It is essential that the role of business and finance in addressing biodiversity loss remains on the agenda at COP16.

The Biodiversity COP16 Summit will take place in Cali, Colombia between 21^st October and 1^st November 2024. Sonya Likhtman, Associate Director – Engagement at Federated Hermes Limited, sets out her expectations of policymakers and highlight the key developments to watch out for.

With biodiversity under severe stress from pressures including habitat destruction, climate change and pollution, policy makers and the private sector will be challenged to come up with plans to prevent further loss of critical species later this month at COP16 – a key goal of the Kunming-Montreal Global Biodiversity Framework (also called the Biodiversity Plan) agreed at the Biodiversity COP15 in 2022.

Governments are expected to submit their National Biodiversity Strategies and Action Plans ahead of the COP16 meeting, to clearly articulate their plans for translating the goals and targets of the Biodiversity Plan into policy, regulation, and action by all stakeholders at the national level.

Private sector attendance is also expected to be high, as companies and financial institutions increasingly recognise their role in halting and reversing biodiversity loss this decade. The sector will require clear policy signals to streamline and accelerate action on nature.

The COP16 summit presents a critical opportunity for governments, financial institutions, and other stakeholders to collaborate on implementing the Kunming-Montreal Global Biodiversity Framework, the outcomes will be pivotal in shaping the future of both nature and the global economy.

The role of business and finance in addressing biodiversity must stay centre stage

It is essential that the role of business and finance in addressing biodiversity loss remains on the agenda at COP16. A decrease in financial flows that are currently harming nature and an increase in financing for nature – goes to the heart of the transition required across sectors of the real economy. The goal should be to mitigate the negative impacts on nature currently caused by companies’ operations and supply chains and increase companies’ contribution to biodiversity protection and restoration. Financial institutions will address their nature-related risks and impacts through underlying changes at the companies they invest in or lend to.

Governments should enable and accelerate action from the private sector through measures^[1] including nature-related disclosure requirements, combined climate and nature transition plans, action by central banks and reform of subsidies and incentive structures to encourage and support companies to reduce their nature-related risks and impacts.

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Notes:
[1] https://www.financeforbiodiversity.org/wp-content/uploads/FfB_Aligning-financial-Flows-with-the-Global-Biodiversity-Framework_April2024.pdf

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