How to invest in a nature-positive future? | UNEP Finance Initiative

“The future enters into us, in order to transform itself in us, long before it happens,” wrote Rainer Maria Rilke — an Austrian poet — a century ago. It marks the feeling at the start of a century, where the trajectory is yet unclear, where there is often upheaval and a general sense of unfamiliarity.Today, in a very different century to the one that preceded this, I take comfort in his words whilst I feel the ground shifting under me. A net-zero, nature-positive and just society might feel miles away, yet the seed of change already inhabits us. Our actions today will mark the 21st century. We are laying the foundation for the second half of the century where economy and ecology are expected to be in balance. We are also the last generation who can help correct our planet’s trajectory. Towards a nature-positive economyIn this blog post I want to address what constitutes a nature-positive future, why nature loss is an economic problem and what actions asset managers can take. ‘Nature-positive’ can be considered a global goal to halt and reverse nature loss by 2030 and achieve full recovery by 2050. Several organizations are working to understand its meaning in the business context and to provide additional guidance to set targets. Financial institutions can transform their portfolios by engaging with their clients and re-orientating investments to support the urgent need to halt and reverse nature loss by 2030.Until recently, nature was associated with fuzzy animals, and philanthropy efforts. And although messages such as ‘we are losing nature at an alarming rate – the WWF Living Planet Report estimated a 69 percent average decline in wildlife populations since 1970’ help to raise attention, they often don’t help in catalysing action. It is a classic tragedy of the commons, nature has been a massive all-you-can-eat-buffet that has been feeding our economies. But this is changing for three reasons – greed, business management, and outside pressure. I will take you through each one.Greed is good, and although much has changed since Gordon Gekko’s infamous quote in 80’s movie, Wall Street, investing in nature is a business opportunity. According to the WEF, ‘nature-positive’ solutions can create 395 million jobs and $10.1 trillion in additional revenue by 2030. For example, in Indonesia crop yields increased by 60% on average via smart farming utilizing sensors and satellite imagery. In Viet Nam, people in coastal areas saw they income more than doubled after the restoration of critical mangroves. This excludes possible government actions to shift subsidies from nature-negative towards nature-positive.

According to the World Economic Forum, ‘nature-positive’ solutions can create 395 million jobs and $10.1 trillion in additional revenue by 2030.

The economy is a subsidiary of the environment – and not the other way around – in this sense managing nature-related risks means managing your business. No apples without pollination, no scuba diving without reefs, let alone risks related to new regulation or consumer preference. Identifying, assessing, developing targets, acting and monitoring are the steps required by any organisation to manage their impact and dependency on nature and understand how this translates into both risks and opportunities.Following the Kunming-Montreal Global Biodiversity Framework we expect more rather than less regulation, with countries like France leading the way with their article 29 law, which requires French financial institutions to disclose their strategy for reducing biodiversity impacts. We are also seeing standard-setting bodies such at the International Sustainability Standards Board (ISSB) are already looking into how to incorporate nature in their standards. And central banks and other financial regulators are looking at nature risk via reports mirroring DNB’s ‘Indebted to Nature’, in the wake of leadership from the NGFS. This pressure is expected to mount in the next years.

Asset managers who act now can profit from first-mover benefits, be recognized as a leader or benefit from support from organisations like UNEP FI.

But more importantly – which goes back to my introduction, a nature-positive approach helps them incorporate the future that is already embedded in them. Our future is green, it is your role to manage the paint work! aboutRomie Goedicke-den Hertog co-heads the nature thematic at the UNEP Finance Initiative. She also leads the work on nature-related risk and disclosure, and manages the work on mainstreaming and capacity building. In this ways she supports the work on alignment of financial flows with the goals of the GBF. Romie joined UNEP FI in 2021, prior to joining she led the work of financial sector and business engagement at IUCN Netherlands. Romie is an experienced senior program manager, with a demonstrated history in managing programs on nature and finance in Asia and Africa. She is passionate about nature and committed to the role that innovation and collaboration can play in creating shared solutions for nature and finance. All opinions expressed are those of the author and/or quoted sources. investESG.eu is an independent and neutral platform dedicated to generating debate around ESG investing topics.