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Speaker 1: This is Dana Perkins and you're listening to Switched on

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Speaker 1: the BNAF podcast, and today we're going to talk about COP,

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Speaker 1: not Climate COP and Baku Azerbaijan, but BIOCOP in Cali, Columbia.

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Speaker 1: We've got Hugh Bromley, beanuf's head of Food, Agriculture and

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Speaker 1: Nature and his team member Alistair Perty on the show

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Speaker 1: today to tell us about the United Nations Conference on

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Speaker 1: Biological Diversity. They tell us what this summit is all

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Speaker 1: about and what we can expect from the good to

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Speaker 1: the bad, by sharing some of their predictions for this

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Speaker 1: event in a research note titled Expectations from Biodiversity COP

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Speaker 1: sixteen Cali Fauna Dreaming. We love a good pun in there.

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Speaker 1: So if you're more familiar with Climate COP, you're not alone.

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Speaker 1: We'll go through some of the need to know definitions

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Speaker 1: to get you familiar with the international agreements like the

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Speaker 1: Global Biodiversity Framework and required homework in advance of COP

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Speaker 1: sixteen by the parties attending, such as the National Biodiversity

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Speaker 1: Strategies and Action Plans. Clients will be able to find

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Speaker 1: this report at BNF go on the Bloomberg terminal, or

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Speaker 1: at BNF dot com for public resources associated with international

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Speaker 1: events such as COP sixteen, COP twenty nine, or New

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Speaker 1: York Climate Week. Head to about dot BNF, dot com,

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Speaker 1: forward slash, bn EF dash climate dash action. This website

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Speaker 1: contains public research on climate and nature as we publish reports.

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Speaker 1: Now let's get to our conversation with Hugh and Alistair

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Speaker 1: regarding BIOCOP. Hugh, welcome to the show.

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Speaker 2: Great to be back, Dana.

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Speaker 1: And Alistair, nice having you back to Thank you, Dana,

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Speaker 1: nice to be here. We're going to talk about biodiversity

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Speaker 1: COP today and we're going to use a lot of

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Speaker 1: definitions because really that was the genesis of why we

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Speaker 1: decided to do this show, is that there's so much

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Speaker 1: conversation about climate COP and increasingly conversation about bio diversity COP.

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Speaker 1: And we wager that they're listeners out there who listen

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Speaker 1: to this show who also want to know what the

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Speaker 1: difference is and really what the aims and purpose of

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Speaker 1: biodiversity COP is, especially with it coming up very shortly.

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Speaker 1: So before we even jump in on the Conference of

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Speaker 1: the Parties, which is what COP stands for, let's do

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Speaker 1: some definitions on nature and biodiversity because I increasingly am

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Speaker 1: seeing nature used as terminology within financial reporting. And then additionally,

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Speaker 1: biodiversity is another term that keeps coming up. So nature biodiversity,

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Speaker 1: which one do you want to start with? But give

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Speaker 1: me a definition.

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Speaker 3: Yeah, it's a really good point, Dan, and I think

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Speaker 3: there's been quite a lot of confusion about this terminology,

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Speaker 3: especially over the last year and within the financial circles.

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Speaker 3: Generally we say nature when we're talking about all resources

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Speaker 3: not made by humans that can be biotic things i.

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Speaker 3: Living organisms, or abiotic resources non living things such as water, air,

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Speaker 3: and geology. Biodiversity is different. It's the variation in the

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Speaker 3: type of species and think more biodiversity means more different

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Speaker 3: kinds of living things and this can apply across species, habitats,

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Speaker 3: and also genetics.

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Speaker 1: So at biodiversity cop they're focused specifically on biodiversity or

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Speaker 1: does it bleed into this broader definition that is nature.

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Speaker 3: Essentially, biodiversity is one characteristic of nature. If we improve nature,

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Speaker 3: if we make it more resilient, one of the things

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Speaker 3: that we'll see is more kinds of species and more biodiversity.

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Speaker 3: So yeah, the focus will be on biodiversity, but that's

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Speaker 3: part of a bigger discussion on nature and the reason

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Speaker 3: why This is so important for us as humans and

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Speaker 3: for the business world is because this stack of natural

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Speaker 3: resources provides ecosystem services. That's a flow of value that

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Speaker 3: we can generate. Many things from this covers regulating services, provisions,

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Speaker 3: provisioning services, supporting services, and cultural services. Some of the

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Speaker 3: more well known ones might just be the food that

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Speaker 3: we get from nature, or it could be pollination services

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Speaker 3: or water and air purification. We also derive intangible benefits,

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Speaker 3: which is cultural appreciation on various other things like.

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Speaker 1: That pollination services. I mean you're literally talking about bees here. Yeah,

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Speaker 1: we are exactly Okay, we're giving things very technical names.

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Speaker 1: Here we go. So at Biodiversity Cup where when what's

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Speaker 1: coming up?

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Speaker 2: Sure?

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Speaker 4: So bid Diversity COP kicks off later this month in Cali, Columbia.

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Speaker 4: So really this comes nearly two years after a landmark

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Speaker 4: agreement was reached at COP fifteen, which was in Montreal

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Speaker 4: the end of twenty twenty two that led to the

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Speaker 4: Global bio Diversity Framework, a set of principles. So Cali

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Speaker 4: Columbia is really meant to be just a status check

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Speaker 4: on how we're progressing on those that agreement and the

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Speaker 4: set of targets reached in Montreal, rather than leading to

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Speaker 4: any great breakthrough in new agreements.

