Biodiversity Protection – An Opportunity for Transformative Change and Investment 
Norton Rose Fulbright


Monday, 29 May 2023

Scott Atkins – Global Chair, Australian Chair, Global Co-Head of Restructuring and Executive Sponsor of the NRF Global Charitable Initiative for 2023 on Biodiversity Protection 
Elisa de Wit – Partner and Head of Climate Change, Norton Rose Fulbright 

Introduction
 
Biodiversity protection and conservation is rapidly becoming the next key action point for governments to address across the globe as they seek to build a greener, more sustainable and more equitable economy.  
 
It is little wonder that this is the case. The World Economic Forum (WEF) has assessed that more than 50% of the world’s GDP (some US $44 trillion) is moderately or highly dependent on nature and its ecosystems. According to the WEF, biodiversity is a top three risk to the global economy, and may lead to global famines, loss of communities through land degradation and the inability to manufacture a quarter of the drugs used in modern medicine. Quite simply, biodiversity is critical for human existence and quality of life, as well as economic growth and prosperity. 
 
And yet, biodiversity loss continues to occur faster than at any other time in human history.
 
Developing a “critical mass” towards biodiversity protection 
 
On 19 December 2022, representatives from 188 countries adopted a new agreement at the 15th Conference of the Parties to the UN Convention on Biological Diversity in Canada (COP 15). The Kunming-Montreal Global Biodiversity Framework (Biodiversity Framework) seeks to halt and reverse biodiversity loss through the achievement of four key goals and 23 targets by 2030.
 
The foundation of the Biodiversity Framework is the so-called “30x30 pledge” – which seeks to conserve 30% of the world’s land and 30% of the world’s oceans by 2030. There is also a goal to mobilise at least US $200 billion per year from public and private sources, and to increase international financial flows from developed to developing countries to at least US $30 billion by 2030, to implement national biodiversity strategies and action plans. The overarching aim is to “halt and reverse biodiversity loss” and achieve a 2050 vision for biodiversity to be “valued, conserved, restored and wisely used”.
 
Reshaping a new global order 
 
The Biodiversity Framework can be seen as nature’s equivalent of the climate change-focused Paris Agreement. It lays the foundation for transformative action to protect biodiversity and ecosystems essential to our future prosperity. 
 
The Biodiversity Framework is likely to trigger legal and policy reforms from domestic governments as they seek to achieve the nominated targets – including in relation to land use restrictions, mandatory habitat conservation, prohibited chemical use and mandatory nature-based disclosure. 
 
In the latter regard, a consensus approach is emerging in capturing and reporting data related to nature use and impact. On 28 March 2023, the UN Taskforce on Nature-Related Financial Disclosure (TNFD) released the fourth and final version of its beta framework for nature-related risk management and disclosures, which includes guidance on target setting and mitigation measures. The International Sustainability Standards Board has also indicated it will include “natural ecosystem topics” in its Sustainability Disclosure Standards, expected to be released in 2023. These standards may in turn be incorporated in the mandatory reporting regimes already in place for climate disclosure in the United Kingdom, Canada and New Zealand – which are likely to also come into effect in Australia and the United States in the near future.
 
In the private sector, there are also significant opportunities for investment to support the biodiversity transition. Already, the UN Principles of Responsible Investment – a network of 150 global financial institutions with more than US $24 trillion in assets under management – has pledged to work with its customers to achieve the key targets set out in the Biodiversity Framework. It is inevitable that entities will need to change the way they operate if the targets and goals of the Biodiversity Framework are to be achieved and, much like the transition to a net zero emissions future in the context of climate change, biodiversity protection will open the door for green finance and green bond investments, and the mobilisation of capital to support an economy that respects the value of nature.  
 
Significantly, the WEF estimates that a positive environmental transformation effort could generate up to US $10.1 trillion in business value annually and create 395 million jobs by 2030. Nature conservation is therefore by no means an impediment to, or in contradistinction to economic growth – rather, it will unleash the potential for diversification, and it is the key to long-term economic sustainability. 
 
Incentives for nature protection underway in the United States and Australia
 
Over the last 200 years, Australia has suffered the largest documented decline in biodiversity of any continent. In that context, the Australian Government in October 2022 released its new Threatened Species Action Plan: Towards Net Zero Extinctions, which sets out a pathway towards threatened species conservation and recovery over the next 10 years. 
 
The Plan contains a range of targets, including preventing any new plant or animal extinctions, and protecting and conserving at least 30% of Australia’s land mass. The Plan also prioritises 110 species and 20 places, with an AU $224.5 million investment in a Saving Native Species program to boost outcomes for threatened native plants and animals. 
 
Fifteen species and three ecological communities have been added to the Environment Protection and Biodiversity Conservation Act list of threatened species. Four species have been upgraded to a higher threat category, while one species will retain its current threat category.
 
The Australian Government has also indicated that it will introduce new national environmental standards against which conservation protection and major development applications will be measured.
 
In the United States, President Biden’s Executive Order 14008 in Tackling the Climate Crisis at Home and Abroad sets out the first-ever national conservation goal for the United States to conserve at least 30% of its lands and water by 2030. And on Earth Day 2022, President Biden signed Executive Order 14072 on Strengthening the Nation’s Forests, Communities and Local Economies, which advances efforts to safeguard mature and old-growth forests on federal lands.
 
The United States Government has also released its Nature-Based Solutions Roadmap, which includes agency actions to ensure over US $25 billion in infrastructure and climate funding can support nature-based solutions. The Government has also introduced the America the Beautiful Challenge – a US $1 billion public-private partnership that offers a one-stop shop to support ecosystem restoration projects that invest in watershed restoration, resilience, equitable access to nature, workforce development, corridors and connectivity and collaborative conservation.
 
Going forward
 
Biodiversity protection is essential to future economic growth, standards of living and community wellbeing. The Biodiversity Framework is already shaping government action, new regulations and public and private partnerships that will drive the transition to an economy that exists in harmony with nature. There are significant opportunities to support this transition in the business community, both domestically and through global partnerships.  
 
The strong networks that exist between the Australian and United States business communities as part of AmCham could readily take advantage of these opportunities and form part of a new global economic order in coming years.