As a pioneering player in the field of financing conservation and restoration of nature, Mirova played an active role at COP16¹ and the GIIN² Impact Forum, advocating for the need to develop tools and regulations aimed at directing capital towards biodiversity, as well as emphasizing the importance of multilateral actions by countries (North and South), and by public, private, and philanthropic financial actors.

 

Progress and Challenges: Towards Enhanced Mobilization for Nature

The 16th Conference of the Parties to the Convention on Biological Diversity (COP 16) took place in Cali, Colombia, from October 21 to November 1. The event highlighted notable advances in the fight for nature protection, while also raising significant challenges that remain to be addressed.

While significant progress has been made, the governments gathered to discuss nature protection have yet to resolve key issues, such as biodiversity financing and monitoring the objectives for the current decade.

Reminding that more than a third of tree species are threatened with extinction, Colombian President Gustavo Petro urged negotiators at the summit's opening to acknowledge the urgency of the nature crisis.

UN³ Secretary-General Antonio Guterres encouraged countries to engage society as a whole in biodiversity protection. Concurrently, cultural events and discussions took place in the summit's green zone, while the blue zone saw a growing diversity of participants. Protests from indigenous communities also marked the summit. Notable advances included the establishment of a fund to ensure these groups benefit from the profits associated with the commercial use of genetic information. Additionally, a set of principles to prioritize gender issues in conservation received widespread support, underscoring the importance of inclusivity in these discussions.

Despite these advancements, several developing countries expressed concerns regarding financing promises that have yet to be realized. They voiced their expectations regarding the need to accelerate discussions and make significant decisions. The summit has not yet established a clear strategy to raise the $200 billion⁴ needed annually to protect nature, and a detailed plan to monitor progress towards the set objectives has not been developed. Developing countries have suggested creating a new financing mechanism to distribute biodiversity funds, a proposal that warrants increased attention.

Observers noted that better leadership from wealthy countries could help strengthen the urgency needed during negotiations. While progress has been made, many participants believe that the summit could still advance to meet expectations regarding biodiversity protection.

 

Mobilization of Private Funding for Biodiversity at the Heart of Discussions

In a context where public funding, particularly from Northern countries, is constrained, the mobilization of private funding has taken a central place.

Different types of instruments and modes of intervention were discussed, particularly during events organized in the blue and green zones.

Biodiversity Objective Fund – On the opening day of the summit, a consortium of 11 institutional investors – Abeille Assurances (Aéma Group), BNP Paribas Cardif, BPCE Assurances, Caisse des Dépôts, CNP Assurances, EDF Gestion, MAIF, MACIF (Aéma Group), Malakoff Humanis, Société Générale Assurances, Crédit Agricole Assurances – together with Af2i, announced the selection of Mirova to manage the Biodiversity Objective Fund. With over 100 million euros and an initial duration of 5 years, this listed fund will primarily focus on small and medium-sized European companies, with a dual objective: to support companies transitioning to sustainable business models and to invest in innovative solutions for biodiversity preservation.

Environmental Market Instruments – During several events and in various publications, nature-based carbon credits and biodiversity certificates have emerged as a promising new financial instrument. Mirova sees real potential in these instruments to finance actions that lead to measurable improvements for climate and biodiversity. However, we emphasize the importance of ensuring high integrity standards and sufficient guarantees regarding both supply and demand. We believe that these instruments should support contributions to the restoration and protection of nature, rather than serve as compensation for damages caused. Reducing negative impacts on biodiversity must remain a priority.

We support the principle of a "fair contribution," proportional to the actual impacts of companies. This would encourage substantial funding for nature, backed by initiatives such as the Science-based Target Network.

“Nature and climate are two sides of the same coin. The experience shared at COP 16 among finance ministers, multilateral development banks, development finance institutions, and the private sector has underscored the immense value in accelerating progress on Global Biodiversity Framework targets 14, 15, 18 and 19^5”. Anne-Laurence Roucher, Head of Private Equity & Natural Capital, Mirova.

 

The GIIN Impact Forum

The teams at Mirova actively participated in the GIIN Impact Forum 2024, where they were able to share their expertise on the following topics:

How do innovative investment strategies in the fields of sustainable agriculture, forestry, and nature conservation promote the transition of value chains while aiming for environmental and social co-benefits?

How can the impact of private equity play a key role in financing companies that provide innovative solutions and technologies for both environmental and societal transitions?

 

What Horizon for Innovation and Growth in Nature Financing?