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Speaker 1: And these CUP meetings are facilitated by the United Nations.

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Speaker 1: But who really attends.

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Speaker 4: We know this time around there's around fourteen thousand delegates registered,

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Speaker 4: so I imagine that's going to be a record, including a

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Speaker 4: number of heads of state. I think this bio Diversity

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Speaker 4: cop is really going to be the first we see

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Speaker 4: a really significant financial and corporate attendance and delegation. That

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Speaker 4: was somewhat true in Montreal, probably for the first instance,

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Speaker 4: but this is one where actually that we're seeing amongst

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Speaker 4: our clientele much more interest in this space, especially given

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Speaker 4: the challenges of attending Climate copp and Backwood.

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Speaker 2: Later in the.

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Speaker 3: Year's one hundred and ninety six parties, which means regions

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Speaker 3: countries are signatories of the Convention on Biological Diversity. They

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Speaker 3: all send delegates to negotiate on many of the items

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Speaker 3: up a discussion. Among these one hundred and ninety six parties,

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Speaker 3: there's one hundred ministers for the environment from their respective parties,

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Speaker 3: as well as twelve heads of states, largely from South

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Speaker 3: American or Latin American countries.

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Speaker 1: So let's talk a little bit just while we're laying

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Speaker 1: it all out at the beginning what the structure of

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Speaker 1: these meetings really is. So you have those that are

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Speaker 1: for the delegates and the official negotiations. So when we

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Speaker 1: talk about the different things that are actually signed and

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Speaker 1: the resolutions that come out of these meetings, there's one

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Speaker 1: set of meetings, but then there's the blue zone and

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Speaker 1: the green zone, and then people who are going to

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Speaker 1: neither of the two. But we can leave that to

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Speaker 1: the side. The blue zone in the green zone, can

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Speaker 1: you explain what the difference between those are.

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Speaker 3: That's such a good point because when I first standed

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Speaker 3: this space, I was already confused by the difference. You

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Speaker 3: hear it thrown around all the time, and you're like,

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Speaker 3: what's the green, what's the blue. Blue is where all

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Speaker 3: the official negotiation happens. That's where the plannary room is,

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Speaker 3: where all the party's main delegates Are's where business happens.

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Speaker 3: There is some angio and civil society engagement there, but

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Speaker 3: most of the non government, non official negotiations happens about

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Speaker 3: forty five minutes away in the center of town in

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Speaker 3: the green zone. Here a lot of private and public

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Speaker 3: sector institutions have set up informal pavilions where there'll be debates, discussions, panels.

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Speaker 2: I think for.

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Speaker 4: Anyone who's attending CALLY this year, they'll be becoming aware

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Speaker 4: of just how challenging the logistics is. Because normally the

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Speaker 4: green and the blue zones are either adjacent or concentric

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Speaker 4: to one another. Cally's looking different, CALLI. The green zone

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Speaker 4: is downtown, the blue zone is a conference center. You know,

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Speaker 4: normally twenty minutes out of town. We're told it will

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Speaker 4: take forty five minutes to an hour. Given the number

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Speaker 4: of people visiting town. It's going to be quite a

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Speaker 4: difficult cop to be present in and you know, to

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Speaker 4: experience both zones, and I imagine you know certainly going

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Speaker 4: into it, that's the logistics are looking challenging.

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Speaker 1: So you had mentioned this Kunming Montreal Global Biodiversity Framework

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Speaker 1: referred to as GBF, and this was one of the

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Speaker 1: really important things that came out of COP fifteen two

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Speaker 1: years ago. Can you explain what's in that and why

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Speaker 1: that was such a large agreement to come to.

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Speaker 3: Absolutely, the Global Biodiversity Framework is Nature's equivalent of the

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Speaker 3: Paris Agreement. Here all those one hundred and ninety six

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Speaker 3: parties came together and agreed essentially a ten year plan

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Speaker 3: for biodiversity. It's the goals that we need to achieve

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Speaker 3: by twenty thirty. That's twenty three targets covering a range

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Speaker 3: of really important issues that we'll get into today, as

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Speaker 3: well as four more high level fluffy goals living in

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Speaker 3: harmony with nature by twenty fifty. But these things won't

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Speaker 3: be on the Khali agenda.

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Speaker 4: So the most notable of those targets and the headline

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Speaker 4: coming out of Montreal was.

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Speaker 2: This thirty by thirty target.

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Speaker 4: So that's the target to restore thirty percent of all

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Speaker 4: degraded ecosystems and conserve thirty percent of all inlead waters

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Speaker 4: and seas. That's been collectively known as a thirty by

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Speaker 4: thirty target.

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Speaker 2: But actually, to Alistairs point, there's twenty three.

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Speaker 4: Targets containing that part of us your framework, and Kelly

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Speaker 4: is really a check in on all those targets.

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Speaker 1: So decisions are made at Biodiversity COP and goals are set,

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Speaker 1: and goals are definitely a good way to reach for

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Speaker 1: something in benchmark progress, But is any of it legally

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Speaker 1: binding and how may that differ from how things take

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Speaker 1: place at the climate focused COP meetings.

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Speaker 3: It's a really good point and it kind of explains

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Speaker 3: why so little happened over the previous decade. The last

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Speaker 3: version of the GBF was a different tenure plan which

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Speaker 3: had twenty two targets, and they all failed. One of

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Speaker 3: the reasons is that the biodiversity cop outcomes are not

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Speaker 3: legally binding. Once countries or parties come back to their

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Speaker 3: governments and ratify policies, then it becomes a legally binding issue,

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Speaker 3: but there's no obligation for them to do that under

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Speaker 3: any kind of legal framework.

