At this moment, it’s critical for businesses to embrace nature-based solutions alongside technological ones, to ensure a credible and impactful path to net-zero, says Maria Mendiluce, CEO, We Mean Business Coalition.
Top of the COP: Nature & Land UseIt's Nature Day at COP26 and the message is beginning to ring louder that reversing nature loss by 2030 is a requirement for net zero by 2050.
- After the first week of COP26, government commitments amount to closing the emissions gap for 1.5°C of warming by around 9 gigatonnes per year (if fulfilled) – leaving around 13Gt to go, according to new analysis by the Energy Transition Commission. The Glasgow Leaders’ Declaration on Forest and Land Use to protect forests and transition to sustainable land use would account for the biggest chunk of that reduction – 3.5Gt. The declaration was signed by 134 countries covering more than 90% of global forests.
- At the same time, the financial sector has stepped up to protect forests. Thirty-three major financial institutions with US$8.7 trillion in assets under management this week committed to phase deforestation driven by agricultural commodities out of their commodity portfolios by 2025.
- Recognizing their central stewardship over forests and nature, $1.7 billion of financing is going to support Indigenous Peoples and Local Communities from 2021 to 2025, pledged from two dozen countries and foundations. The aim is to advance forest tenure rights and recognition of their role as guardians of forests and nature.
- A newly launched nature-based solutions online investment platform pilot, launched by Capital for Climate, will act as a guidance system to help institutional investors understand why and how to approach allocation of their capital towards nature-based solutions to climate change. This is likely to be of particular interest to investors that have committed to reach net-zero emissions before 2050, including the more than 400 financial institutions with over $130 trillion in assets under management that are members of the Glasgow Financial Alliance for Net Zero.
- The Forest Agriculture Commodity Trade (FACT) dialogue, chaired by the UK and Indonesia over the past year, has produced a roadmap identifying four areas of work for trade and market development, smallholder support, traceability and transparency, and research, development and innovation. The dialogue brought together 28 of the largest consumer and producer countries of beef, soy, cocoa and palm oil.
- Nearly 100 corporations will today talk about their commitments to halting and reversing the decline of nature and getting nature positive by 2030 – as part of a growing movement of companies joining Science Based Target for Nature. Luxury fashion brand and Race to Zero member Burberry also announced a strategy today to protect, restore and regenerate nature, including by expanding support for farming communities.
- The UK COP26 presidency today launches an action agenda for the transition to sustainable agriculture for healthy diets and resilient livelihoods. The agenda will focus on actions and investment through public policies, research and innovation needed to cut CO2, reverse nature loss and build resilience in agriculture and food systems. The UK Policy Action Agenda event takes place between 12:00 and 13:30.
- The Good Food Finance Network is today releasing a list of 14 tools, strategies and policies where innovation can drive finance towards healthy, sustainable food systems – from new ways of measuring finance and assessing land value, to tax and debt relief. This will be followed by finance mobilization in early 2022.
- The Regen10 Coalition, launched this week, aims to boost regenerative and resilient food systems so that by 2030 half the global food production is made in a way that benefits people and the planet, and places farmers at the heart of the transition.
The Emissions Gap Shrinks – If Commitments Are Met
Keeping 1.5°C alive: To keep the 1.5°C warming limit within reach, annual CO2 emission in 2030 need to be about 22Gt lower by 2030 than government pledges prior to COP26 would have led to, the ETC finds. After a week in Glasgow, new public and private commitments have reduced the gap by around 9Gt, to 13Gt. In addition, commitments to cut methane would cover one-third of the 40% reduction needed by 2030.
Out of the 9Gt per year, the biggest chunk – 3.5Gt – comes from the leaders’ declaration on forestry and land use. Another 3Gt comes from new Nationally Determined Contributions, 0.2 from the global coal to clean power transition statement, and 2.5Gt from business and finance sector commitments including under the UN-backed Race to Zero.
Declaration on Forestry and Land Use: Leaders whose countries hold 90% of global forests pledged this week to conserve forests, facilitate trade that promotes sustainable development, and reduce vulnerability, build resilience and enhance rural livelihoods – among other things.
Resilient Food Systems
Good Food Finance Network: The network is today releasing a list of 14 areas in which innovation can allow governments, businesses and investors to realign, mobilize and mainstream investments that add sustainable value to food systems – instead of depleting it. These are financial instruments, business strategies and enabling policies, and they point to new ways of using data; measuring financial return that values benefits to nature, society and sustainability; and de-risking finance for resilience. In 2022, the Good Food Finance Network will work with finance ministries and the private sector to detail instrumentation plans for major sustainable finance commitments. This comes after the network launched in September to convene leaders from the public, private, and multilateral finance sectors.
Regen10 Coalition: The coalition will work with over 500 million farmers to apply regenerative production methods and transform agricultural systems. It wants to ensure that by 2030, roughly $60 billion per year is put into financing the transition and more than half the world’s food is produced in a way that benefits people, nature and the climate. To get there, Regen10 aims to 1) enable a global farmer community to shape the transition; 2) establish harmonized definitions, outcomes and metrics in order to measure and accelerate progress; 3) develop and enable economic transition pathways to regenerative food systems. It intends to deliver a first wave of interventions from farmers by COP27.
