Nature News #03

Over the last couple of weeks, there have been developments across regulation, policy, investment, scientific cooperation and reporting frameworks.

Summary of Australian and global updates

Australian regulatory updates

The Nature Repair Market (NRM) will play a key role in protecting and restoring nature in Australia. Have your say at the second public consultation regarding including Other Effective area-based Conservation Measures (OECMs) in the Nature Repair Market. This is important as OECMs will underpin the strategy for Conserved areas, which will ultimately be a key policy to achieving Australia’s 30x30 target.

The Australian government is establishing a federal Environment Protection Agency (EPA), and will introduce a bill to parliament on this in the next few weeks. The EPA will be an independent body with powers and penalties to better enforce federal laws. Serious intentional breaches of environment law can be punished with fines of up to A$780million or jail sentences that the EPA will be able to impose. This will be accompanied by the Environment Information Australia, which will foster environmental data and transparency around Australia’s state of environment.

Global updates

As nature markets are being established across the world, the Biodiversity Credit Alliance (BCA), a UN-backed international voluntary alliance established during CBD COP15, has released draft recommendations on biodiversity credits for public consultation. The recommendations highlight the need for effective engagement with Indigenous Peoples and Local Communities (ILPCs), adopting a ‘do-no-harm' approach, analysing potential risks, and designing policy and investment approaches to mitigate risks to cultural sites and communities. This will be fundamental to incentivise global participation from IPLCs in the long term.

The UK’s Nature Working Group released advice to the government’s Transition Plan Taskforce (TPT) on the appropriate consideration of nature within climate transition planning. Recommendations included introducing a joint climate and nature transition planning disclosure requirement, and updating strategies to clearly articulate how biodiversity targets will be met. This guidance may be applicable to other jurisdictions.

Brazil and France announced a plan to invest €1bn in the Amazon over the next four years. With pressures from economic activities in the Amazon, such as agriculture and mining, this conservation investment will assist local communities to build resilience against climate change and poverty. In the local context, the NSW government pledged $100 million for protecting koalas and enabling responsible housing development in Southwest Sydney. As urban expansion continues to occur, there is a need for governments, property developers, NGOs and communities to work together on safeguarding high-ecological and -cultural sites. This initiative includes establishing a wildlife corridor in the Gulguer area and restoration of endangered native vegetation around Orchid Hills among others.

While many financial institutions continue to start working on nature-related strategies, Genus Capital Management, a Canadian asset manager, has already embedded biodiversity conservation in investment decisions. Genus will use MSCI data as a screening process to exclude the 40 lowest-performing companies regarding biodiversity impact. This is a clear signal to the market on how investors and asset managers will assess investment portfolios and the potential implications to investees.

Microplastics have significant impacts on human wellbeing and is a significant threat for many terrestrial and marine wildlife. The IUCN is proposing to add an article around biodiversity protection to the UN global plastics treaty, which may entail that countries will be required to incorporate initiatives to protect nature through managing plastic waste and conducting biodiversity assessments as part of national strategies.

The UN Convention of Biological Diversity (CBD) is planning to establish 13 to 19 new scientific centres across America, Europe, Africa, Asia and Oceania. The centres will enable global cooperation on biodiversity and provide access to information that can support biodiversity strategies and action plans.

Detailed updates

Policy levers and investment initiatives

Australia’s consideration of advancing OECMs in Nature Repair Market; Australia has initiated its second public consultation regarding Other Effective area-based Conservation Measures, potentially including them for biodiversity crediting within the country’s Nature Repair Market (NRM). This consultation builds upon a previous public survey conducted last year. The Australian government’s objective is to establish a framework for OECM’s to contribute to its goal of safeguarding 30% of terrestrial and marine areas, as outlined in the Global Biodiversity Framework (GBF). The consultation paper proposes that OECMs, referred to as Conserved Areas in government terminology, could qualify for credits under the evolving NRM, which is currently being developed following it’s incorporation into legislation in December.

Australian state integrates koala conservation and development initiative; The New South Wales state government has pledged A$100 million to a conservation plan aimed at protecting koalas and enabling responsible housing development in southwest Sydney. This initiative, the Cumberland Plain Conservation Plan (CPCP), is a biodiversity certification scheme that accelerates the approval and planning procedures. Within this framework, A$49 million is designated to establish the initial phase of a new national park in the Gulguer area to provide critical wildlife corridor connections. Another A$31 million is allocated to protect and restore isolated patches of endangered native vegetation, particularly in areas like Orchid Hills. Additionally, A$22 million is set aside to accelerate conservation efforts focused on preserving 60 hectares of critically endangered Cumberland Plain Woodland.

