and so fast forward, 12 months from now after the lights
were turned off and the champagne was running dry.
My question to them is what if you're done?
Because for a lot of mdbs nature Finance represents either
non-existing or tiny percentage of their balance sheet so
they'll have to get real on this.
And for all guests come companies and and force a hard
to evade sectors, they cannot see investing in nature as a as
a way of not continuing business.
As usual, we will have to face out investments in coal or gas
as soon as possible, and that can include investing in nature
as part of the solutions, but it's not about investing a few
hundred million dollars to protect forests while at the
same time. Keep on investing, billions of
dollars in exploring your own gas reserves.
So that is basically what's at stake at cop 27 in my view,
obviously the sense of urgency is really, really heightened you
both with clarified that it's terrifying.
And so this cop is really like, how do we get the money moving?
As you mentioned, there have been lots of pledges and
commitments but you are we actually moving the money.
How much money do we need to get moving?
What's the total Finance Gap? Well, as it stands right now,
clearly were underperforming globally in terms of investing
and opportunities to utilize nature for climate by 2030, the
state of Finance for nature report indicates that we need to
at least triple investments in nature based Solutions.
If we want to keep global warming below 2 degrees.
And I mean, if you look at the numbers, it's very clear right
now. There's only about a little over
150 billion dollars per year. That's The finance going towards
nature based Solutions. But that's less than half of
what we actually need which is more around, 370 billion per
year by 2030, this needs to increase to four hundred and
thirty billion dollars a year. So we're behind Investments need
to increase at least twelve percent every year and
immediately for so long. We've been talking about why we
need to do this. We've been making the case,
we're all very fluent and making the case.
For the risks and those impacts climate change and the science
is clear but now we really have to focus on how we do it and
that is about bridging that Finance Gap.
We can look at doing this by really quantifying the public
and private Capital flows that are needed for investing in
nature based Solutions and draw that road map.
That helps us to achieve that full potential.
At the same time, we could do that again.
We Able to get all these other benefits were able to reduce
biodiversity loss. Were able to actually restore
close to a billion actors of degraded land and we can do it
in a way that is consistent with just transitions.
So so all of these benefits that we get from bridging this
Finance Gap or added to the essential need to do this
quickly and now for mitigation and adaptation goals.
So coming to you Eva, we have These huge Finance cap, we can't
rely only on governments. We've had a lot throughout this
podcast series that keto savonia pointed out that 70% of funding
for Africa, conservation comes from governments.
It's just not going to be sustainable.
Is it so what are your thoughts about where, how we're going to
get private sector, Capital moving?
Yeah. - Susan highlighted, the state of financial nature report
basically says me to more than double investments in nature in
the next three years. That is of course a huge
challenge that we have in front of us.
But given the levels of indebtedness of of governments
especially in developing countries but also in developed
countries, as you said Helen the majority of money will have to
come from private Finance. I already talked about the
multilateral development bank's and development Finance
institutions. So one way how this could be
done is for mdbs and DF is to use their balance sheet and more
flexible manners, including taking More risk, providing more
concessional Finance to crowd in private Finance.
First of all, second is that a lot of companies have made
pledges to basically stop an end deforestation or half
deforestation by 2020 and ended all together by 2030.
Concrete example, is the SOS Cerrado Manifesto?
Where 160 consumer goods companies and Supermarket.
Chains have committed to not Source or from areas that were
deforested. It unep recently supported a soy
Finance scheme in Brazil called the responsible Commodities
facility. And after speaking to all these
160 companies, only three of them came forward, Tesco
Sainsbury's, and waitrose they put in 11 million, u.s. dollars
into it. Obviously, in Phase 2.
We hope that this will go to 100 million plus, but if you take
into account that the soy Market itself is between 25 and 30,
Million u.s. dollars than 11 million dollars is dropping the
ocean. So my question is, what are the
other 157 companies doing that have made the pledge?
Are they walking the talk? And if not, I would say the time
of voluntary commitments, without a Time, bound roadmap is
simply not possible anymore. That is unacceptable.
Companies need to realize that they cannot make these kind of
commitments. And the kind of transition a
zero cost is should see it as a kind of Of a research and
development phase to transition to more sustainable business
models. And even if it would be at the
expense of the bottom line for a number of years, that is
something that will have to be accepted.
At the same time, not all the cost and risk can be borne by by
private companies. And this is also where both
governments and also multilateral, development Banks,
should take away some of the risk in a form of guarantees
grants and concessional Loans, in equity.
And this is Aware. I think they can help completely
help transition the private sector.
Soon as possible way from say in nature - climate - business
model towards a NetZero nature post.
