Climate change is one of the main drivers of biodiversity loss – and is becoming an increasingly urgent crisis for the planet.
The biggest threat to biodiversity loss stems from human activities, such as land use change causing destruction to ecosystems and habitats. 14% of this global loss is directly attributable to climate change and pollution, with some models predicting that this will become the primary cause in the coming decades. Despite statistics highlighting the urgency for action, corporate standards and disclosures are yet to match this urgency and take responsibility to address biodiversity loss.
This article covers:
What is COP15 and why is it important?
The United Nations Biodiversity Conference, or more commonly known as COP15, is being held in Montreal, Canada from December 7th - 19th 2022. The conference, which occurs every two years, brings together governments and policy makers to discuss the world’s biodiversity in an aim to conserve and protect its critical function.
This year’s conference is of particular importance as it follows closely behind COP27. The conference, held in Sharm El Sheikh, produced a mixed set of outcomes including a proposed “Loss and Damage” fund agreement. The fund proposes financing from rich nations to compensate poorer nations for damage and economic loss caused by climate change – but the key issues surrounding the financing responsibilities and metrics have been postponed to next year’s COP28.
The main objective at COP15 will be to agree on the Post-2020 Framework to protect biodiversity. The framework aims to define a set of targets and an ambitious plan to minimise and slow the rate of loss by 2050. With previous years’ conventions failing to agree and implement proposed targets, it is crucial that financial leaders steer the economy towards a set of measurable regulatory outcomes in order to protect the globe from further loss.
The link between climate change and biodiversity loss
Climate change is a key driver of biodiversity loss. It’s important to note that the term “biodiversity” is not limited to species, but extends to ecosystems and habitats such as oceans and land. These habitats play a vital role in our ecosystem by acting as natural carbon sinks, and storing up to half of all carbon caused by human activities. The impact of biodiversity and habitat loss result in a reduced ability to store atmospheric carbon – thus increasing the global concentration levels. This synergy between biodiversity loss and climate change exists in a two-way process; restored and protected ecosystems can help aid climate change through carbon storage and sequestration, while the destruction and loss of these systems poses a detrimental threat to our climate and inevitably life on Earth.
It is imperative that any individual, business or government committed to combating climate change acknowledges the synergy between biodiversity loss and climate change. Businesses with existing carbon reduction strategies should utilise the opportunity to leverage off their current data and consider nature within their value chains, as measuring this will enable more accurate biodiversity disclosures. Tackling these issues separately may seem like an effective short-term solution – but will inevitably send us backwards in the climate change journey if it remains the status quo.
The urgency for a biodiversity accounting framework
It is clear that these issues must be tackled together - but what steps do we need to take to get there?
The interrelationship between business, biodiversity and climate change is fundamentally linked across many sectors. The main drivers impacting biodiversity loss stem primarily from land use and waste generation as a direct result of business activities. Indirect effects occurring along the supply chain through the sourcing and manufacturing of goods and services pose an even greater threat due to the difficulty in traceability of activities, making it even more challenging to measure these effects. As with calculating carbon emissions, biodiversity will need to take some lessons from the advances of carbon accounting to devise a standard that allows corporates to measure and estimate their supply chain biodiversity impacts accurately. Without the implementation of a governing framework, it will continue to be near impossible to measure and quantify the impact corporate activities have on our ecosystems. A robust framework would serve for businesses and communities to align to a common shared goal and set of metrics. Increased reporting and disclosure requirements would help to provide the clarity and guidance to turn commitments into action and would also serve to penalise those not in alignment through the use of biodiversity litigation and tax schemes; as similarly seen in the carbon market.
The drive from companies to report on and disclose biodiversity commitments has been published by CDP, who revealed that almost half of companies are already considering biodiversity in their corporate strategies, by making commitments and putting governance mechanisms in place. But the data suggests that the majority of these companies are not translating these commitments to actions, with 55% failing to take action in progressing these commitments. The assessment sends a strong signal to policy makers ahead of COP15 and demonstrates the corporate readiness for mandatory disclosure requirements.
Looking ahead to a mandated world of biodiversity disclosures will come with its challenges. The lack of data availability will create a significant hurdle for businesses to report and measure their progress. If we are to measure progress against an internationally recognised set of metrics, it is imperative that corporates have access to record management systems that assist in the collection and quantification of data points. The synergy between the impacts of carbon and biodiversity mean that, in order to manage impact, it is crucial to measure the relevant footprints of both. Quantified data can then be used in dual scenario modelling for both carbon and diversity, to prepare and navigate future states.
COP15 and the Global Biodiversity Framework
In December 2022, governments and parties will meet with the intention to refine and cement the post-2020 global biodiversity framework, which is commonly referred to as being the “Biodiversity Paris Agreement” equivalent. The draft framework follows the failure of the Aichi Biodiversity Targets, which despite being established and adopted worldwide at COP10, were collectively failed by governments when not a single target had been met. The latest framework, which was first drafted in 2021 by the Secretariat of the Convention on Biological Diversity (CBD), sets out to reverse biodiversity loss by 2030 and with an overall vision to ‘Live in Harmony with Nature’ by 2050. The draft is currently built around a set of 22 targets and 10 “milestones” to achieve this goal, however much of the text in the draft remains “bracketed” as it is yet to be agreed between parties. Pressure will be placed on COP15 to reach a consensus and close the brackets in order to finalise the framework.
In particular, Target 15 of the draft framework will be closely observed by over 330 signatories who support the “Make it Mandatory” campaign. The campaign, which has been supported by more than 330 business and finance institutions, was launched earlier in the year, and calls on Heads of State to adopt Target 15 at COP15 in Montreal this week.
While the headlines may be heavily focused on the discussions surrounding the finalisation of the Global Diversity Framework, other key areas of interest are expected to be negotiated at the event, such as:
While the message on biodiversity is clear - we know it is a matter of crisis that must be urgently addressed and committed to take action on. Biodiversity loss is only one piece of the puzzle in the journey to combatting climate change, and an opportunity exists for corporates with established carbon reduction strategies to expand their remit to include biodiversity.