Forico’s Chief Financial Officer Rayne van den Berg attended COP15 in December as a delegate with the World Business Council for Sustainable Development (BCSD), sharing the story of Forico’s globally acclaimed Natural Capital Reports. The delegation was led by Andrew Peterson, Chief Executive Officer of the Australian chapter of BCSD and included Rosemary Bissett, Head of Sustainability, Governance and Risk at NAB, and Dan Whittaker of the IDEEA Group. These are Rayne’s outtakes from the summit.
Businesses, NGOs, Australian government delegates and indigenous communities met in a cold and snowy Montreal in December 2022 for the United Nation’s Biodiversity Conference - COP 15.
You could be forgiven for missing this pivotal moment in history, held in the lead-up to Christmas and following on from November’s more widely publicised COP27 for Climate Change in Egypt.
But the outcomes from COP15 chart global targets and timetables which aim to see nature pulled back from the brink by 2030, helping to keep the Paris Agreement’s 1.5°C target achievable.
Nature loss is one third of the climate problem but nature can contribute one third of the solution. COP15 laid the cards on the table: we cannot achieve the Paris agreement without action to protect and restore nature. This deal was vital for our climate, and our economic and food security.
Impressive and ambitious representation from business
What made this COP different from those that preceded it was the level of ambition and alignment from the ten thousand-plus business representatives present. This was led by the passionate Eva Zabey, Executive Director at the Business for Nature coalition https://www.businessfornature.org/, who called for mandatory disclosures by businesses of their impact and dependencies on Nature. This disclosure is exactly what Forico’s Natural Capital Reports provide a roadmap for.
Business is often accused of lobbying to ‘water down’ policy change, but this is not what we witnessed in Montreal. In fact, there was a common understanding that disclosure will surely happen, and will be driven by societal and investor demands regardless of policy. But large multinational businesses want a level playing field to drive change and build cohesive capability. By networking with Australian government delegators, we were able to participate in daily briefings and influence Australian negotiations from the business perspective.
The final historical deal for Nature – the Global Biodiversity Framework (GBF)
By the close of COP15 all parties had adopted the hard-fought and well-balanced Kunming-Montreal Global Biodiversity Framework (GBF). This will guide global biodiversity policy through four overarching goals to be achieved by 2050. A further set of twenty-three targets is to be reached by 2030. Together these can achieve the vision of living in harmony with nature by 2050, and being on track to becoming Nature Positive and living sustainably within our planetary boundaries in the next seven years.
It is hoped that this unanimous agreement by the 188 countries who are party to the Montreal GBF will be for Nature what the Paris Agreement has been for climate change, which is clearly driving carbon emission reduction policies and market transformation to limit global warming to 1.5°C.
The desire to reach net-zero and nature-positive economies is now agreed in international law; there are no excuses for inaction. We can expect governments to plan and legislate as a result. Australian Minister for the Environment and Water Tanya Plibersek was present at COP15 and new measures have already been announced by her team aligned to GBF commitments.
Equally promising is that much of the negotiation focused on ensuring the GBF was more inclusive, more comprehensive, more SMART (specific, measurable, achievable, relevant, and time-bound) and more complex than the Aichi Biodiversity Targets that preceded it. Pleasingly there was greater alignment and interaction between traditional government negotiators and interest groups including business, NGOs, indigenous peoples, women, faith-based groups and youth. Much time was spent ensuring accountability was built in, with targets set on mandatory reporting disclosure.
The implications for Forico, Tasmania and Australia
COP15’s landmark GBF acknowledges that only truly transformational changes to how we work, live and grow will reverse the trend of biodiversity loss. If we want financial and capital markets to be part of the solution, or better still realise their potential to drive this change, we need to ensure we have the right information to make the most remarkable decisions which will be required for a just and equitable transition for all – planet, people and prosperity.
Transformational change has already occurred in Tasmania and Forico’s own story of reinventing sustainable forestry from the miasma of the forestry wars is one such example.