I mean some of this isn't new is that we've been talking about
private sector stepping up for a while.
Now we've been talking about Blended finance and these
guarantees and de-risking for four decades.
Little Berry climate Finance. Now we're talking about nature
finance and what are your thoughts Susan around how we
Close this Finance Gap. Well, it's clear.
It's going to take. Take more ambition as you go
with saying it's going to take transparency and accountability.
The secretary-general just recently also called for that
holding private sector to account for really delivering on
pledges and delivering of this ambition.
And there's concrete things we can do to help to ensure that we
have financial institutions, businesses and policy makers all
working together for example, have A clear goal for finance
and finance for nature. Specifically, is one way to
ensure that we're all aligned on a vision and a common ambition?
We can also leverage voluntary, private Finance initiatives by
making sure that Public Finance is strategically delivered, to
incentivize, private Finance, to shift towards Investments, that
have a positive impact on nature.
For example, repurposing. And subsidies has been discussed
a lot if we look at subsidies that are harmful for nature.
There's probably right now somewhere around 500 billion to
a trillion per year globally. And these are things like
subsidies for you know, Fisheries or agriculture, fossil
fuels, this is several times greater than all public and
private investment right now in nature based Solutions.
So if we can get the right incentives in place and could
actually start to see an expansion, And standardization
in nature positive, finance and begin to close that Gap.
It means that domestically we have to invest more in nature
positive, sectors. It also means having for
coherence of policy and a demanding that that coherence is
there in lending operations of multilateral, development Banks,
and making sure that all of these actions are consistent
with the Paris agreement, which will also, you know, meet Global
goals on biodiversity and land. Aggregation neutrality there's
been recent studies of 12,000 different funds that represents
over 20 trillion US dollars of assets under management and only
about 11% were aligned with the Paris agreement to stay within
two degrees temperature increase.
So that shows how much more progress we need in terms of
coherency there under the Glasgow financials?
A net zero. There was more than 450
financial institutions that represent about 130 trillion
dollars in private Capital that have announced commitments to
Net Zero by 2050. So we have a lot of reason to
believe that we're moving in the right direction.
We can do this but we have to make sure that we're creating
and expanding the results based financing scheme.
So we include that transparency and accountability.
There's a one of the vital element elements is that we have
the right economic value of carbon so that it can drive
commodity Supply chains to be more sustainable.
And so having that pricing is especially important in areas
like the tropics. So one of the key factors is
making sure that carbon pricing is part of the solution to help
reorient Capital flows towards environmentally and socially
sustainable approaches. I was recently at a conference
with a room of asset managers and financial institutions.
And their question was put forward, I will be the biggest
driver for financing for nature and it was pressing around
carbon markets. So Evo coming to you mean you
mentioned a couple of specifics are around public sector D
risking the use of guarantees, any thoughts yourself and how we
how we close the finance Gap? I mean one meeting that is
coming. Of course, in the next few days
is cop 27. And in Sharm el-sheikh, another
important meeting that is around.
The corner is the second part of cop15 in Montreal where
hopefully governments agree on a ambitious, Global biodiversity
framework. You can see it as the nature
equivalent of the Paris agreement, and this is exactly
what we need, at least for governments to hardwire.
Those ambitious Targets in a global treaty, and Dele also
move towards National legislation around it so that it
becomes legally binding as well. Think the second point is for
Rich Nations to finally live up to the promise of delivering a
hundred billion dollars per year to developing countries, both to
adapt to climate change, and of course also help to mitigate
emissions. It was quite interesting when
Joe Biden came in office, he calls for a climate Summit and I
joined as a as one of the listeners and most of the heads
of state from developing countries were calling for a
debt restructuring or debt forgiveness.
And so given the levels of economic impact from the covid
prizes, the recent increase in food prices and energy prices.
I think that for nature swaps that for climate swaps is
something that I would expect will be on the Jenna of cop 27.
And again I think both multilateral development bank's
and development Finance institutions, have a key role to
play here. My last point is that the
private sector will have to put their money where their mouth
is. As I said before, a lot of
pledges were made it, not that you can sort of have your cake
and eat it. If you make some promises, then
you need a Time bound roadmap to to deliver on that.
It's not just about drinking champagne.
And And in whether or not you live up to this, it is about
actually making it happen. Who what we haven't talked about
this series? However, is systemic change.
I think, you know, we've discussed we absolutely must get
Capital flowing now into nature based Solutions and restoration
But ultimately the goal is surely to have Nature's value
embedded in our economic. And financial systems, this
shift to Nature positive economy that we often discuss.
And given these two cops are so close together and the
conversation feels really ripe around biodiversity loss at the
moment and the urgency to move money towards it.
