COP15: Key Outcomes for Banks and Financial Institutions

Mariam Lawal
28 December 2022
Blog | Green Finance | Blog

On December 19th, at the UN Biodiversity Conference (CBD COP15), an agreement was reached: the Kunming-Montreal Global Biodiversity Framework (GBF), which aims to halt and reverse biodiversity loss by 2030. This involves restoring about 30% of land, fresh water and ocean by 2030, will be working towards living in harmony in nature by 2050 and sharing the benefits from nature fairly including the indigenous people and local communities who are the frontline stewards of nature.

There is also a headline goal to ensure that there are adequate resources for the implementation of the framework including the alignment of all financial flows – public and private i.e., Paris 2.1C equivalent. Like the Paris Climate Agreement, this framework establishes a clear mandate for private financial flows to align with the 2050 Vision of "Living in Harmony with Nature," providing the finance sector with a landmark agreement for biodiversity-related financial decision making: 150+ financial institutions with US$24+ trillion in global assets have now called for an ambitious framework to halt and reverse biodiversity loss.

Key pledges seen at the Biodiversity Summit:

Protect 30% of the world's lands, seas, coasts and inland waters by 2030 - especially areas of particular importance for biodiversity and ecosystem functions.
Halve global food waste by 2030
Reduce to "near zero" the loss of areas of wildlife-rich habitat
Reduce by 500 billion dollars (£411.7 billion) a year any government subsidies that harm nature
Eliminate, minimize, reduce and or mitigate the impacts of invasive alien species 1on biodiversity and establishment of other known or potential invasive alien species by at least 50 per cent, by 2030

Some implications for the financial institutions:

TARGET 15 - Technical Rationale extended (provided in document COP/10/INF/12/Rev.1) (cbd.int) calls for monitoring, assessing and transparently disclosing risks, dependencies and transparently disclosing risks, dependencies and impacts on biodiversity. We expect regulations in jurisdictions covering most of the world’s economic activities to unfold along these lines in the near future.
TARGET 19 - Technical Rationale extended (provided in document COP/10/INF/12/Rev.1) (cbd.int)calls for a considerable growth in financing for nature and biodiversity including from private finance and encouraging the private sector to invest in biodiversity including through impact funds and other instruments, also stimulating innovative schemes such as payment for ecosystem services, biodiversity credits, green bonds, and other types of instruments, and optimising benefits and synergies with climate finance for biodiversity.
Banks should be getting ready to align their portfolio to the Montreal Biodiversity Agreement as they have been doing with the Paris Agreement. They should also assess their dependencies and impacts on nature using the On-Core tool that is available. Banks are also advised to pilot the TNFD framework (which links to Target 15) and assess their high impacts sectors whilst looking for opportunities to finance nature-based solutions. Collaboration, however, remains key throughout the process.

In line with key engagements from the COP, we will be developing relevant learning for the Principles for Responsible Banking (PRB) Academy and our members (CPD) over the coming year in terms of an introduction to natural capital, addressing biodiversity loss and the new Agreement, thus we encourage members and stakeholders to keep an eye out for those.

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