Speaker 1: This is Dana Perkins and you're listening to Switched on
Speaker 1: the BNAF podcast, and today we're going to talk about COP,
Speaker 1: not Climate COP and Baku Azerbaijan, but BIOCOP in Cali, Columbia.
Speaker 1: We've got Hugh Bromley, beanuf's head of Food, Agriculture and
Speaker 1: Nature and his team member Alistair Perty on the show
Speaker 1: today to tell us about the United Nations Conference on
Speaker 1: Biological Diversity. They tell us what this summit is all
Speaker 1: about and what we can expect from the good to
Speaker 1: the bad, by sharing some of their predictions for this
Speaker 1: event in a research note titled Expectations from Biodiversity COP
Speaker 1: sixteen Cali Fauna Dreaming. We love a good pun in there.
Speaker 1: So if you're more familiar with Climate COP, you're not alone.
Speaker 1: We'll go through some of the need to know definitions
Speaker 1: to get you familiar with the international agreements like the
Speaker 1: Global Biodiversity Framework and required homework in advance of COP
Speaker 1: sixteen by the parties attending, such as the National Biodiversity
Speaker 1: Strategies and Action Plans. Clients will be able to find
Speaker 1: this report at BNF go on the Bloomberg terminal, or
Speaker 1: at BNF dot com for public resources associated with international
Speaker 1: events such as COP sixteen, COP twenty nine, or New
Speaker 1: York Climate Week. Head to about dot BNF, dot com,
Speaker 1: forward slash, bn EF dash climate dash action. This website
Speaker 1: contains public research on climate and nature as we publish reports.
Speaker 1: Now let's get to our conversation with Hugh and Alistair
Speaker 1: regarding BIOCOP. Hugh, welcome to the show.
Speaker 2: Great to be back, Dana.
Speaker 1: And Alistair, nice having you back to Thank you, Dana,
Speaker 1: nice to be here. We're going to talk about biodiversity
Speaker 1: COP today and we're going to use a lot of
Speaker 1: definitions because really that was the genesis of why we
Speaker 1: decided to do this show, is that there's so much
Speaker 1: conversation about climate COP and increasingly conversation about bio diversity COP.
Speaker 1: And we wager that they're listeners out there who listen
Speaker 1: to this show who also want to know what the
Speaker 1: difference is and really what the aims and purpose of
Speaker 1: biodiversity COP is, especially with it coming up very shortly.
Speaker 1: So before we even jump in on the Conference of
Speaker 1: the Parties, which is what COP stands for, let's do
Speaker 1: some definitions on nature and biodiversity because I increasingly am
Speaker 1: seeing nature used as terminology within financial reporting. And then additionally,
Speaker 1: biodiversity is another term that keeps coming up. So nature biodiversity,
Speaker 1: which one do you want to start with? But give
Speaker 1: me a definition.
Speaker 3: Yeah, it's a really good point, Dan, and I think
Speaker 3: there's been quite a lot of confusion about this terminology,
Speaker 3: especially over the last year and within the financial circles.
Speaker 3: Generally we say nature when we're talking about all resources
Speaker 3: not made by humans that can be biotic things i.
Speaker 3: Living organisms, or abiotic resources non living things such as water, air,
Speaker 3: and geology. Biodiversity is different. It's the variation in the
Speaker 3: type of species and think more biodiversity means more different
Speaker 3: kinds of living things and this can apply across species, habitats,
Speaker 3: and also genetics.
Speaker 1: So at biodiversity cop they're focused specifically on biodiversity or
Speaker 1: does it bleed into this broader definition that is nature.
Speaker 3: Essentially, biodiversity is one characteristic of nature. If we improve nature,
Speaker 3: if we make it more resilient, one of the things
Speaker 3: that we'll see is more kinds of species and more biodiversity.
Speaker 3: So yeah, the focus will be on biodiversity, but that's
Speaker 3: part of a bigger discussion on nature and the reason
Speaker 3: why This is so important for us as humans and
Speaker 3: for the business world is because this stack of natural
Speaker 3: resources provides ecosystem services. That's a flow of value that
Speaker 3: we can generate. Many things from this covers regulating services, provisions,
Speaker 3: provisioning services, supporting services, and cultural services. Some of the
Speaker 3: more well known ones might just be the food that
Speaker 3: we get from nature, or it could be pollination services
Speaker 3: or water and air purification. We also derive intangible benefits,
Speaker 3: which is cultural appreciation on various other things like.