→Why it matters: Food systems currently generate $12 trillion a year in hidden costs compared to $10 trillion in economic value (Food and Land Use Coalition). This exacerbates climate change, biodiversity loss and the spread of zoonotic disease. With multiple pledges for funding being made to transform food systems, and with net-zero commitments multiplying, there is a dramatic growth in demand for sophisticated instruments that can deploy funds with impact.
UK Policy Action Agenda: A group of countries have pledged to support a policy action agenda for a just transition to sustainable food and agriculture, developed by the COP26 presidency, the World Bank and the Just Rural Transition initiative. The agenda sets out pathways and actions that countries can take to repurpose public policies and support to food and agriculture to enable a just rural transition. The event takes place between 12 and 13:30 today.
→Why it matters: Countries provide more than $720 billion per year to their agricultural and food sectors through direct subsidies, price supports, tariffs, import quotas, and other policy measures. Nearly 75% of this support goes to individual producers and about 14% to public services like research, environment, or food safety. Only 5% of direct public support explicitly targets conservation and other public goods.
Money for Nature
Support for Indigenous Peoples and Local Communities: Two dozen countries and foundations this week pledged $1.7 billion of financing from 2021 to 2025 to help advance forest tenure rights for Indigenous Peoples and Local Communities, and recognition of their role as guardians of forests and nature. They also called on other donors to join in. The money will go towards: 1) channelling support to indigenous peoples and local communities, including through capacity-building, governance structures and management systems; 2) working to secure, strengthen and protect their land and resource rights, including by mapping and registering tenure rights; 3) supporting national land and forest tenure reform processes.
→Why it matters: As much as 65% of global land is community land, supporting over 2 billion people, including 370 million to 500 million indigenous peoples. Yet only 10% of land is recognized under national laws as belonging to Indigenous Peoples and Local Communities. Community land is under growing threat from companies and investors scrambling to acquire acreage for investment purposes and industrial agriculture and from illegal activities like logging, mining, and hunting. The IPCC has made clear that tapping into indigenous and local knowledge and recognizing their rights, governance systems and laws is central to adapting to climate change, mitigating it and advancing sustainable development.
Nature-based solutions online investment platform pilot: This online platform, launched in pilot form at COP26, will help institutional investors understand opportunities to actualize their commitments to net-zero emissions at least in part through capital allocations that benefit nature, the climate and people. This nascent tool, developed by Capital for Climate in coordination with the High Level Champions, aims to fill a void at the intersection of nature and finance and is designed to demystify the landscape of opportunity for investing in nature-based solutions, including regenerative and sustainable agriculture and forestry.
Agricultural commodity-driven deforestation-free finance: 33 financial institutions with $8.7 trillion in assets under management will work to phase out deforestation impacts across investee supply chains for palm oil, soy, beef, and pulp and paper by 2025.
→Why it matters: The world needs to close a $4.1 trillion financing gap in nature by 2050 in order to reach net-zero emissions (UN Environment Programme). Investments in nature-based solutions currently amount to $133 billion, most of which is public money. But in a decarbonized and resilient economy, incentives and risk management will have to align with decarbonization and resilience – and recognize risks posed by climate change (Marrakech Partnership’s Climate Action Pathway for finance).
Civil Society Speaks Up
- Civil society holds power to account at Destination 2030: Civil society representatives demanded true system change during the headline Destination 2030 event on Friday. “Net zero targets are meaningless to the suffering masses in the world,” said Tasneem Essop, executive director of CAN International. Clover Hogan, founder of Force of Nature, added: “Our anxiety stems not from the crises, but from our perceived inaction in the face of them.”
- Public participation issues still unresolved: UN Human Rights Special Rapporteurs sent letters to the UK COP26 Presidency and UNFCCC Executive Chair Patricia Espinosa demanding they “act urgently to guarantee meaningful participation.”
- Parents delivered a letter to COP26 President: In the biggest parent mobilization in history, a group of mums handed a letter to COP26 President Alok Sharma calling for an end to financing of all new fossil fuels to protect their childrens’ health. “Our children are being poisoned by toxic pollution from burning fossil fuels with every breath they take. That burning is also the key driver of the climate crisis, which is ruining our children’s futures and destroying our only home.” The Climate Coalition also released a film of parents expressing their concern.
Preserving nature is a key element in the world’s effort both to mitigate and adapt to climate change, and it also happens to be good for business. But new findings show that much of the private sector continues to lag far behind in tackling deforestation and protecting biodiversity.
At a London Climate Action Week event on 29 June, hosted by the UN Climate Change High-Level Champions, speakers highlighted the need and opportunities for private sector breakthroughs, the action delivered to date and the tools required to reach a net zero, nature positive future.
Here’s why investment by G20 economies in nature-based solutions needs to double by mid-century to help prevent an environmental crisis.