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Speaker 1: In the run up to the Biodiversity cop taking place

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Speaker 1: in Kelly, there was some paperwork to be done. So

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Speaker 1: the part that are actually coming to the table we're

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Speaker 1: meant to done their homework and submitted information. Can you

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Speaker 1: talk about what that's called? So what those plans actually

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Speaker 1: are referred to as, what's in them, and how we're

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Speaker 1: doing on submissions and meeting deadlines.

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Speaker 3: That's a great question, is the essence of what this

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Speaker 3: meeting is about. All of these one hundred and ninety

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Speaker 3: six parties were required to submit updated and revised national

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Speaker 3: biodiversity strategies and action plans, which is quite the mouthful.

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Speaker 3: So we'll just call them national plans. The deadline for

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Speaker 3: this submission is the closing ceremony of the Kali Proceedings.

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Speaker 3: All of these plans should cover the twenty three targets

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Speaker 3: contained within the Global Biodiversity Framework, and if done correctly

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Speaker 3: in theory, it should be a big step forward in

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Speaker 3: protecting and restoring nature globally. However, we've noticed that only

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Speaker 3: twenty five countries have so far been able to submit

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Speaker 3: those plans, but there is some silver linings within this.

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Speaker 3: Among those twenty five countries, does the EU, China, Japan,

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Speaker 3: and New Zealand and Australia submit their documents at the

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Speaker 3: Nature Positive Summit held in Sydney. The parties who have

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Speaker 3: submitted documents to count for about half of global GDP

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Speaker 3: and roughly a quarter of global landmarks, So there is

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Speaker 3: progress from many of the higher income Global North countries,

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Speaker 3: but still many laggots exist.

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Speaker 4: And while it's a significant share of GDP, it's worth

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Speaker 4: pointing out that these u and negotiations are consensus space,

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Speaker 4: so it actually actually you do need all one hundred

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Speaker 4: and ninety six parties to agree on conventions or in agreements. Here,

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Speaker 4: you don't need the multi A Smitt of plans necessarily,

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Speaker 4: but it's an indication of the level of engagement amongst

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Speaker 4: the various countries.

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Speaker 3: Many countries have been slow to submit their plans, and

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Speaker 3: we've learned recently that the UK will not be able

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Speaker 3: to submit it in time for the deadline. In Kuli,

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Speaker 3: one of the reasons is they've undertaken a really deep

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Speaker 3: there consultative approach. They've worked to really build out a

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Speaker 3: long term biodiversity strategy, and of course that takes time

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Speaker 3: because it is like a transformational economy wide issue.

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Speaker 1: Now in climate discussions, there's a lot of conversation around

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Speaker 1: industrialized nations and their emissions, and you know, really focus

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Speaker 1: on a few countries that actually have the vast majority

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Speaker 1: of global emissions and then other countries that are in

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Speaker 1: the process of industrializing. So emerging markets and developing economies

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Speaker 1: is largely the term being used at present to define

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Speaker 1: this group of countries and how potentially their emission targets

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Speaker 1: should be. Quite different from a biodiversity standpoint, you don't

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Speaker 1: have that same developed and developing diconomy, but you do

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Speaker 1: have vast amounts of biodiversity in certain parts of the world.

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Speaker 1: So maybe Brazil or Indonesia. Is there a real focus

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Speaker 1: on specific countries and which countries are really at the

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Speaker 1: center of these conversations regarding what it is we're trying

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Speaker 1: to preserve.

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Speaker 3: So similar to climate, much of global biodiversity is located

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Speaker 3: in EMDs, and generally we see them pressing for compensation

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Speaker 3: from the rich countries who have profited so much from it.

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Speaker 3: But this club of developed economies is reluctant to what's

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Speaker 3: required to these countries in order to rectify what's being taken.

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Speaker 3: There's a two hundred billion dollar target to mobilize finance

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Speaker 3: towards biodiversity in general, but there's also two specific targets

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Speaker 3: for international development finance. The first of those is mobilizing

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Speaker 3: twenty billion dollars to emdas by twenty twenty five for biodiversity,

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Speaker 3: and that follows through to twenty thirty with a thirty

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Speaker 3: billion target for those countries.

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Speaker 4: One thing we've done for the past two years produce

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Speaker 4: some funding priorities for where these funds, once raised, should

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Speaker 4: be deployed.

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Speaker 2: We've we've done it.

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Speaker 4: This will be our third iteration that really releasing at

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Speaker 4: Cali and really what we look at there is three indicators.

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Speaker 4: The first being the presence of biodiversity. You know, where

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Speaker 4: is biodiversity present that should be saved. The second is

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Speaker 4: where is it valuable? So what are the ecosystem services,

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Speaker 4: whether monetized or not by the broader economy. Where is

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Speaker 4: biodiversity in nature delivering value? And the third being where

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Speaker 4: is it under threat? So that is where is their

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Speaker 4: political instability or where are extractive industries large such that

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Speaker 4: they pose a threat to nature? And we look across

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Speaker 4: all of those metrics and wait, then we come to

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Speaker 4: the conclusion that a lot of bio diversity five needs

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Speaker 4: to be deployed, unsurprisingly in markets like Brazil, China, Indonesia,

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Speaker 4: DRC and Colombia and many others as well. And really

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Speaker 4: that comes down to threat is high amongst a lot

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Speaker 4: of these countries, but there is enough political stability such

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Speaker 4: that the.