Speaker 1: That pollination services. I mean you're literally talking about bees here. Yeah,
Speaker 1: we are exactly Okay, we're giving things very technical names.
Speaker 1: Here we go. So at Biodiversity Cup where when what's
Speaker 1: coming up?
Speaker 2: Sure?
Speaker 4: So bid Diversity COP kicks off later this month in Cali, Columbia.
Speaker 4: So really this comes nearly two years after a landmark
Speaker 4: agreement was reached at COP fifteen, which was in Montreal
Speaker 4: the end of twenty twenty two that led to the
Speaker 4: Global bio Diversity Framework, a set of principles. So Cali
Speaker 4: Columbia is really meant to be just a status check
Speaker 4: on how we're progressing on those that agreement and the
Speaker 4: set of targets reached in Montreal, rather than leading to
Speaker 4: any great breakthrough in new agreements.
Speaker 1: And these CUP meetings are facilitated by the United Nations.
Speaker 1: But who really attends.
Speaker 4: We know this time around there's around fourteen thousand delegates registered,
Speaker 4: so I imagine that's going to be a record, including a
Speaker 4: number of heads of state. I think this bio Diversity
Speaker 4: cop is really going to be the first we see
Speaker 4: a really significant financial and corporate attendance and delegation. That
Speaker 4: was somewhat true in Montreal, probably for the first instance,
Speaker 4: but this is one where actually that we're seeing amongst
Speaker 4: our clientele much more interest in this space, especially given
Speaker 4: the challenges of attending Climate copp and Backwood.
Speaker 2: Later in the.
Speaker 3: Year's one hundred and ninety six parties, which means regions
Speaker 3: countries are signatories of the Convention on Biological Diversity. They
Speaker 3: all send delegates to negotiate on many of the items
Speaker 3: up a discussion. Among these one hundred and ninety six parties,
Speaker 3: there's one hundred ministers for the environment from their respective parties,
Speaker 3: as well as twelve heads of states, largely from South
Speaker 3: American or Latin American countries.
Speaker 1: So let's talk a little bit just while we're laying
Speaker 1: it all out at the beginning what the structure of
Speaker 1: these meetings really is. So you have those that are
Speaker 1: for the delegates and the official negotiations. So when we
Speaker 1: talk about the different things that are actually signed and
Speaker 1: the resolutions that come out of these meetings, there's one
Speaker 1: set of meetings, but then there's the blue zone and
Speaker 1: the green zone, and then people who are going to
Speaker 1: neither of the two. But we can leave that to
Speaker 1: the side. The blue zone in the green zone, can
Speaker 1: you explain what the difference between those are.
Speaker 3: That's such a good point because when I first standed
Speaker 3: this space, I was already confused by the difference. You
Speaker 3: hear it thrown around all the time, and you're like,
Speaker 3: what's the green, what's the blue. Blue is where all
Speaker 3: the official negotiation happens. That's where the plannary room is,
Speaker 3: where all the party's main delegates Are's where business happens.
Speaker 3: There is some angio and civil society engagement there, but
Speaker 3: most of the non government, non official negotiations happens about
Speaker 3: forty five minutes away in the center of town in
Speaker 3: the green zone. Here a lot of private and public
Speaker 3: sector institutions have set up informal pavilions where there'll be debates, discussions, panels.
Speaker 2: I think for.
Speaker 4: Anyone who's attending CALLY this year, they'll be becoming aware
Speaker 4: of just how challenging the logistics is. Because normally the
Speaker 4: green and the blue zones are either adjacent or concentric
Speaker 4: to one another. Cally's looking different, CALLI. The green zone
Speaker 4: is downtown, the blue zone is a conference center. You know,
Speaker 4: normally twenty minutes out of town. We're told it will
Speaker 4: take forty five minutes to an hour. Given the number
Speaker 4: of people visiting town. It's going to be quite a
Speaker 4: difficult cop to be present in and you know, to
Speaker 4: experience both zones, and I imagine you know certainly going
Speaker 4: into it, that's the logistics are looking challenging.
Speaker 1: So you had mentioned this Kunming Montreal Global Biodiversity Framework
Speaker 1: referred to as GBF, and this was one of the
Speaker 1: really important things that came out of COP fifteen two
Speaker 1: years ago. Can you explain what's in that and why
Speaker 1: that was such a large agreement to come to.
