This text is sponsored by Pure Strategies
Although half of worldwide GDP is reliant on nature, more funds are directed to environmentally harmful subsidies (PDF) than is spent on protecting the character needed for business and humanity. Despite growing interest from corporations to fund interventions for climate strategies and business resilience, the private sector accounts for under 14 percent of current spending on nature-based solutions.
Company funds will be directed to support modern projects, technologies and policies for biodiversity conservation and fill the financial gap of about $598 billion to $824 billion needed per yr globally for the protection of nature. Timing is prime for businesses to tackle greater funding and collaborative leadership roles, but scaling private support to the extent needed for effective outcomes would require good decisions and constructing on best practices.
Latest drivers for corporate funding emerging
Corporate funding of conservation organizations has traditionally focused more on general support and a philanthropic strategy. This has been shifting as corporations establish climate targets, determine supply chain goals and search for more specific nature interventions to interact in with partners.
There may be growing momentum for these public-private partnerships to be much more project-focused while addressing the impacts and opportunities of companies. Driving this transition, partially, is the progress underway through a series of biodiversity-related international events and activities which can be engaging the private sector.
Key amongst these developments is the UN Convention on Biological Diversity’s Global Biodiversity Framework which envisions that “by 2050, biodiversity is valued, conserved, restored and correctly used, maintaining ecosystem services, sustaining a healthy planet, and delivering advantages essential for all people.”
As this framework moves toward agreement by quite a few governments later this yr, the role of business in realizing the vision could have more emphasis than ever before. This features a call for businesses to explore and report their dependencies and impacts on nature, and to take appropriate motion to avoid, reduce, restore, regenerate and transform these impacts. Implementation of the framework may also discover greater opportunities for personal sector to take a position directly in nature.
One other opportunity for business stems from the Taskforce on Nature-related Financial Disclosures (TNFD), which recently released its beta version of a disclosure framework. This framework, aligned with the Taskforce on Climate-related Financial Disclosures, offers guidance and analytical support on documenting nature-related risks and opportunities. The TNFD goals to assist shift corporate finance from damaging nature to investing in a future that’s “nature-positive” for humans and the planet.
Further, the Science Based Targets Network, an initiative parallel to the Science Based Targets initiative for Climate, is developing guidelines for corporations to evaluate their business-related impacts on nature and prioritize actions that may improve conditions for biodiversity and ecosystem services.
Five key learnings for corporate funding of nature projects
Firms seeking to fund and scale nature projects will wish to have in mind that these efforts require some unique considerations to be effective. As corporate engagement has increased directed giving to non-profits, the next lessons have emerged:
- Place-based solutions: Businesses’ relationship to nature is connected to specific locations, from geographic sources of raw materials to operation facilities and downstream use sites. Nevertheless, studies indicate that knowing where businesses have impacts is a critical gap; lower than 20 percent of corporations know where their raw materials are sourced. Businesses need to interact with the worth chain to know the locations of impacts and use exinternal or industry-level data to fill the gaps. This key step in identifying physical locations of dependence and impact along the worth chain may help with prioritizing actions to cut back impacts and support nature.
- Intersectional strategies: Funding effective projects and interventions will be channeled in ways in which enhance and restore the ecologicalphysical and social elements of actual the physical locations that companies depend on for products, services or resources. This also increases resiliency in the availability chain. Quite a few tools can be found to be sure that social considerations are followed. These include ethical instruments, reminiscent of the Union for Ethical Biotrade (UEBT), and standards, reminiscent of the Social and Environmental Standards developed under the United Nations Development Programme. Natura & Co, for instance, partners with UEBT to support the corporate’s work with communities and conservation projects within the Amazon.
- Community engagement: It’s critical to work with, learn from and empower the local communities and Indigenous peoples who reside inside and near the areas that a business impacts across its value chain. It has been shown that these communities have an extensive role in taking care of a few of the world’s most precious natural resources. Without their partnership, the lasting effects of a project will be compromised and overall impact diminished. Starbucks, for instance, is working with farmers in its coffee-sourcing regions to cut back water pressures on communities.
- Consider the long-term: It takes several years to evaluate needs, get a project off the bottom and realize results. Thus, projects need long-term, multiple-year commitments for financial stability and ongoing management success. Along with funding a project over multiple years, an organization may consider working with a consortium of organizations to construct on collective strengths, knowledge and networks. For instance, partnerships with other investors and institutions who’ve relevant experience can provide leverage and opportunity for scaling up, reminiscent of the Forest Solutions Group inside the World Business Council on Sustainable Development which focuses on the sustainability of working forests.
- Criteria-driven decision-making: Deciding on which organizations to partner with and what projects to support will be enhanced by establishing requirements or criteria for screening and evaluating options. Some inquiries to guide strategic considering could include: What are the goals of funding? What outcomes are desired? Are they measurable and tracked through the project? Is the project within the intended geographic location? Does the organization have the expertise needed, and are they working with local partners and communities? Decisions will be managed internally or with external support, reminiscent of One Percent for the Planet, a process that helps businesses improve the efficiency and efficacy of their financial and other contributions to conservation.
While more corporations are engaging in conservation and nature projects, there continues to be a big gap in funding. The emerging drivers are more likely to bring more interest from corporations and it should be vital to scale up actions this to assist address global challenges with protecting nature. To achieve success, corporations can leverage existing best practices to support meaningful place-based projects that progress towards a nature-positive future.
