Following COP 15’s Finance and Biodiversity day, André Ranchin, Investment Consultant at Hymans Robertson, comments on how the finance sector can help achieve biodiversity goals:

“Following yesterday’s Finance and Biodiversity Day at COP15, it is even clearer that some of the key shortcomings of previous biodiversity frameworks were financial in nature, including a failure to align financial flows with activities that safeguard, rather than directly harm biodiversity. While regulations like the Taskforce on Nature-related Financial Disclosures (TNFD), go a long way to giving investors and financial institutions a useful way to not only report on but, also understand and act on their nature-related risks and opportunities, there needs to be more joined-up thinking that cannot be brought about by regulation alone.

“So, although the TNFD framework, which mirrors the Task Force on Climate-related Financial Disclosures framework (TCFD), should help to cement nature-related data and biodiversity metrics into the governance structures of all companies that have a requirement here. To make real-world progress on biodiversity related issues engagement is key. For example our own research showed that in private markets there is an engagement issue – with nearly half of Managers we requested climate related information from failing to respond. This lack of engagement from one group means another, in this case pension funds run the risk of not having the data they need to understand the environmental impact of their funds and or develop their TCFD reports.

“These are the kind of gaps that will only be filled by positive and proactive action from all of us in the financial sector. From that will come things like the development of more nature-focussed investment funds and the availability of standardised biodiversity data and metrics that institutional investors can use to set targets against and measure progress. It will also help to reach ambitious global and national targets – such as securing 30% of terrestrial and marine protected areas by 2030 – which cannot be achieved without significant investment from both the public and private sector. none of these issues can be solved in a day but, an open discussion with engaged representatives from around the world is a step in the right direction.”