Speaker 3: Absolutely, the Global Biodiversity Framework is Nature's equivalent of the
Speaker 3: Paris Agreement. Here all those one hundred and ninety six
Speaker 3: parties came together and agreed essentially a ten year plan
Speaker 3: for biodiversity. It's the goals that we need to achieve
Speaker 3: by twenty thirty. That's twenty three targets covering a range
Speaker 3: of really important issues that we'll get into today, as
Speaker 3: well as four more high level fluffy goals living in
Speaker 3: harmony with nature by twenty fifty. But these things won't
Speaker 3: be on the Khali agenda.
Speaker 4: So the most notable of those targets and the headline
Speaker 4: coming out of Montreal was.
Speaker 2: This thirty by thirty target.
Speaker 4: So that's the target to restore thirty percent of all
Speaker 4: degraded ecosystems and conserve thirty percent of all inlead waters
Speaker 4: and seas. That's been collectively known as a thirty by
Speaker 4: thirty target.
Speaker 2: But actually, to Alistairs point, there's twenty three.
Speaker 4: Targets containing that part of us your framework, and Kelly
Speaker 4: is really a check in on all those targets.
Speaker 1: So decisions are made at Biodiversity COP and goals are set,
Speaker 1: and goals are definitely a good way to reach for
Speaker 1: something in benchmark progress, But is any of it legally
Speaker 1: binding and how may that differ from how things take
Speaker 1: place at the climate focused COP meetings.
Speaker 3: It's a really good point and it kind of explains
Speaker 3: why so little happened over the previous decade. The last
Speaker 3: version of the GBF was a different tenure plan which
Speaker 3: had twenty two targets, and they all failed. One of
Speaker 3: the reasons is that the biodiversity cop outcomes are not
Speaker 3: legally binding. Once countries or parties come back to their
Speaker 3: governments and ratify policies, then it becomes a legally binding issue,
Speaker 3: but there's no obligation for them to do that under
Speaker 3: any kind of legal framework.
Speaker 1: In the run up to the Biodiversity cop taking place
Speaker 1: in Kelly, there was some paperwork to be done. So
Speaker 1: the part that are actually coming to the table we're
Speaker 1: meant to done their homework and submitted information. Can you
Speaker 1: talk about what that's called? So what those plans actually
Speaker 1: are referred to as, what's in them, and how we're
Speaker 1: doing on submissions and meeting deadlines.
Speaker 3: That's a great question, is the essence of what this
Speaker 3: meeting is about. All of these one hundred and ninety
Speaker 3: six parties were required to submit updated and revised national
Speaker 3: biodiversity strategies and action plans, which is quite the mouthful.
Speaker 3: So we'll just call them national plans. The deadline for
Speaker 3: this submission is the closing ceremony of the Kali Proceedings.
Speaker 3: All of these plans should cover the twenty three targets
Speaker 3: contained within the Global Biodiversity Framework, and if done correctly
Speaker 3: in theory, it should be a big step forward in
Speaker 3: protecting and restoring nature globally. However, we've noticed that only
Speaker 3: twenty five countries have so far been able to submit
Speaker 3: those plans, but there is some silver linings within this.
Speaker 3: Among those twenty five countries, does the EU, China, Japan,
Speaker 3: and New Zealand and Australia submit their documents at the
Speaker 3: Nature Positive Summit held in Sydney. The parties who have
Speaker 3: submitted documents to count for about half of global GDP
Speaker 3: and roughly a quarter of global landmarks, So there is
Speaker 3: progress from many of the higher income Global North countries,
Speaker 3: but still many laggots exist.
Speaker 4: And while it's a significant share of GDP, it's worth
Speaker 4: pointing out that these u and negotiations are consensus space,
Speaker 4: so it actually actually you do need all one hundred
Speaker 4: and ninety six parties to agree on conventions or in agreements. Here,
Speaker 4: you don't need the multi A Smitt of plans necessarily,
Speaker 4: but it's an indication of the level of engagement amongst
Speaker 4: the various countries.
Speaker 3: Many countries have been slow to submit their plans, and
Speaker 3: we've learned recently that the UK will not be able
Speaker 3: to submit it in time for the deadline. In Kuli,
Speaker 3: one of the reasons is they've undertaken a really deep
Speaker 3: there consultative approach. They've worked to really build out a
Speaker 3: long term biodiversity strategy, and of course that takes time
Speaker 3: because it is like a transformational economy wide issue.
