Finance for Nature
Finance for Nature
Catalyse urgent action to address forest and biodiversity loss, halt climate change through nature-based solutions supported by new approaches to finance. These might involve blended support from public and private sources and should be inclusive of nature and communities.
Why? If we are to meet climate change, biodiversity and land degradation targets, we need to close the USD 4.1 trillion finance gap for nature by 2050, according to the UN’s 2021 State of Finance for Nature report. That means we must triple investments in nature-based solutions for tackling challenges such as climate change by 2030 and spending must increase four times by 2050, the report says.
Forests are our natural ally in tackling our climate emergency, acting as critical carbon sinks. Yet avoiding deforestation still presents almost insurmountable challenges, largely because of the scale of the problem, lack of governance, lack of education for local communities and the relative value of timber and agricultural commodities vs forest or biodiversity protection.
Sustainable funding is further a constraint facing many smaller companies, conservation initiatives and community projects. Indeed, insufficient funding has led to years of forest conservation work being inadequate against the pressures of agricultural commodities as they are currently produced.
Developing replicable models of finance and the partnerships to support those is in itself an important area of work as we seek to harness the capital markets for nature-based solutions to climate change.
Our strategy is therefore multifaceted and long-term. We support the research needed to inform regulation and policy and what is needed for long-term execution. We also recognise the need to support the linkages between conservation and community. That means the development and implementation of replicable models of finance for companies that are inclusive of both.
Mobilising Finance for Nature
Our nature is wondrous in its own right. We are constantly startled by its beauty, its rich biodiversity. This is fundamental to the functioning of our terrestrial, freshwater and marine ecosystems. The natural variation in species allows humanity not only to survive but to thrive. By providing diverse and complex habitats, forests are essential to the biodiversity of terrestrial plant and animal species. Forests are further invaluable for the environmental services they provide, protection of watersheds, regulation of local climates and provision of livelihoods.
Forests, biomass and soils are also the most effective tool we have in capturing and storing greenhouse gases. If we are to limit warming to 1.5 degrees Celsius above pre-industrial levels and achieve net zero carbon targets, removing carbon from our atmosphere will be critical and forests are essential carbon sinks. Additionally, we have seen that the loss of habitats brings people and wild animals into closer contact, leading to the spread of zoonotic diseases. SARS CoV-2 is just one example of such a virus with devastating impact globally.
Yet, as the world’s population continues to rise, our ecosystems face unrelenting pressure from urbanisation and overexploitation of resources resulting in pollution, habitat fragmentation, loss and degradation. We continue to ignore loss of nature at our peril.
Globally we have seen dramatic declines in animal and plant populations across all biomes and the rate of species extinctions is accelerating, with grave and varied impacts. The IPBES 2018 report found that around 1 million animal and plant species are now threatened with extinction, many within decades, more than ever before in human history.
Our excessive use of pesticides alone has led a dramatic drop in the numbers of pollinators, the bees, moths and butterflies that sustain our crops. Scientists estimate a consequent annual loss to agricultural output of about US$ 217 billion.
Indeed, the World Economic Forum estimates that around half of global GDP is dependent to some degree on nature. We must value and protect our nature for ourselves, for future generations or bear the dramatic consequences, which are already unfolding.
It’s estimated that while forests sustain 50% of species on the planet they are however disappearing rapidly, with annual deforestation at an estimated 13 million hectares (equivalent to an area the size of Greece). According to the UN, the pressure on forests in likely to intensify with increasing population, rising incomes and a global shift toward meat-based diets.
Exacerbating the impact of deforestation on biodiversity and driving many species further towards extinction is the continuous and illegal trade in wildlife and wildlife crime in general within the region.
Our program has evolved over the years from supporting forest conservation via ranging, research and community engagement with our own philanthropic funds to looking for a means to mobilise private sector capital for similar purpose.
That has led to considering how conservation and community can be integrated into investment theses rather than seen as risk factors or challenge to overcome.
Our climate and biodiversity crises have been drivers of our programmatic work in this area. Certainly, there is not enough philanthropic capital to address rural development challenges or the need to protect our forests and their biodiversity. Looking to private markets for resources by repositioning understanding of risk and opportunity has been the approach.
Our Latest Blogs
Global, Hong Kong, Regional
May 24, 2022
Sophie le Clue
2021 was another roller coaster. As the pandemic persisted into a second year, we all continued to feel its effects in different ways – personally, economically and mentally. For the most part, we have proven to be resilient, ...
November 11, 2021
Sophie le Clue
On 1st November, I stepped in to ADMCF’s CEO role following Lisa’s move into her new position at ADM Capital, building funds with a climate focus. After 15 years steering ADM Capital Foundation, Lisa has joined our ...
August 26, 2021
In light of the government’s recently announced ban on disposable plastic tableware, ADMCF’s Ashley Bang was invited to share insights from her Eat Without Waste research at Green Drinks. Along with Edwin Lau from The Green ...