During a plenary session as part of the "Finance Day" at COP 16, where Anne-Laurence Roucher from Mirova spoke, the theme was the future of innovation and expansion in the field of nature financing. The speakers emphasized innovative approaches and tools to support investments in biodiversity and ecosystems. Topics discussed included biodiversity credits, investment performance indicators, and the financial viability of nature-related projects. There was also discussion about large-scale investments in ecosystems such as coral reefs and transboundary watersheds, as well as the continuum of capital needed for the expansion of biodiversity-related projects.

 

Promoting Public-Private Dialogue at COP 16

Mirova was part of a delegation of 70 representatives from financial institutions representing the Finance for Biodiversity Foundation (FfB) at COP 16. The delegation urged global leaders to implement the Global Biodiver at COP 16. The delegation urged global leaders to implement the Global Biodiversity Framework (GBF) and align financial flows to reverse the loss of nature  sity Framework (GBF) and align financial flows to reverse the loss of nature during this decade. A significant event brought together finance ministers and leaders of financial institutions for an unprecedented dialogue.

On October 28, they discussed the obstacles to advancing the Global Biodiversity Framework (GBF) and then focused the following day on solutions to promote positive financing for nature. The meetings, organized by the Finance for Biodiversity Foundation (FfB) and the Coalition of Finance Ministers for Climate Action (CFMCA), with the support of several international organizations, allowed participants to explore how the GBF can be integrated into national financial planning and the crucial role of finance ministries in integrating biodiversity into economic policies. As a follow-up, the Coalition network committed to strengthening the nature-related capacities of finance ministries, sharing best practices, and connecting the needs of countries with institutional partners. The FfB is also ready to collaborate to advance common biodiversity goals.

To support the work of the Advisory Committee of the CBD⁶ on resource mobilization, Mirova contributed as a lead of the working group on positive impact of the FfB to the publication of a report titled “Finance for Nature Positive: Building a Working Model.” In response to the need to mobilize all private funding to close the substantial financing gap for biodiversity, this report, co-authored with the PRI⁷, proposes a definition of investments with positive biodiversity impact as well as a typology of portfolios that investors can offer to achieve CBD goals, similar to climate trajectories. This typology is based on a mitigation hierarchy and includes strategies for exclusion, pressure reduction, restoration, and regeneration, as well as solutions.

Link: Finance for Nature Positive: Building a Working Model - Finance for Biodiversity Foundation

 

The IAPB⁸ Launches Its Framework for High-Integrity Biodiversity Credit Markets

The International Advisory Panel on Biodiversity Credits (IAPB) has published its Framework for High-Integrity Biodiversity Credit Markets, aimed at establishing a solid foundation to stimulate the necessary private and public investments for the conservation and restoration of nature. This Framework was launched by co-chairs Dame Amelia Fawcett and Sylvie Goulard, in the presence of the Environment Ministers of France and the United Kingdom, during an event at COP 16 in Cali, Colombia. After more than a year of work, this Framework aligns with Target 19 of the Kunming-Montreal Global Biodiversity Framework, adopted in 2022. It aims to channel funds for biodiversity preservation, encourage nature-friendly behaviors from private actors, and ensure fair incomes for those working on the ground. Among the key points, the development of high-integrity biodiversity credits and the expansion of these markets are deemed feasible. It is essential to respect the knowledge and values of those engaged in biodiversity protection. Biodiversity credits can be used for protection and restoration actions, as well as to finance local compensation projects under strict criteria. The IAPB rejects uncontrolled international compensation approaches, emphasizing the need for compensation at a local level and within similar ecosystems. An urgent collective commitment from all market actors is also required to accelerate the development of biodiversity credit markets.

 

Advocacy for Collective Actions for Biodiversity

At the GIIN Impact Forum and COP 16, Mirova highlighted existing solutions to its stakeholders for creating an attractive investment environment and unlocking the private financing necessary to make the economy more sustainable and contribute to the fight against climate change and biodiversity loss, particularly in the most vulnerable emerging markets:

• Structural policies aimed at addressing the specific needs of emerging markets and developing economies.
• Innovative financing solutions such as blended public-private financing, where public funding helps to de-risk private sector investments.
• Contributing to improving credit ratings and reducing the cost of capital, notably through the credit rating of blended finance vehicles.
• Investments in sustainable primary production projects, whether agricultural, fishery, or forestry, that allow for the protection and restoration of terrestrial or marine areas alongside primary production.
• Investments in companies providing solutions to biodiversity loss and climate change challenges.
• Carbon pricing can provide an important price signal for investors, but it faces political obstacles to its implementation at a sufficiently large scale.

COP 16 was a pivotal moment for biodiversity, revealing significant advancements as well as persistent challenges. Through its commitment and initiatives, Mirova has affirmed its role as a leader in sustainable finance. We remain determined to explore new investment territories and share best practices for environmental market instruments, thus contributing to a sustainable future for our planet.