Speaker 1: Now in climate discussions, there's a lot of conversation around
Speaker 1: industrialized nations and their emissions, and you know, really focus
Speaker 1: on a few countries that actually have the vast majority
Speaker 1: of global emissions and then other countries that are in
Speaker 1: the process of industrializing. So emerging markets and developing economies
Speaker 1: is largely the term being used at present to define
Speaker 1: this group of countries and how potentially their emission targets
Speaker 1: should be. Quite different from a biodiversity standpoint, you don't
Speaker 1: have that same developed and developing diconomy, but you do
Speaker 1: have vast amounts of biodiversity in certain parts of the world.
Speaker 1: So maybe Brazil or Indonesia. Is there a real focus
Speaker 1: on specific countries and which countries are really at the
Speaker 1: center of these conversations regarding what it is we're trying
Speaker 1: to preserve.
Speaker 3: So similar to climate, much of global biodiversity is located
Speaker 3: in EMDs, and generally we see them pressing for compensation
Speaker 3: from the rich countries who have profited so much from it.
Speaker 3: But this club of developed economies is reluctant to what's
Speaker 3: required to these countries in order to rectify what's being taken.
Speaker 3: There's a two hundred billion dollar target to mobilize finance
Speaker 3: towards biodiversity in general, but there's also two specific targets
Speaker 3: for international development finance. The first of those is mobilizing
Speaker 3: twenty billion dollars to emdas by twenty twenty five for biodiversity,
Speaker 3: and that follows through to twenty thirty with a thirty
Speaker 3: billion target for those countries.
Speaker 4: One thing we've done for the past two years produce
Speaker 4: some funding priorities for where these funds, once raised, should
Speaker 4: be deployed.
Speaker 2: We've we've done it.
Speaker 4: This will be our third iteration that really releasing at
Speaker 4: Cali and really what we look at there is three indicators.
Speaker 4: The first being the presence of biodiversity. You know, where
Speaker 4: is biodiversity present that should be saved. The second is
Speaker 4: where is it valuable? So what are the ecosystem services,
Speaker 4: whether monetized or not by the broader economy. Where is
Speaker 4: biodiversity in nature delivering value? And the third being where
Speaker 4: is it under threat? So that is where is their
Speaker 4: political instability or where are extractive industries large such that
Speaker 4: they pose a threat to nature? And we look across
Speaker 4: all of those metrics and wait, then we come to
Speaker 4: the conclusion that a lot of bio diversity five needs
Speaker 4: to be deployed, unsurprisingly in markets like Brazil, China, Indonesia,
Speaker 4: DRC and Colombia and many others as well. And really
Speaker 4: that comes down to threat is high amongst a lot
Speaker 4: of these countries, but there is enough political stability such
Speaker 4: that the.
Speaker 2: Funds aren't there should not be wasted.
Speaker 4: The value varies greatly, and these are biodiversity hotspots.
Speaker 3: Some of the more developed countries have effectively destroyed almost
Speaker 3: all of their biodiversity, so their presence score on that
Speaker 3: indicator is zero. So we look at the EU UK,
Speaker 3: almost no biodiversity remains.
Speaker 1: Well, when we think about the Amazon people talk about
Speaker 1: it sometimes as the lungs of the earth. So there
Speaker 1: are shared resources that we should all care about, even
Speaker 1: though they may not from a government standpoint, be specifically
Speaker 1: one government's responsibility or another, which I suppose is actually
Speaker 1: the fundamental aim of having these meetings.
Speaker 2: That's absolutely right.
Speaker 4: So that's one conclusion we arrived through this value metric
Speaker 4: is that the value derived from ecosystem services transcend national boundaries.
Speaker 4: And actually what you send to find is that ecosystem
Speaker 4: service values tend to be higher across large land masses
Speaker 4: where biodiversity remains intact, and across large economies.
Speaker 2: But actually value of ecosystem service is.
Speaker 4: Getting many cases exceed the local economy the GDP of
Speaker 4: that economy, and that means that they are exporting value
Speaker 4: to the rest of the world that they're probably not
Speaker 4: paying for.
Speaker 2: But that's why these negotiations are important.
Speaker 1: So let's talk about that funding gap in some of
Speaker 1: the financial pledges the GBF or the Global Biodiversity Framework.
Speaker 1: Can we talk about how that is meant to be
Speaker 1: funded and how much money has actually made its way
Speaker 1: into the part.