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Speaker 2: Funds aren't there should not be wasted.

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Speaker 4: The value varies greatly, and these are biodiversity hotspots.

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Speaker 3: Some of the more developed countries have effectively destroyed almost

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Speaker 3: all of their biodiversity, so their presence score on that

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Speaker 3: indicator is zero. So we look at the EU UK,

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Speaker 3: almost no biodiversity remains.

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Speaker 1: Well, when we think about the Amazon people talk about

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Speaker 1: it sometimes as the lungs of the earth. So there

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Speaker 1: are shared resources that we should all care about, even

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Speaker 1: though they may not from a government standpoint, be specifically

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Speaker 1: one government's responsibility or another, which I suppose is actually

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Speaker 1: the fundamental aim of having these meetings.

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Speaker 2: That's absolutely right.

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Speaker 4: So that's one conclusion we arrived through this value metric

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Speaker 4: is that the value derived from ecosystem services transcend national boundaries.

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Speaker 4: And actually what you send to find is that ecosystem

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Speaker 4: service values tend to be higher across large land masses

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Speaker 4: where biodiversity remains intact, and across large economies.

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Speaker 2: But actually value of ecosystem service is.

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Speaker 4: Getting many cases exceed the local economy the GDP of

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Speaker 4: that economy, and that means that they are exporting value

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Speaker 4: to the rest of the world that they're probably not

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Speaker 4: paying for.

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Speaker 2: But that's why these negotiations are important.

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Speaker 1: So let's talk about that funding gap in some of

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Speaker 1: the financial pledges the GBF or the Global Biodiversity Framework.

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Speaker 1: Can we talk about how that is meant to be

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Speaker 1: funded and how much money has actually made its way

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Speaker 1: into the part.

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Speaker 3: According to BNAF analysis, which is based on some very

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Speaker 3: important reporting work done in twenty twenty and twenty twenty one,

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Speaker 3: and since updated. There's approximately an eight hundred billion dollar

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Speaker 3: annual gap. To meet the goals of the Biodiversity Framework,

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Speaker 3: a trillion per year is required, but currently only about

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Speaker 3: two hundred billion per years flowing into biodiversity. The first

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Speaker 3: step to address this is a target for twenty thirty

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Speaker 3: requiring two hundred billion of annual flows, But there's issues

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Speaker 3: here which countries should commit that in what form, What

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Speaker 3: constitutes biodiversity finance. Should it be biodiversity related, should it

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Speaker 3: be biodiversity specific. Every party to the CBD has their

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Speaker 3: own different view on this. So one weird thing we

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Speaker 3: found is like, there is this two hundred billion dollars

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Speaker 3: per year requirement contained within the GBF, but current annual

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Speaker 3: biodiversity flows are about two hundred billion. So you could argue,

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Speaker 3: if you were being cheeky, that that target has already

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Speaker 3: been met, but it's so fluffy that this disagreement.

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Speaker 1: So with all of the submitting of paperwork in the

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Speaker 1: run up to cop and discussions around which categories certain

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Speaker 1: parts of biodiversity fit within, do you think that one

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Speaker 1: of the benefits of these meetings has actually been better

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Speaker 1: reporting and better measurement of what's actually happening around the world.

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Speaker 4: There's often this idea that there's a massive data gap

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Speaker 4: of nature and biodiversity that's preventing action and preventing reporting.

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Speaker 4: I think, you know, in our view, that's probably overstated.

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Speaker 4: There is lots of data in this space. What's sometimes

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Speaker 4: missing is the attribution or association of those nature metrics

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Speaker 4: with the companies and even in some cases the jurisdictions

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Speaker 4: or countries responsible for that natural resource that is impacting

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Speaker 4: or dependent on those resources. I think scale and completeness

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Speaker 4: can be lacking, but regulative at developments, the EUGR being

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Speaker 4: the EU Deforestation Regulation and CSRD is the Corporate Sustainability

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Speaker 4: Reporting Directive supporting rapid development of private private sector data products,

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Speaker 4: including what we're doing here at Bloomberg, and we're investing

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Speaker 4: heavily in the space building out data sets and tools

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Speaker 4: to associate those indicators such as bi diverse intactus, deforestation,

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Speaker 4: water scarcity with company operations and their supply chain dependency.

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Speaker 4: There's also certainly data lacking around maritime. I think we're

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Speaker 4: a bit naive here. When I look at maritime data,

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Speaker 4: I think of the George W. Bush saying, I believe

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Speaker 4: the human being and fish can coexist peacefully. We're kind

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Speaker 4: of at that state where we know something exists there

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Speaker 4: but don't know how to approach it.

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Speaker 2: There's a data problem, but.

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Speaker 4: Reporting is moving really quickly because of regulation, and it's

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Speaker 4: supported by much more robust data.

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Speaker 1: So one of the things that we do headed into

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Speaker 1: the COP meetings, whether their Biodiversity COP or Climate COP,

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Speaker 1: is trying and give a bit of a scorecard to

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Speaker 1: how we think things are going to go when it

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Speaker 1: comes to negotiations across some of the main criteria of

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Speaker 1: what's to be discussed at that upcoming meeting. So a

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Speaker 1: bit of a prediction, if you will. Headed into this

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Speaker 1: biodiversity cup, we gave it a four point nine out

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Speaker 1: of ten overall, so we'll just call it five, which

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Speaker 1: I would say is not necessarily the most optimistic, But

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Speaker 1: there were a couple of categories that actually did rank

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Speaker 1: significantly higher. So why don't we go to some of

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Speaker 1: those with monitoring frameworks? And this actually piggybacks onto what

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Speaker 1: we were just talking about, which was, you know, data

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Speaker 1: and how we go about measuring things. That was one

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Speaker 1: of those areas we actually saw a pretty high score,

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Speaker 1: so it was eight out of ten. Why are monitoring

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Speaker 1: frameworks getting an eight out of ten? And why is

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Speaker 1: this potentially one of the bright spots in the upcoming

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Speaker 1: Biodiversity Cup meetings.