Forico and Tasmania now have a unique opportunity with 57% of the state under protection and biodiversity- rich. With 49% of the Forico estate already managed for conservation and biodiversity, the company is well in excess of the GBF targets.
Forico is uniquely placed to leverage this for social licence and investor value, the opportunity to build our brand in a nature-positive space for the greater good and betterment of the Tasmanian forestry sector, and the state.
The widespread recognition of Forico’s leadership in driving decision-making through finance, as enshrined in our Natural Capital Reports, has been a delightful surprise. We have followed hard on the heels of this success with Forest Stewardship Council (FSC™) Ecosystem Services certification, and scientific peer reviews by Accounting for Nature.
FSC International was in attendance at COP15 and the message that sustainable forests are part of the nature-based solution was front and centre. It is a powerful message which reminds us that we must tell the story of our sector better here in Australia. There should be no implicit connection between ‘forestry’ and ‘deforestation’ when plantation forestry is discussed and the gulf between them should be made clear. This will be even more important as the Nature Positive messaging becomes mainstreamed in Australia.
Engaging with First Nations people
Forico is embarking on the second stage of its journey in engaging with the Aboriginal communities and individuals of Tasmania, producing an Innovate Reconciliation Action Plan (RAP) to continue the work begun in our Reflect RAP, launched in 2020. In our Innovate RAP we make explicit the ways in which we will continue to extend our work with Aboriginal communities, facilitating learning opportunities and connection on Country.
Capacity building for the future
The new age of mandatory disclosures by businesses of their impact and dependencies on Nature is
coming fast for business, and developing robust measurement and valuation tools is a priority. At the corporate level this is being addressed through frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD), and at the national level via National Accounting Systems that demonstrate how we measure the contribution of nature to economies.
The governments of the United States of America (USA) and Australia announced they would work together to advance the development and use of natural capital accounts and environmental statistics, and to support other countries to accelerate their own natural capital reporting.
CFOs and finance functions must learn to quantify the impacts of Natural Capital on the balance sheet, to facilitate better operational decisions and enable transparent conversations with stakeholders and investors. There will be a huge demand for these skills in the next eighteen months, which includes Geographic Information System (GIS) specialists, as the nature-risk assessments are by their very nature spatial. Business must now look for greater interaction with global organisations such as Capitals Coalition, TNFD Global secretariat and SBTN, and the very active Forest Solution Group of WBCSD. The Australian-based, highly innovative and world leading NatureTech Solutions can greatly enhance the monitoring of Nature and Biodiversity at scale.
Biodiversity credits will be an important financing mechanism and this was one of the hottest topics in the business and finance-side discussions at COP15. There is speculation that biodiversity markets will be bigger than carbon markets and demand-side interest is growing. There was incredible momentum behind this opportunity on the business side of COP15 with packed rooms at each discussion. Particular focus was made on the potential for biodiversity credits to help finance the protection of nature in countries and areas that have historically been unable to access carbon finance, and to ensure meaningful benefits flow to Indigenous peoples and local communities.
The Australian Department of Climate Change, Energy, the Environment and Water (DCCEEW) continue to advance their Nature Repair Market draft bill, with a draft released in late December.
There are great Australian government connections with DCCEEW developing on their proposed Nature Repair Market (exposure draft released in late December) - https://www.dcceew.gov.au/environment/environmental-markets/biodiversity-market
Disappointingly this draft still refers to Certificates and not unitising for use in private trading platforms and market development. Perhaps there is a missed opportunity if governments do not engage more with all four market players – project suppliers, buyers, marketers and policy makers.
Businesses should watch and engage in this space and continue to influence policy development. The Minister has announced a global Nature Positive Summit to be held in Australian in 2024. Equally exciting is the Australian BCSD’s proposal for a Sustainability Summit in late 2023 or early 2024.
As the Nature Positive state, it seems only natural for Tasmania to be considered the obvious location for either, or both.
Banner image by Matthias Mullie / Unsplash