Speaker 3: According to BNAF analysis, which is based on some very
Speaker 3: important reporting work done in twenty twenty and twenty twenty one,
Speaker 3: and since updated. There's approximately an eight hundred billion dollar
Speaker 3: annual gap. To meet the goals of the Biodiversity Framework,
Speaker 3: a trillion per year is required, but currently only about
Speaker 3: two hundred billion per years flowing into biodiversity. The first
Speaker 3: step to address this is a target for twenty thirty
Speaker 3: requiring two hundred billion of annual flows, But there's issues
Speaker 3: here which countries should commit that in what form, What
Speaker 3: constitutes biodiversity finance. Should it be biodiversity related, should it
Speaker 3: be biodiversity specific. Every party to the CBD has their
Speaker 3: own different view on this. So one weird thing we
Speaker 3: found is like, there is this two hundred billion dollars
Speaker 3: per year requirement contained within the GBF, but current annual
Speaker 3: biodiversity flows are about two hundred billion. So you could argue,
Speaker 3: if you were being cheeky, that that target has already
Speaker 3: been met, but it's so fluffy that this disagreement.
Speaker 1: So with all of the submitting of paperwork in the
Speaker 1: run up to cop and discussions around which categories certain
Speaker 1: parts of biodiversity fit within, do you think that one
Speaker 1: of the benefits of these meetings has actually been better
Speaker 1: reporting and better measurement of what's actually happening around the world.
Speaker 4: There's often this idea that there's a massive data gap
Speaker 4: of nature and biodiversity that's preventing action and preventing reporting.
Speaker 4: I think, you know, in our view, that's probably overstated.
Speaker 4: There is lots of data in this space. What's sometimes
Speaker 4: missing is the attribution or association of those nature metrics
Speaker 4: with the companies and even in some cases the jurisdictions
Speaker 4: or countries responsible for that natural resource that is impacting
Speaker 4: or dependent on those resources. I think scale and completeness
Speaker 4: can be lacking, but regulative at developments, the EUGR being
Speaker 4: the EU Deforestation Regulation and CSRD is the Corporate Sustainability
Speaker 4: Reporting Directive supporting rapid development of private private sector data products,
Speaker 4: including what we're doing here at Bloomberg, and we're investing
Speaker 4: heavily in the space building out data sets and tools
Speaker 4: to associate those indicators such as bi diverse intactus, deforestation,
Speaker 4: water scarcity with company operations and their supply chain dependency.
Speaker 4: There's also certainly data lacking around maritime. I think we're
Speaker 4: a bit naive here. When I look at maritime data,
Speaker 4: I think of the George W. Bush saying, I believe
Speaker 4: the human being and fish can coexist peacefully. We're kind
Speaker 4: of at that state where we know something exists there
Speaker 4: but don't know how to approach it.
Speaker 2: There's a data problem, but.
Speaker 4: Reporting is moving really quickly because of regulation, and it's
Speaker 4: supported by much more robust data.
Speaker 1: So one of the things that we do headed into
Speaker 1: the COP meetings, whether their Biodiversity COP or Climate COP,
Speaker 1: is trying and give a bit of a scorecard to
Speaker 1: how we think things are going to go when it
Speaker 1: comes to negotiations across some of the main criteria of
Speaker 1: what's to be discussed at that upcoming meeting. So a
Speaker 1: bit of a prediction, if you will. Headed into this
Speaker 1: biodiversity cup, we gave it a four point nine out
Speaker 1: of ten overall, so we'll just call it five, which
Speaker 1: I would say is not necessarily the most optimistic, But
Speaker 1: there were a couple of categories that actually did rank
Speaker 1: significantly higher. So why don't we go to some of
Speaker 1: those with monitoring frameworks? And this actually piggybacks onto what
Speaker 1: we were just talking about, which was, you know, data
Speaker 1: and how we go about measuring things. That was one
Speaker 1: of those areas we actually saw a pretty high score,
Speaker 1: so it was eight out of ten. Why are monitoring
Speaker 1: frameworks getting an eight out of ten? And why is
Speaker 1: this potentially one of the bright spots in the upcoming
Speaker 1: Biodiversity Cup meetings.
Speaker 3: Behind the scenes of these cop meetings there is intercessional
Speaker 3: meetings where all these parties negotiate through the year on
Speaker 3: difficult technical issues. One of them less headline grabbing than
Speaker 3: money of the others are these monitoring and report frameworks.
