$1 trillion in public subsidies destroying nature, new book warns

The Little Book of Investing in Nature highlights opportunities to shift public and private investment to benefit nature

Governments, corporations and financial institutions must take urgent action to redirect capital to support nature according to The Little Book of Investing in Nature, a new publication by Global Canopy, that estimates that more than USD 1 trillion in public money is spent yearly on subsidising activities that are harmful to nature.

Launched as part of the One Planet Summit, hosted by President Emmanuel Macron of France, at the start of a key year for the natural world, The Little Book of Investing in Nature sets out the opportunities for finance to play its part in protecting the natural resources that underpin more than half of global GDP.

The book warns that even with increased investment from the private sector, we are unlikely to close the gap in funding for biodiversity, estimated to reach between USD 598 and 824 billion by 2030 without action to redirect the USD 1 trillion in harmful public subsidies.

Featuring more than 40 mechanisms designed to direct finance to protect biodiversity and 25 case studies with examples of these mechanisms in practice*, The Little Book suggests that a sector-wide shift away from harmful investments could transform protection of the natural world.

Andrew Mitchell, senior adviser to Global Canopy and a co-editor of The Little Book of Investing in Nature, said:

“Our natural world is in crisis and practical solutions are urgently needed. Current efforts to protect nature are being undermined by the scale of public and private money invested in activities that are harming nature. We are financing our way to extinction and The Little Book provides a simple guide to turning that around.”

Professor John Tobin, a fellow at the Cornell Atkinson Center for Sustainability at Cornell University and co-editor of The Little Book of Investing in Nature, said:

“We can finance our way back to a healthy planet, but this will mean re-thinking the rules for the finance sector. The current focus on short-term economic returns, to the exclusion of the impacts of any collateral environmental or social damage caused by investment activities, must be turned upside down. We need to develop and incorporate new metrics that recognise the value brought to us by nature – and real leadership by governments and financial institutions to drive this change through.”

With global leaders due to meet later this year in Kunming, China, for a UN summit to set out a “new deal for nature” including biodiversity targets for 2021-2030, The Little Book provides negotiators with a guide to potential finance.

Finance is a key issue for protecting biodiversity, and no country on Earth successfully delivered on the previous Aichi Biodiversity Targets for 2011-2020, partly due to the lack of resources needed to implement national biodiversity strategies.

The Little Book argues that a new approach is needed, redirecting both public and private finance to ensure that it delivers nature positive benefits – and without this change, we will destroy the natural assets we depend upon.

ENDS

*Examples of positive finance mechanisms featured:

• Governments in Switzerland and Kyrgyzstan have reformed agricultural subsidies to protect biodiversity.
• The French government issued the world’s first sovereign green bond in 2017, known as the Green OAT bond, with a value of USD 7.6 billion and a 25-year lifespan.
• The South African government launched the Fiscal Benefits Project to provide a tax incentive for landowners declaring their properties protected areas.
• Mirova, the asset management company dedicated to sustainable investing, offers a number of options, including the Sustainable Ocean Fund (SOF), operated in partnership with Conservation International and the Environmental Defense Fund to attract private investment in the sustainable ocean economy.
• Credit Suisse, in partnership with Rockefeller Asset Management, launched the Ocean Engagement Fund in September 2020 to address investment needs under Sustainable Development Goal 14. It seeks to proactively engage with portfolio companies to steer them away from practices that harm the ocean, and encourage projects that mitigate the effects of climate change and lessen biodiversity loss by targeting three key themes: ocean conservation, pollution prevention and carbon transition.
• The Indonesian Tropical Landscape Finance Facility (TLFF) is a multi-stakeholder partnership involving the UN Environment Programme, World Agroforestry (ICRAF) and private banks including BNP Paribas that provides a lending platform and grant fund to support projects related to sustainable agriculture and renewable energy.
• The Dutch retail bank, ASN, has created a Biodiversity Footprint for Financial Institutions
• (BFFI) methodology to measure the biodiversity impacts of its investment portfolio.

1. The Little Book of Investing in Nature, edited by John Tobin and Andrew Mitchell, is published by Global Canopy, January 2021. Global Canopy has been publishing the Little Book series, which includes some of the most widely read books in the area of sustainability and finance, since 2008.

See www.globalcanopy.org/LittleBookFinance

2. The Little Book of Investing in Nature was published thanks to the support of the Agence française de développement, Cornell Atkinson Center for Sustainability, Credit Suisse, IDH the sustainable trade initiative, Mirova, UNDP Biofin, WWF.

Image: Polluted river in jungle of Bolivia, Stocksy