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Speaker 3: Behind the scenes of these cop meetings there is intercessional

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Speaker 3: meetings where all these parties negotiate through the year on

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Speaker 3: difficult technical issues. One of them less headline grabbing than

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Speaker 3: money of the others are these monitoring and report frameworks.

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Speaker 3: And over the last two years the parties to the

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Speaker 3: CBD have ironed out almost all the details behind the scenes,

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Speaker 3: so essentially they'll be rubber stamping the final document with

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Speaker 3: only a few things to agree. Much of the architecture

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Speaker 3: on reporting and monitoring was already built over the last

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Speaker 3: ten years. While the twenty two itch targets were a

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Speaker 3: complete failure with none of them being met, systems for

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Speaker 3: parties to monitor biodiversity change and report their findings were

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Speaker 3: set up well, so countries are well placed to agree

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Speaker 3: on these things, so we're optimistic of a good outcome. Also,

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Speaker 3: countries have nothing to lose. There's no point in disagreeing

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Speaker 3: on a monitoring framework. Much more important is actually implementing

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Speaker 3: policies that achieve those goals.

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Speaker 1: So then let's talk about where the drama lies, the

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Speaker 1: digital sequence information. Why is this likely to be really contentious?

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Speaker 3: Well, first, the digital sequence information or DSi is a

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Speaker 3: terrible name. It should just be called genetic resources. This

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Speaker 3: is acknowledged by people working in that field. It's just

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Speaker 3: hard now to rename it. When we say genetic resources,

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Speaker 3: we say information from plant animal genetics that are then

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Speaker 3: used in fields such as medicine or agricultural biotechnology. And

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Speaker 3: it's a hugely profitable industry, with global revenues from DSi

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Speaker 3: estimated at about one point five trillion per year, rising

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Speaker 3: to almost two point three trillion by twenty thirty.

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Speaker 4: The reason we're unlikely to see any breakthroughs here is

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Speaker 4: that there's really no reason for these companies to be paying.

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Speaker 4: The world has a very Victorian attitude to generate material.

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Speaker 4: These companies and countries can benefit from genate resources collected

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Speaker 4: from poor countries.

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Speaker 2: At no cost.

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Speaker 4: Really, what you have is companies that are basically privatized

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Speaker 4: British museums of genate resources collected from other nations at

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Speaker 4: various points in time.

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Speaker 1: So let's talk about some of the different groups that

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Speaker 1: are coming together. So beyond those who are involved with

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Speaker 1: the actual negotiations at the real center of the meeting,

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Speaker 1: there are some other stakeholders that really want to have

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Speaker 1: a voice there. Some of those are businesses as we

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Speaker 1: were just discussing and what they're actually getting from nature

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Speaker 1: and biodiversity. And then there are Indigenous peoples who really

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Speaker 1: do need to be represent and how is this being

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Speaker 1: incorporated in and the term is Indigenous Peoples in Local

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Speaker 1: Communities iplcs. How are they featuring at this year's.

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Speaker 3: Cop Indigenous peoples and local communities are the most effective

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Speaker 3: custodians and stewarts of biodiversity, yet they're often excluded from

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Speaker 3: negotiations or marginalized. One breakthrough in twenty twenty two in

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Speaker 3: the GBF was to include them in negotiations and make

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Speaker 3: sure that marginalization didn't happen. But the issue is clouded

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Speaker 3: by every representative of iplc's having a different view on

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Speaker 3: how they should engage, what their representation should be, and

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Speaker 3: that leads to protracted negotiations, limiting the chance of anything

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Speaker 3: actually occurring. So participants in Cali will negotiate on behalf

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Speaker 3: of IPLCS, A lot of opinions will be exchanged, but

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Speaker 3: there won't be very much concrete progress on actual finance

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Speaker 3: for iplcs or including them in negotiations.

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Speaker 1: So one of the things you said at the beginning

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Speaker 1: of the show was that there is even more business

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Speaker 1: interest on what's happening in biodiversity. Some might say that

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Speaker 1: this is an acknowledgment of how important biodiversity is to

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Speaker 1: everyone on this planet, businesses by extension, But really, how

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Speaker 1: are businesses and companies and the financial sector really approaching

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Speaker 1: this and how are they thinking about it? Basically, why

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Speaker 1: are they showing up in person for this next set

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Speaker 1: of CUP meetings.

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Speaker 2: Sure?

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Speaker 4: So, I think for many businesses, they started paying attention

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Speaker 4: around the time of the Global Wide Diversity Framework, either

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Speaker 4: they arrived in Montreal for the first time or they

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Speaker 4: started paying attentions as soon as that agreement was reached.

