Who should pay to restore nature? This is THE question often asked at international climate conferences and across public discourse. The answer sounds simple, right? All actors that destroy and benefit from it. In a capitalistic economy, there is no argument that the private sector has gained the most from extracting resources derived from nature. Environmental and social costs are currently externalized from our financial statements. Therefore, when assessing the risks and long-term consequences of this continued degradation, the private sector should be required to recognize that internalizing these costs, whether through investments to protect, conserve and/or restore our natural resources, would be critical to mitigate and adapt to pending climate, water and biodiversity disasters.
IPCC AR6 Working Group III: Mitigation of Climate Change
Nature provides one-third of climate solutions. Nature-based Solutions (NbS) such as afforestation, silvopasture, regenerative farming, and restoring grasslands and peatlands are the most impactful and least costly pathways to reducing and sequestering greenhouse gas emissions. Not forgetting to mention, the co-benefits and impacts of implementing NbS aren't limited to environmental outcomes but socially as well i.e. human health, food security, social livelihoods.
Examples of NbS from left to right: forest conservation, regenerative farming, kelp farming
Moreover, these solutions fit into any Environmental, Social, and Governance (ESG) strategies companies are currently adopting. This is especially true in the food and textile industry where investing back into your supply chain towards more sustainable agricultural practices can be considered a carbon insetting solution when done correctly with the right expertise and proper monitoring.
With all these benefits that funding nature provides, so why is NbS still severely underfunded? Based on UNEP FI's recent report, current investments towards nature-based solutions are inadequate to achieve 2015's Paris Climate Accords international treaty to half emissions by 2030, let alone to reach net-zero by 2050, as current flows of environmentally harmful subsidies (just from government alone), are currently 6.5x higher than that of public (83%) plus private (17%) investments going into NbS annually. Therefore it is critical that governments prioritize the reform and repurposing of environmentally harmful subsidies immediately, if not, regardless of what we do to mobilize finance for NbS, the scale of harm to the environment from subsidies will always be greater.
If the world wants to halt biodiversity loss, limit climate change to below 1.5C and achieve land degradation neutrality by 2030, current finance flows to NbS must urgently double by 2025 and triple by 2030. (Image source: UNEP State of Finance for Nature 2022)
A growing number of corporations around the world have now established their own department on sustainable financing, which allows members across a company the transparency to track, measure, set targets, implement strategies, and report on their company's ESG goals, further assessing the short and long-term economic viability of their investments. But there is difficulty in getting from the tracking to implementing, as the private sector is inherently competitive and often works in silos. Nature conservation on the other hand, operates the opposite and in fact requires cross-sector collaboration. In order to ensure the effective use of NbS investments, corporations have to partner with intermediaries with the necessary expertise in both financing and nature conservation.
For this reason, organizations like ZFPA can help. As intermediaries for the private sector and local conservation experts such as Homeland Green and reNature, we work to ensure that funds collected are monitored, measured, and optimized to yield all social, environmental, and climate action outcomes.
ZFPA employs a table-to-farm approach that helps to rapidly subsidize farmers in the transition to regenerative agriculture.
It is critical that the private sector understands the values of NbS as an ever-changing formula as conservation and soil science experts continuously report on new emerging science and data adapted to their local contexts. The recent six-month project update session conducted by Ms Josephine and Project Assistant Hilda along with our Restore Fund farmers and their TAPs has proven that although HK's farm sizes may be small, the intake of new regenerative knowledge for soil health, pest control, and optimized crop nutrition, (planned for further sharing sessions across different farming communities in HK) is what's ultimately most valuable and scalable. Because only with awareness and knowledge, can we then implement practical changes.
As we begin to understand what stops symptoms of nature degradation, we now need to begin adopting the remedies in order to quickly restore our planet.
Thanks to the funds collected by our ZFPA restaurant partners, Restore Fund farmer grantees and their TAPs as well as consultants from Homeland Green are now able to implement regenerative farming practices and begin their transitions with no to minimal risks.
References:
Global Biodiversity Framework Dec 2022
State of Finance For Nature 2nd Edition Dec 2022
TNFD March 2023 (the follow up to Task Force for Climate-Finance Disclosures):
WWF's When Finance Talks Nature Dec 2022
IUCN 2020 IUCN Global Standard for Nature-based Solutions
UNEP FI: Investing with Nature: An Introduction to Nature-based Solutions Webinar
Project Drawdown: The Drawdown Review 2020
https://drawdown.org/publications/the-drawdown-review