Is this the moment? Do you think we're that
conversation will start to take more shape?
Yeah, I think this is the moment and I think it's about the way
we value and treat nature. That we can begin to recognize
it as something that's indispensable that's key to our
own Survival that that's just recognized and understood that
we begin to see for example, a forest as its value, being not
just in the price sold for lumber.
But in fact understanding the true value is the services that
an intact ecosystem, can provide the livelihoods for the
communities, the food, the water stability, all of those things.
All of Services that those ecosystems provide.
So it requires a real mindset shift.
If we begin to see politicians heads of state businesses,
financial institutions, and you know, individual citizens.
Starting to have a change in their mindset where they want to
work with nature, have the benefits of nature rather than
continuing to wage a war of nature.
We can really begin to see the political will shift.
We can see. The Regulatory and economic
incentives, that would be necessary to really underpin a
fundamental redirection. And we know that we can do this,
we've seen great examples, we have a lot of information and we
see the momentum building and we have examples like the task
force on nature related Financial disclosures, which is
a great tool to facilitate reporting on the risks as they
relate to Nature shifting. Finance from A true negative
towards nature positive. We've seen this can happen in
other ways and the climate space where for example,
climate-related disclosures or now just widely adopted
worldwide with industry and increasingly.
We're seeing them and Regulatory Frameworks is requirements.
I think another area where we have to really look closely is
our Reliance on systems of national accounting like GDP
that don't include any measure of the impacts of Activities on
nature and don't recognize the dependencies of our economies on
nature. Nor the economic costs of
collapse of Nature and ecosystem services.
So we know we have better systems in place than that.
We know that we can actually include statistics, that show
the conditions of ecosystems and the show the importance of the
services that ecosystems provide quantitatively and economically.
You know, I do believe that this, not wishful thinking that,
Actually can become the norm and show a better pathway forward.
Is that fantastic reminder? A sheet the system of
environmental economics accounting, ecosystem
accounting. That it's a bit of a work about
fall but something I think we don't talk about enough and
certainly the moment we're in developed, economies thinking
about D growth, it's probably something we should all be
looking at bit more how we review GDP, even what are your
thoughts, building on what Susan?
Mentioned in terms of the systemic changes that are
needed. I mean, you see the EU moving
at, for example, with the law on tackling tropical deforestation,
this would prohibit the import of seven Commodities that are
linked to deforestation from entering the EU if they came
from deforested area. So, whereas in the past it would
be based on an ask to do it very soon.
We'll see a law basically requiring for this to be done as
Susan mentioned. First, it seems we focus on on
climate, then we focus on nature.
So there's of course, the task force on climate related.
Financial disclosure. Switzerland has moved ahead to
make that a law on the task force, for nature related
Financial disclosure, I co-founded the predecessor, the
national capital Finance Alliance, and I very much
advocated for a hardwiring of nature, dependency and impact in
business decisions. And then in the way the
financial Actor, assesses and prices risk related to to made
nature impact. So it's good to see this this
coming and perhaps a third sort of systemic issue.
Also beyond the need for repurposing.
Agricultural policies is around trate.
Trate is a very big important part of the global economy.
It was interesting that recently Indonesia.
And so, it's an agreed on a new Trade Agreement where tariff
reductions are linked to force protections.
So it gives direct incentive to basically Export Commodities is
f in producing sustainable way. Thereby also provided
much-needed incentives for farmers and producers and
processes to put this in place because this is an often hurt
and and I think very valid complaint by a lot of developing
countries, they say you want us to produce sustainably but who's
going to pay for it and then of course, it cannot be.
That those who make very little money are in the end on the
Frontline of being asked, not to come.
Cut down the forest. While a consumer in a rich
nation. Is basically benefiting from the
cheapest price possible for that same commodity.
Yeah, so wrapping up and it's a big question to wrap up on is
we've heard from both of you that there's this, we need
greater ambition, we've heard from our guests, that there is a
nervousness that the ambition may be diluted certainly since
cop last year because of multiple crises including a war.
Economic pressures that we're seeing across the globe at the
moment. I mean, how can we collectively
keep that ambition high at cop 27 and Indies or moving forward
with that? Momentum into copper 15 Susan,
there shouldn't be nervousness. No one should be taking this
lightly as a global Community. We have to accept that we're out
of time as we were saying earlier and, you know, we're out
of excuses as well. We know what we need to do and
we're reminded every day by devastating disasters and eat.
Each one reminds us in quantitative economic terms as
well as human life. That the cost of inaction, far
exceeds the cost of action. So to do this in a credible way,
we just have to keep up the ambition and we have to
collaborate across sectors across borders.