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Speaker 4: So both for business and financial institutions, I've kind of

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Speaker 4: noticed these two or three stages of their engagement back

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Speaker 4: then two years ago. You know, they were really attracted

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Speaker 4: to the promise of the new financial products and markets

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Speaker 4: to support that nature restoration. There might be new revenue

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Speaker 4: opportunities in this space. I think over the last twelve

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Speaker 4: months or so, a lot of that attention actually shifted

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Speaker 4: away from opportunities toward risk, and that's with the rise

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Speaker 4: of the Task Force on Nature Related Financial Disclosures t NFD,

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Speaker 4: CSRD and EEDR I mentioned before, and that pivot to

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Speaker 4: nature risk within their portfolio and their supply chain. I'm

440
00:21:51,240 --> 00:21:52,920
Speaker 4: now starting to see science that they're starting to think

441
00:21:52,920 --> 00:21:56,000
Speaker 4: about opportunities again, but this time it's within their portfolio.

442
00:21:56,080 --> 00:21:57,879
Speaker 2: So moving toward similar.

443
00:21:57,520 --> 00:21:59,639
Speaker 4: Framing to how we think about low carbon or climate

444
00:21:59,680 --> 00:22:03,320
Speaker 4: finance and transition, where the bulk investment in that space

445
00:22:03,359 --> 00:22:06,760
Speaker 4: involves doing less harm building solar instead of building fossil

446
00:22:06,760 --> 00:22:10,240
Speaker 4: fuel plants. It's rather than undoing the harm through carbon removal.

447
00:22:10,320 --> 00:22:12,280
Speaker 4: So actually in Knights you've got this discussion at the

448
00:22:12,320 --> 00:22:15,680
Speaker 4: moment between nature positive activities, the equivalent of carbon removal

449
00:22:15,720 --> 00:22:17,880
Speaker 4: and just doing less harm. And I think that that's

450
00:22:17,880 --> 00:22:19,600
Speaker 4: where we're starting to say some more interest.

451
00:22:19,920 --> 00:22:23,120
Speaker 1: So since you brought up solar farms, this then brings

452
00:22:23,200 --> 00:22:27,440
Speaker 1: up the important interplay between the climate and biodiversity COP

453
00:22:27,440 --> 00:22:30,560
Speaker 1: and how these conversations are increasingly featuring at one another.

454
00:22:30,800 --> 00:22:33,560
Speaker 1: At last year's Climate COP in the United Arab Emirates,

455
00:22:33,600 --> 00:22:37,280
Speaker 1: there were dates that actually featured these same topics and

456
00:22:37,320 --> 00:22:41,080
Speaker 1: additionally upcoming in Baku, Azerbaijan, there were days at the

457
00:22:41,280 --> 00:22:43,280
Speaker 1: end of the agenda, so they're not in the first

458
00:22:43,320 --> 00:22:45,320
Speaker 1: couple of days, but they are still featuring some of

459
00:22:45,320 --> 00:22:49,720
Speaker 1: these same topics. To what degree is their communication across

460
00:22:49,840 --> 00:22:53,800
Speaker 1: these different parties and some degree of alignment.

461
00:22:54,240 --> 00:22:57,520
Speaker 3: The interplay between climate and nature is well understood by

462
00:22:57,520 --> 00:23:01,000
Speaker 3: academics on the business world. There's some mutual dependence between

463
00:23:01,080 --> 00:23:04,720
Speaker 3: nature and climate. When we have increasing climate change that

464
00:23:04,960 --> 00:23:09,040
Speaker 3: reduces resiliency and biodiversity. Less biodiversity makes it harder for

465
00:23:09,240 --> 00:23:13,720
Speaker 3: ecosystems to sequest the carbon So across different spheres of

466
00:23:13,720 --> 00:23:16,840
Speaker 3: the economy and the academia, there is acknowledgment that there

467
00:23:16,880 --> 00:23:19,760
Speaker 3: needs to begned more alignment between these two cops. However,

468
00:23:19,800 --> 00:23:22,199
Speaker 3: it's difficult in practice. The way the two conventions are

469
00:23:22,200 --> 00:23:25,080
Speaker 3: set up makes it hard for them to integrate into

470
00:23:25,080 --> 00:23:27,440
Speaker 3: one another. But there has been very high level engagement

471
00:23:27,480 --> 00:23:30,200
Speaker 3: on this. There's a joint statement at COP twenty eight

472
00:23:30,440 --> 00:23:34,200
Speaker 3: and the coming Montreal Biodiversity COP showing that we need

473
00:23:34,240 --> 00:23:37,640
Speaker 3: more alignment between the two. The president of COP sixteen,

474
00:23:37,840 --> 00:23:40,560
Speaker 3: who is the Colombian Environment Minister, has said that its

475
00:23:40,600 --> 00:23:42,919
Speaker 3: termission to ensure that the outcome of this COP is

476
00:23:42,960 --> 00:23:46,520
Speaker 3: better alignment. However, we don't see any concrete outcome based

477
00:23:46,600 --> 00:23:48,000
Speaker 3: on difficulties and integration.

478
00:23:48,359 --> 00:23:50,879
Speaker 4: You're right, we're going to see biodiversity in nature come

479
00:23:50,960 --> 00:23:52,840
Speaker 4: up again in Baku, but I think even more so

480
00:23:52,960 --> 00:23:54,800
Speaker 4: next year as we go into Brazil. Be thing for

481
00:23:54,880 --> 00:23:58,520
Speaker 4: Brazil's likely the deforestation clearly relevant to this space. Brazil

482
00:23:58,600 --> 00:24:01,919
Speaker 4: is the most valuable eco system service market in the

483
00:24:01,960 --> 00:24:05,520
Speaker 4: world through resources like the Amazon Basin and the Atlantic forests,

484
00:24:05,680 --> 00:24:08,160
Speaker 4: so there's going to be more discussion in this space

485
00:24:08,200 --> 00:24:10,439
Speaker 4: and convergence of issues. I think there is a propose

486
00:24:10,520 --> 00:24:13,560
Speaker 4: out there to merge the COPS together, not sure whether

487
00:24:13,920 --> 00:24:15,760
Speaker 4: how how far that will go. We also know that

488
00:24:15,760 --> 00:24:18,480
Speaker 4: from a corporate reporting standpoint, these issues are likely to

489
00:24:18,480 --> 00:24:21,520
Speaker 4: merge together. The TNFD will over time be integrated into

490
00:24:21,680 --> 00:24:22,920
Speaker 4: global reporting standards.