Speaker 3: And over the last two years the parties to the
Speaker 3: CBD have ironed out almost all the details behind the scenes,
Speaker 3: so essentially they'll be rubber stamping the final document with
Speaker 3: only a few things to agree. Much of the architecture
Speaker 3: on reporting and monitoring was already built over the last
Speaker 3: ten years. While the twenty two itch targets were a
Speaker 3: complete failure with none of them being met, systems for
Speaker 3: parties to monitor biodiversity change and report their findings were
Speaker 3: set up well, so countries are well placed to agree
Speaker 3: on these things, so we're optimistic of a good outcome. Also,
Speaker 3: countries have nothing to lose. There's no point in disagreeing
Speaker 3: on a monitoring framework. Much more important is actually implementing
Speaker 3: policies that achieve those goals.
Speaker 1: So then let's talk about where the drama lies, the
Speaker 1: digital sequence information. Why is this likely to be really contentious?
Speaker 3: Well, first, the digital sequence information or DSi is a
Speaker 3: terrible name. It should just be called genetic resources. This
Speaker 3: is acknowledged by people working in that field. It's just
Speaker 3: hard now to rename it. When we say genetic resources,
Speaker 3: we say information from plant animal genetics that are then
Speaker 3: used in fields such as medicine or agricultural biotechnology. And
Speaker 3: it's a hugely profitable industry, with global revenues from DSi
Speaker 3: estimated at about one point five trillion per year, rising
Speaker 3: to almost two point three trillion by twenty thirty.
Speaker 4: The reason we're unlikely to see any breakthroughs here is
Speaker 4: that there's really no reason for these companies to be paying.
Speaker 4: The world has a very Victorian attitude to generate material.
Speaker 4: These companies and countries can benefit from genate resources collected
Speaker 4: from poor countries.
Speaker 2: At no cost.
Speaker 4: Really, what you have is companies that are basically privatized
Speaker 4: British museums of genate resources collected from other nations at
Speaker 4: various points in time.
Speaker 1: So let's talk about some of the different groups that
Speaker 1: are coming together. So beyond those who are involved with
Speaker 1: the actual negotiations at the real center of the meeting,
Speaker 1: there are some other stakeholders that really want to have
Speaker 1: a voice there. Some of those are businesses as we
Speaker 1: were just discussing and what they're actually getting from nature
Speaker 1: and biodiversity. And then there are Indigenous peoples who really
Speaker 1: do need to be represent and how is this being
Speaker 1: incorporated in and the term is Indigenous Peoples in Local
Speaker 1: Communities iplcs. How are they featuring at this year's.
Speaker 3: Cop Indigenous peoples and local communities are the most effective
Speaker 3: custodians and stewarts of biodiversity, yet they're often excluded from
Speaker 3: negotiations or marginalized. One breakthrough in twenty twenty two in
Speaker 3: the GBF was to include them in negotiations and make
Speaker 3: sure that marginalization didn't happen. But the issue is clouded
Speaker 3: by every representative of iplc's having a different view on
Speaker 3: how they should engage, what their representation should be, and
Speaker 3: that leads to protracted negotiations, limiting the chance of anything
Speaker 3: actually occurring. So participants in Cali will negotiate on behalf
Speaker 3: of IPLCS, A lot of opinions will be exchanged, but
Speaker 3: there won't be very much concrete progress on actual finance
Speaker 3: for iplcs or including them in negotiations.
Speaker 1: So one of the things you said at the beginning
Speaker 1: of the show was that there is even more business
Speaker 1: interest on what's happening in biodiversity. Some might say that
Speaker 1: this is an acknowledgment of how important biodiversity is to
Speaker 1: everyone on this planet, businesses by extension, But really, how
Speaker 1: are businesses and companies and the financial sector really approaching
Speaker 1: this and how are they thinking about it? Basically, why
Speaker 1: are they showing up in person for this next set
Speaker 1: of CUP meetings.
Speaker 2: Sure?
Speaker 4: So, I think for many businesses, they started paying attention
Speaker 4: around the time of the Global Wide Diversity Framework, either
Speaker 4: they arrived in Montreal for the first time or they
Speaker 4: started paying attentions as soon as that agreement was reached.
