In the third Environment Deputies Meeting (EDM) the membership discussed the need to direct adequate financial flows to activities that support the preservation of the natural environment for a sustainable development of the world's economies and communities.
June 24th, 2021
In the third Environment Deputies Meeting (EDM) the membership discussed the need to direct adequate financial flows to activities that support the preservation of the natural environment for a sustainable development of the world’s economies and communities.
Investing in protecting and restoring nature provides the opportunity to create jobs and drive sustainable economic growth. These economic opportunities will significantly benefit countries and organisations having the skills, knowledge and the capacity in place to implement them.
Yet, the benefits of nature conservation have seldom been taken into account in public and private investment decision making processes and consequently investment has been far too low, even though climate change and environmental degradation have consistently been identified as the leading risks facing the global economy (WEF 2021).
Strong leadership from the G20, through ambitious domestic action and international co-operation, is critical to address the multiple, interlinked crises we face: biodiversity loss, climate change, novel infectious diseases and their severe consequences for human well-being and the economy.
Crucially, the G20 finance track is also stepping up to the challenge. For instance, the newly established G20 Sustainable Finance Working Group (SFWG) demonstrates the fact that aligning financial flows with sustainable development goals is central to the G20 Agenda.
In line with the activities of the SFWG, the Environmental Deputies engaged with the essential questions on what must be done to accelerate the shifting of finance towards nature. Ministers of the Environment and Ecological Transition in G20 countries have a central role to drive the necessary change.
Participants explored emerging issues such as the need for the development and deployment of a Nature-Positive standard – the environmental equivalent of the Net Zero standard in climate – and the interconnections between biodiversity and climate finance, to create synergies between a focus on nature and the ongoing climate-focused finance work.
Current financial flows from all sources for the conservation, sustainable use and restoration of biodiversity are estimated to be in the range of USD 78-143 billion per year:
OECD (2020) estimates that total global biodiversity finance amounts to USD 78-91 billion per year: Domestic public expenditure accounts for the majority of biodiversity spending.
The new analysis by State of Finance for Nature (UNEP et al. 2021), which was presented during the meeting with a special focus on G20 countries, shows that finance for “nature-based solutions” currently amounts to USD 132 billion annually.
Estimates of the future flows of finance which benefit nature differ in size, but not scale. They suggest that investments in nature-based solutions should at least triple by 2030. The ‘State of Finance for Nature’ Report estimates that investments need to reach over USD 536 billion annually until 2050, in order for biodiversity, land degradation and climate targets to be met.
The future is open. The choices of the G20 states will determine which potential future sources of financing will be enabled and incentivised to increase.
G20 ministers in charge of the environment and ecological transition can take steps to deliver the potential higher volumes of private and public financial flows by choosing to support the current range of initiatives and by leading the domestic policy debate to create enabling conditions.
During the course of this year’s Presidency the delegates of the EDM will continue working on these crucial aspects by organising a series of workshops – with the support of the UNDP Rome Centre – as well as a Dialogue between the EDM and SFWG Groups.