491
00:24:23,160 --> 00:24:26,120
Speaker 1: So the Brazil Climate focused COP that will take place

492
00:24:26,160 --> 00:24:29,280
Speaker 1: as the COP thirty coming up in November of twenty

493
00:24:29,320 --> 00:24:32,199
Speaker 1: twenty five is definitely one that many in the climate

494
00:24:32,240 --> 00:24:35,560
Speaker 1: space are thinking is going to have a much bigger impact.

495
00:24:35,680 --> 00:24:38,600
Speaker 1: Will be halfway through this decade, headed to twenty thirty,

496
00:24:38,600 --> 00:24:41,160
Speaker 1: where there are so many different benchmarks that people are

497
00:24:41,200 --> 00:24:45,160
Speaker 1: looking towards. Do you expect to see a similar important

498
00:24:45,200 --> 00:24:47,960
Speaker 1: COP coming up next year in the biodiversity space or

499
00:24:48,000 --> 00:24:50,760
Speaker 1: is there a year that we're looking towards where you

500
00:24:50,800 --> 00:24:53,720
Speaker 1: anticipate a lot of this focus around twenty thirty Because

501
00:24:53,720 --> 00:24:56,000
Speaker 1: we can't wait till we get there, we'll actually start

502
00:24:56,000 --> 00:25:00,080
Speaker 1: to feature in this benchmarking will really take place in.

503
00:25:00,359 --> 00:25:03,119
Speaker 3: That you mentioned Baku, because early signs point to that

504
00:25:03,280 --> 00:25:05,320
Speaker 3: also being the host of the next COP, which will

505
00:25:05,320 --> 00:25:08,240
Speaker 3: be in twenty twenty six, COP seventeen. That will be

506
00:25:08,359 --> 00:25:12,320
Speaker 3: much more meaningful and impactful than Cali's version because it's

507
00:25:12,400 --> 00:25:15,280
Speaker 3: slated to be a global stock take. It will measure

508
00:25:15,480 --> 00:25:19,359
Speaker 3: how far progress is on achieving the Global Biodiversity Framework goals,

509
00:25:19,480 --> 00:25:22,680
Speaker 3: unlike this year where it's simply a status check. Where

510
00:25:22,680 --> 00:25:25,399
Speaker 3: are countries with their national plans? Who is submitted and

511
00:25:25,440 --> 00:25:28,000
Speaker 3: who hasn't, how are our reporting frameworks and have we

512
00:25:28,040 --> 00:25:31,080
Speaker 3: made any progress on finance? Those aren't concrete measurements of

513
00:25:31,160 --> 00:25:33,760
Speaker 3: where we are on global biodiversity, just are we well

514
00:25:33,800 --> 00:25:35,760
Speaker 3: prepared to start addressing it.

515
00:25:35,760 --> 00:25:38,000
Speaker 1: It's right around the corner. Both of you will be

516
00:25:38,000 --> 00:25:42,359
Speaker 1: closely watching what happens during COP in Cali. Will you

517
00:25:42,400 --> 00:25:45,680
Speaker 1: be there and what sorts of activities do we BNF

518
00:25:45,680 --> 00:25:46,240
Speaker 1: have to play?

519
00:25:46,640 --> 00:25:48,920
Speaker 4: Yeah, we will be there, so both Bloomberg and BNF

520
00:25:48,920 --> 00:25:51,840
Speaker 4: are sending a delegation there. We have a number of

521
00:25:51,840 --> 00:25:55,760
Speaker 4: events and report releases planned there covering nature, risk, investment

522
00:25:55,800 --> 00:25:59,520
Speaker 4: opportunities in this space, biodiversity, finance, importance of water. We

523
00:25:59,560 --> 00:26:01,359
Speaker 4: will have a WODE online hopefully by the time this

524
00:26:01,680 --> 00:26:04,399
Speaker 4: podcast is listened to, but if not, email your BNF

525
00:26:04,440 --> 00:26:07,720
Speaker 4: rep or BNF cop at Bloomberg dot net to find

526
00:26:07,720 --> 00:26:10,280
Speaker 4: out more and enjoying those meetings, and we'll also be

527
00:26:10,480 --> 00:26:12,960
Speaker 4: reporting on progress as it happens, so well to watch

528
00:26:13,040 --> 00:26:15,639
Speaker 4: out for research both during and after biocop.

529
00:26:15,640 --> 00:26:18,440
Speaker 1: And Kelly, Well, let's close today's show with some facts

530
00:26:18,480 --> 00:26:21,359
Speaker 1: that people just need to know in order to really

531
00:26:21,400 --> 00:26:23,439
Speaker 1: be conversant in this space. What are some of the

532
00:26:23,440 --> 00:26:25,640
Speaker 1: main things that come to your mind that you think

533
00:26:25,680 --> 00:26:27,680
Speaker 1: everybody should know about biodiversity.