Brazil and France to invest €1 billion in Amazon conservation; Both Brazilian and French Presidents announced a joint plan to invest €1 billion in the Amazon region, including parts of French Guiana. The investment, to be spread over four years, aims to protect the rainforest and will involve state-run Brazilian banks and France’s investment agency, with room for private resources. French President Emmanuel Macron’s visit to Brazil signifies efforts to strengthen environmental cooperation, with discussions also focusing on strategies to combat climate change and poverty.

IUCN proposes biodiversity protection article in the UN global plastics treaty; In preparation for the fourth round of treaty talks, the International Union for Conservation of Nature has recommended the addition of a new article focusing on biodiversity protection within the UN global plastics treaty. This proposal aims to incorporate measures for safeguarding and restoring biodiversity into the ongoing negotiations for the international agreement on plastic pollution. If adopted, counties would be required to implement strategies aimed at protecting nature against plastic pollution, and the suggested article also mandates the integration of biodiversity assessments into national strategies of managing plastic waste.

Business

Genus Capital Management, a Canadian asset manager, has introduced a new investment screen to promote biodiversity conservation. This screen will remove companies with poor biodiversity performance from their investment portfolios. The move is aimed at addressing the financial and environmental risks associated with biodiversity loss. Using data from MSCI, Genus will exclude the 40 lowest-performing companies in terms of biodiversity impact, reinforcing their commitment to sustainable and responsible investing. The Chief Sustainability Officer at Genus Capital Management, Mike Thiessen, expressed pride in this effort to merge ethical and financial considerations for investors through the Biodiversity Screen. This initiative reflects Genus's longstanding dedication to environmentally-conscious investing and their broader sustainable offerings, including fossil-free investments.

International cooperation and Science

The Indigenous Peoples panel of the Biodiversity Credit Alliance releases biodiversity credits recommendations; The BCA’s Community Advisory Panel (CAP) has issued draft recommendations concerning biodiversity credits, to attract greater focus to the rights of Indigenous People and local communities as the voluntary market emerges. An independent body of over 40 members of indigenous and local communities authored the draft recommendations, which do not endorse the establishment of a biodiversity market, but instead provide guidance of how a nature market could develop. Some of the recommendations included that organisations involved in the biodiversity credit market should apply a ‘do-no-harm' approach, analyse potential risks, and design policy and investment approaches to mitigate those risks. CAP highlighted the fact that a biodiversity credits scheme may be inherently incompatible with the priorities and perspectives of many indigenous and local communities, and also that data collected on indigenous territories should not be transferred to other parties who will seek to weaken indigenous people’s control over their lands.

The UN Convention of Biological Diversity has published a list of potential centres to support global scientific cooperation on biodiversity; The CBD has released a list of regional centres to better enable collaboration on biodiversity, by facilitating scientific, technological, and innovative knowledge sharing and support. The CBD’s Informal Advisory Group on Technical and Scientific Cooperation made suggestions for suitable entities, organisations and hubs. The role of such hubs would be to provide countries with access to information that can support their biodiversity action plans and mobilise resources, while creating greater synergies between countries. Three possible scenarios were proposed, consisting of 13, 15, and 19 support centres across five continents. Parties of the Global Biodiversity Framework, which include New Zealand and Australia, have been asked to share their views by April 18.

Reporting

The UK’s Nature Working Group have released their advice to the government’s Transition Plan Taskforce (TPT) on the appropriate consideration of nature in the TPT’s work. TPT’s report suggests how companies can include nature protection in their future planning. The connection between climate issues and the loss of nature is important because healthy natural places help fight climate change. The report talks about making plans that consider both nature and climate together and says we should learn from how we deal with climate change to fix nature problems. TPT report provides key recommendations for UK policymakers including: recommendations include:

• Develop effective mandatory reporting requirement for climate transition plans
• Update strategies to clearly articulate how commitments under the Global Biodiversity Framework will be met, including setting economic strategies and fiscal policies to incentives private sector action
• Introduce nature-related disclosures followed by a joint climate and nature transition planning requirement
• Build industry awareness and capacity
• Foster collaboration with technical bodies and business to develop a holistic transition plan disclosure framework

The Biodiversity Consultancy and WWF Switzerland have released the Biodiversity Impact Assessment Framework (BIAF) which provides an approach to quantifying biodiversity impacts from projects and investments. The BIAF is intend to drive financing towards activities and business models that reduce pressures on biodiversity and help to restore nature, by helping market participants identify impact pathways and quantify impacts of investment. A Biodiversity Extent, Condition and Significance (BECS) approach is incorporated into the framework to provide a methodology for quantifying the net impacts of investments and projects.