Speaker 4: So both for business and financial institutions, I've kind of
Speaker 4: noticed these two or three stages of their engagement back
Speaker 4: then two years ago. You know, they were really attracted
Speaker 4: to the promise of the new financial products and markets
Speaker 4: to support that nature restoration. There might be new revenue
Speaker 4: opportunities in this space. I think over the last twelve
Speaker 4: months or so, a lot of that attention actually shifted
Speaker 4: away from opportunities toward risk, and that's with the rise
Speaker 4: of the Task Force on Nature Related Financial Disclosures t NFD,
Speaker 4: CSRD and EEDR I mentioned before, and that pivot to
Speaker 4: nature risk within their portfolio and their supply chain. I'm
Speaker 4: now starting to see science that they're starting to think
Speaker 4: about opportunities again, but this time it's within their portfolio.
Speaker 2: So moving toward similar.
Speaker 4: Framing to how we think about low carbon or climate
Speaker 4: finance and transition, where the bulk investment in that space
Speaker 4: involves doing less harm building solar instead of building fossil
Speaker 4: fuel plants. It's rather than undoing the harm through carbon removal.
Speaker 4: So actually in Knights you've got this discussion at the
Speaker 4: moment between nature positive activities, the equivalent of carbon removal
Speaker 4: and just doing less harm. And I think that that's
Speaker 4: where we're starting to say some more interest.
Speaker 1: So since you brought up solar farms, this then brings
Speaker 1: up the important interplay between the climate and biodiversity COP
Speaker 1: and how these conversations are increasingly featuring at one another.
Speaker 1: At last year's Climate COP in the United Arab Emirates,
Speaker 1: there were dates that actually featured these same topics and
Speaker 1: additionally upcoming in Baku, Azerbaijan, there were days at the
Speaker 1: end of the agenda, so they're not in the first
Speaker 1: couple of days, but they are still featuring some of
Speaker 1: these same topics. To what degree is their communication across
Speaker 1: these different parties and some degree of alignment.
Speaker 3: The interplay between climate and nature is well understood by
Speaker 3: academics on the business world. There's some mutual dependence between
Speaker 3: nature and climate. When we have increasing climate change that
Speaker 3: reduces resiliency and biodiversity. Less biodiversity makes it harder for
Speaker 3: ecosystems to sequest the carbon So across different spheres of
Speaker 3: the economy and the academia, there is acknowledgment that there
Speaker 3: needs to begned more alignment between these two cops. However,
Speaker 3: it's difficult in practice. The way the two conventions are
Speaker 3: set up makes it hard for them to integrate into
Speaker 3: one another. But there has been very high level engagement
Speaker 3: on this. There's a joint statement at COP twenty eight
Speaker 3: and the coming Montreal Biodiversity COP showing that we need
Speaker 3: more alignment between the two. The president of COP sixteen,
Speaker 3: who is the Colombian Environment Minister, has said that its
Speaker 3: termission to ensure that the outcome of this COP is
Speaker 3: better alignment. However, we don't see any concrete outcome based
Speaker 3: on difficulties and integration.
Speaker 4: You're right, we're going to see biodiversity in nature come
Speaker 4: up again in Baku, but I think even more so
Speaker 4: next year as we go into Brazil. Be thing for
Speaker 4: Brazil's likely the deforestation clearly relevant to this space. Brazil
Speaker 4: is the most valuable eco system service market in the
Speaker 4: world through resources like the Amazon Basin and the Atlantic forests,
Speaker 4: so there's going to be more discussion in this space
Speaker 4: and convergence of issues. I think there is a propose
Speaker 4: out there to merge the COPS together, not sure whether
Speaker 4: how how far that will go. We also know that
Speaker 4: from a corporate reporting standpoint, these issues are likely to
Speaker 4: merge together. The TNFD will over time be integrated into
Speaker 4: global reporting standards.
Speaker 1: So the Brazil Climate focused COP that will take place
Speaker 1: as the COP thirty coming up in November of twenty
Speaker 1: twenty five is definitely one that many in the climate
Speaker 1: space are thinking is going to have a much bigger impact.
Speaker 1: Will be halfway through this decade, headed to twenty thirty,
Speaker 1: where there are so many different benchmarks that people are
Speaker 1: looking towards. Do you expect to see a similar important
Speaker 1: COP coming up next year in the biodiversity space or
Speaker 1: is there a year that we're looking towards where you
Speaker 1: anticipate a lot of this focus around twenty thirty Because
Speaker 1: we can't wait till we get there, we'll actually start
Speaker 1: to feature in this benchmarking will really take place in.