We need everybody, we need all hands on deck.
The state of Finance for an engaging report calls, for more
financial institutions and businesses to be part of the
solution. So that We can accelerate
together investors developers. Those that design.
The market infrastructure. Also, the public is consumers,
all of us together, creating a market with new sources of
revenue for nature based solutions that increases the
resilience American of our economies, but also increases
the resilience and the prosperity for our future.
So, yeah, it's good that we're not taking this lightly.
We need to be very clear that now is the moment.
But for action really great Point Season.
As you say, we all know what needs to be done and the time
for excuses is over and also the time for you know keeping
discussions around economic risk and growth climate and nature
separate. Feels like it's over to.
But evoke over to you for closing remarks here today.
What's your hope for cock 27 and how do you think we keep that
ambition? Hi.
Well, I think it's never a good time.
For change. I mean, people could easily
point to the war that's happening in Ukraine or the high
inflation that you see in other countries as an excuse, not to
act. But the way how the human brain
is is wired, is that if things are good people say things are
great. So why change?
And if things are bad people say, it's not a good moment.
So come back, when things are good.
So it's never the right time. But as Susan said, we're running
out of excuses and If we did, what we, what if we do, what we
did, we get what we got and and where did that leave us?
Basically a planet that's on track of a free point, two to
three point. Nine degree warming.
We see what kind of destructive already seeing at the one point,
one degree warming when you only have to apply your imagination
to see what the world would look like, what.
It also looks like, is the unraveling of the fabric of life
and, of course, more than 1 billion hectares of the graded
land. So, as Susan said, Run out of
excuses and time is up. It's changed possible?
Yes, it is to give you two examples, so Costa Rica made a
conscious decision back in the 80s when most of its forests
were depleted to apply fuel tax where they use the revenue to
incentivize reforestation. And they basically move from a
forest cover of only 21 percent in 1987 to 52 percent in 2010
beyond the fuel taxi, of course, also need other kinds of
Instruments, including deaf nature swaps funding by the
World Bank by the UN the green climate fund, but it shows that
if you have political will you can actually make it happen in
Denmark about half of the domestic energy.
Production is coming from renewable energy.
One of the biggest companies in the past was called our state
and our said basically phased out its fossil fuel assets, in
only a matter of 45 years and it's now the biggest Renewable
energy producer in Denmark, with about six, gigawatts of
installed capacity, Denmark. The Danish government is
investing into what they call Energy Islands.
These are the kinds of Investments that in the past,
you would never have seen for, say renewable energy production,
and we need that same kind of mentality for investing in
force, protection, and ocean Health as well.
And I think I think human Ingenuity is endless, the time,
basically is very limited. And it's not an impossibility.
I think human brain. If it realizes that we need to
act is something we can. I think we've proven that it's
happening and buy some companies by some countries, it simply
needs to become the norm and not the exception.
As, as Susan mentioned. We are cutting it, fine.
I think is, is the message I'm getting its, there's still time,
but not much of it. And will thank you both so much
for giving us time today. I know it's incredibly busy.
That you have indeed up to this very important conference.
Thank you both so much. Thank you Helen.
Thank you for having the series of conversations about such an
important topic right now. Yeah, thanks Susan, and thanks
Helen. Well, that is it from us today?
And from our cop, 27 special series with the UN environment
program. I hope you enjoyed it as much as
me and have found these episodes.
Really helpful in informing your own messaging.
As we go into cop 27, it's imperative that we sequester
carbon and nature offers us that tool when its operating at full
capacity, it's essential, we start to adapt to the inevitable
increase in global warming and nature.
Again provides a solution from economic resilience, to
individual health and well-being.
Nature is our Ally and it's time.
We invested in her. As I will know, I'm preaching to
the converted and it's worth me saying that many of the examples
mentioned in. Theories are written up as case
studies on GFI Hive. If you don't know how to find
it, that's www.greenapple.co.nz /g fi Hive do reach out on
LinkedIn to Jessica and myself. If you're heading to cop, 27 and
share your messages around nature and finance over the two
weeks of the conference, we'd love to hear them.
And here at financing nature, we're going to be taking a bit
of a break for a few weeks, while it all happens.
But I will be back in December for a two-part.
Special for cop15 its conference season and we're going to have
some really well-known names. Join us for those episodes and
I'm super excited about it and looking forward to sharing that
with you and then next year will return to a steady drumbeat of
interviews with inspiring guests who are working across finance
and nature to help turn the tide on biodiversity loss and move us
into a nature positive global economy.
If I still have you thank you very much for listening and
supporting the series until December I hope you stay well.
Well, and stay in touch. See you then.