534
00:26:27,920 --> 00:26:30,600
Speaker 3: Anyone who spend time in this nature and biodiversity space,

535
00:26:30,640 --> 00:26:33,399
Speaker 3: be they academics or business representatives, will have heard the

536
00:26:33,400 --> 00:26:37,520
Speaker 3: phrase fifty percent of economic value generation is dependent on nature.

537
00:26:37,520 --> 00:26:40,399
Speaker 3: But that's untrue. The actual statistic is fifty percent is

538
00:26:40,440 --> 00:26:43,520
Speaker 3: moderately or highly dependent. We far prefer to say all

539
00:26:43,640 --> 00:26:46,880
Speaker 3: economic value generation is to some extent dependent on nature

540
00:26:46,920 --> 00:26:50,679
Speaker 3: and biodiversity. We recently profiled a large cohort of agrifood

541
00:26:50,720 --> 00:26:53,520
Speaker 3: companies and where they stand on nature and biodiversity, and

542
00:26:53,560 --> 00:26:56,720
Speaker 3: the conclusion was quite surprising. Approximately ninety percent of them

543
00:26:56,760 --> 00:26:59,920
Speaker 3: acknowledged biodiversity in that and you're reporting, while only ten

544
00:27:00,080 --> 00:27:03,840
Speaker 3: percent to actually investigate the risks and opportunities that are

545
00:27:03,880 --> 00:27:04,720
Speaker 3: associated with that.

546
00:27:05,240 --> 00:27:07,679
Speaker 1: So there's one more that I'd love for you to

547
00:27:07,680 --> 00:27:10,399
Speaker 1: bring into the conversation, which I found really astounding and

548
00:27:10,520 --> 00:27:12,879
Speaker 1: has gotten a bit of press the last couple of weeks.

549
00:27:13,160 --> 00:27:16,640
Speaker 1: That's around biodiversity loss. Where are we at in terms

550
00:27:16,720 --> 00:27:19,640
Speaker 1: of global biodiversity and wildlife populations.

551
00:27:19,960 --> 00:27:23,200
Speaker 3: One of the most famous statistics and ways of monitoring

552
00:27:23,200 --> 00:27:27,080
Speaker 3: biodiversity loss is the Zoological Society of London and WWF

553
00:27:27,160 --> 00:27:30,680
Speaker 3: Living Planet Index, and that shows that since a baseline

554
00:27:30,720 --> 00:27:34,959
Speaker 3: year in nineteen seventy, average vertebrate species populations have declined

555
00:27:35,000 --> 00:27:38,280
Speaker 3: by seventy three percent, which is an extraordinary reduction. One

556
00:27:38,280 --> 00:27:42,080
Speaker 3: more concerning figure might be the newly released Planetary Boundaries

557
00:27:42,119 --> 00:27:44,840
Speaker 3: Health check that was released at New York Climate Action

558
00:27:44,920 --> 00:27:47,639
Speaker 3: Week a couple of weeks ago. It founder of nine

559
00:27:47,680 --> 00:27:52,080
Speaker 3: planetary boundaries, which are measurements to show whether Earth systems

560
00:27:52,119 --> 00:27:54,359
Speaker 3: are able to continue at a healthy level. Six have

561
00:27:54,440 --> 00:27:57,720
Speaker 3: been crossed, although it's almost seven now. That's extremely concerning

562
00:27:57,720 --> 00:27:59,880
Speaker 3: for biodiversity loss and nature loss globally.

563
00:28:00,040 --> 00:28:01,760
Speaker 1: And where does that research come out of.

564
00:28:01,880 --> 00:28:05,119
Speaker 3: That research comes from Professor Johann Rockstrom at the Potstam

565
00:28:05,119 --> 00:28:06,959
Speaker 3: Institute for Climate Impact Research.

566
00:28:07,280 --> 00:28:09,320
Speaker 1: If that is not a stark number to inspire some

567
00:28:09,440 --> 00:28:13,359
Speaker 1: action and hopefully some very inspired conversations at Copp and KLi,

568
00:28:13,720 --> 00:28:16,359
Speaker 1: I don't know what would Hugh Alstar, thank you very

569
00:28:16,440 --> 00:28:17,359
Speaker 1: much for joining today.

570
00:28:17,520 --> 00:28:18,720
Speaker 2: Thanks title, Thanks Stana.

571
00:28:27,520 --> 00:28:30,640
Speaker 1: Today's episode of Switched On was produced by Cam Gray

572
00:28:30,840 --> 00:28:34,520
Speaker 1: with production assistants from Kamala Shelling. Bloomberg NIF is a

573
00:28:34,560 --> 00:28:37,680
Speaker 1: service provided by Bloomberg Finance LP and its affiliates. This

574
00:28:37,800 --> 00:28:40,479
Speaker 1: recording does not constitute, nor should it be construed as

575
00:28:40,520 --> 00:28:44,440
Speaker 1: investment advice, investment recommendations, or a recommendation as to an

576
00:28:44,480 --> 00:28:47,640
Speaker 1: investment or other strategy. Bloomberg ANNIAF should not be considered

577
00:28:47,680 --> 00:28:51,000
Speaker 1: as information sufficient upon which to base an investment decision.

578
00:28:51,080 --> 00:28:54,080
Speaker 1: Neither Bloomberg Finance LP, nor any of its affiliates makes

579
00:28:54,080 --> 00:28:57,840
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581
00:29:00,880 --> 00:29:03,560
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