Speaker 3: That you mentioned Baku, because early signs point to that
Speaker 3: also being the host of the next COP, which will
Speaker 3: be in twenty twenty six, COP seventeen. That will be
Speaker 3: much more meaningful and impactful than Cali's version because it's
Speaker 3: slated to be a global stock take. It will measure
Speaker 3: how far progress is on achieving the Global Biodiversity Framework goals,
Speaker 3: unlike this year where it's simply a status check. Where
Speaker 3: are countries with their national plans? Who is submitted and
Speaker 3: who hasn't, how are our reporting frameworks and have we
Speaker 3: made any progress on finance? Those aren't concrete measurements of
Speaker 3: where we are on global biodiversity, just are we well
Speaker 3: prepared to start addressing it.
Speaker 1: It's right around the corner. Both of you will be
Speaker 1: closely watching what happens during COP in Cali. Will you
Speaker 1: be there and what sorts of activities do we BNF
Speaker 1: have to play?
Speaker 4: Yeah, we will be there, so both Bloomberg and BNF
Speaker 4: are sending a delegation there. We have a number of
Speaker 4: events and report releases planned there covering nature, risk, investment
Speaker 4: opportunities in this space, biodiversity, finance, importance of water. We
Speaker 4: will have a WODE online hopefully by the time this
Speaker 4: podcast is listened to, but if not, email your BNF
Speaker 4: rep or BNF cop at Bloomberg dot net to find
Speaker 4: out more and enjoying those meetings, and we'll also be
Speaker 4: reporting on progress as it happens, so well to watch
Speaker 4: out for research both during and after biocop.
Speaker 1: And Kelly, Well, let's close today's show with some facts
Speaker 1: that people just need to know in order to really
Speaker 1: be conversant in this space. What are some of the
Speaker 1: main things that come to your mind that you think
Speaker 1: everybody should know about biodiversity.
Speaker 3: Anyone who spend time in this nature and biodiversity space,
Speaker 3: be they academics or business representatives, will have heard the
Speaker 3: phrase fifty percent of economic value generation is dependent on nature.
Speaker 3: But that's untrue. The actual statistic is fifty percent is
Speaker 3: moderately or highly dependent. We far prefer to say all
Speaker 3: economic value generation is to some extent dependent on nature
Speaker 3: and biodiversity. We recently profiled a large cohort of agrifood
Speaker 3: companies and where they stand on nature and biodiversity, and
Speaker 3: the conclusion was quite surprising. Approximately ninety percent of them
Speaker 3: acknowledged biodiversity in that and you're reporting, while only ten
Speaker 3: percent to actually investigate the risks and opportunities that are
Speaker 3: associated with that.
Speaker 1: So there's one more that I'd love for you to
Speaker 1: bring into the conversation, which I found really astounding and
Speaker 1: has gotten a bit of press the last couple of weeks.
Speaker 1: That's around biodiversity loss. Where are we at in terms
Speaker 1: of global biodiversity and wildlife populations.
Speaker 3: One of the most famous statistics and ways of monitoring
Speaker 3: biodiversity loss is the Zoological Society of London and WWF
Speaker 3: Living Planet Index, and that shows that since a baseline
Speaker 3: year in nineteen seventy, average vertebrate species populations have declined
Speaker 3: by seventy three percent, which is an extraordinary reduction. One
Speaker 3: more concerning figure might be the newly released Planetary Boundaries
Speaker 3: Health check that was released at New York Climate Action
Speaker 3: Week a couple of weeks ago. It founder of nine
Speaker 3: planetary boundaries, which are measurements to show whether Earth systems
Speaker 3: are able to continue at a healthy level. Six have
Speaker 3: been crossed, although it's almost seven now. That's extremely concerning
Speaker 3: for biodiversity loss and nature loss globally.
Speaker 1: And where does that research come out of.
Speaker 3: That research comes from Professor Johann Rockstrom at the Potstam
Speaker 3: Institute for Climate Impact Research.
Speaker 1: If that is not a stark number to inspire some
Speaker 1: action and hopefully some very inspired conversations at Copp and KLi,
Speaker 1: I don't know what would Hugh Alstar, thank you very
Speaker 1: much for joining today.
Speaker 2: Thanks title, Thanks Stana.
Speaker 1: Today's episode of Switched On was produced by Cam Gray
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