The United Nations 2030 Agenda for Sustainable Development covers 17 goals, the 15th of which is “Life on Land,” namely: Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss.

Under this major goal, there are 12 targets, the 15.a of which is “Mobilize and significantly increase financial resources from all sources to conserve and sustainably use biodiversity and ecosystems.”

●Current Situation

The World

Funds have been established in various regions, but funding for biodiversity conservation remains inadequate

Image source: Green Climate Fund

At the global level, there have been several initiatives and commitments aimed at increasing financial support for biodiversity conservation. One of the most significant is the Convention on Biological Diversity (CBD). The CBD's Strategic Plan for Biodiversity 2011-2020 includes a target to substantially increase financial resources from all sources to support biodiversity conservation by 2020. Many countries have made efforts to increase funding for biodiversity conservation. Some have established dedicated funds or mechanisms to mobilize monetary assets, while others have integrated biodiversity conservation into their national development plans and budgets. International organizations, such as the Global Environment Facility (GEF) and the Green Climate Fund (GCF), also provide capital for biodiversity conservation projects in various countries.

UNEP noted that, financing for nature remains insufficient as the world prepared to negotiate the post-2020 global biodiversity framework; to combat global crises, financial flows for nature-based solutions need to double by 2025 in the second edition of The State of Financing Nature, on December 1, 2022.

On August 24, 2023, the seventh Member State Assembly of the Global Environment Facility agreed to establish the Global Biodiversity Framework Fund to accelerate the protection of wild species and ecosystems, in Vancouver, Canada.

However, despite these efforts, we still face significant challenges. Funding for biodiversity conservation is often limited and insufficient to address the scale of the problem. Many countries struggle to allocate adequate resources to biodiversity conservation due to competing priorities and limited financial capacity. Additionally, countries in the world need to diversify the sources of funding for biodiversity conservation. While public funding remains crucial, there is increasing recognition of the importance of engaging the private sector and exploring innovative financing mechanisms. This includes exploring options such as payments for ecosystem services, biodiversity offsets, and green bonds.

Source: United Nations, Xinhuanet, Convention on Biological Diversity, Global Environment Facility, Green Climate Fund

China

China invests heavily, but challenges remain

Image source: Center for International Forestry Research

Since 2019, China has become the largest contributor to the core budget of the Convention on Biological Diversity and its protocols. China continues to increase its contribution to the Global Environment Fund and has become the largest donor to the Global Environment Fund among developing countries. China also announced that it would take the lead in investing 1.5 billion yuan to establish the Kunming Biodiversity Fund to support biodiversity conservation in developing countries.

• From 2011 to 2020, China’s core financial investment in biodiversity protection totaled approximately 2.16 trillion yuan, accounting for approximately 0.24~0.29% of its GDP. This is comparable to the proportion (0.30%) of biodiversity protection investment in GDP of Canada, France, Spain and the United Kingdom from 2008 to 2017. 

• Biodiversity conservation funds mainly come from government fiscal expenditures, especially central fiscal expenditures, which continue to increase, followed by local fiscal expenditures. Private funds and international funds account for a low proportion, and private funds are growing rapidly.

• Ecosystem protection and ecosystem restoration are the two main expenditure directions of biodiversity conservation funds. The level of investment in ecosystem restoration funds remains high, followed by ecosystem protection funds.

• It is recommended that the central government significantly increase its financial investment in the natural protected area system with national parks as the main body, and significantly increase the level of investment per unit area of natural protected areas.

The Chinese government has allocated significant funding for ecological restoration projects, protected area management, and the establishment of nature reserves. Furthermore, China has been actively promoting public-private partnerships (PPPs) to mobilize additional financial resources for biodiversity conservation. The government has encouraged collaboration between businesses, non-governmental organizations, and research institutions to support conservation efforts. This approach has led to the establishment of several corporate-funded nature reserves and conservation projects.

However, despite these efforts, challenges remain. China's vast size and diverse ecosystems require substantial economic resources to effectively conserve and sustainably use biodiversity. China still faces issues such as habitat loss, pollution, and illegal wildlife trade, which require continuous economic assistance and enforcement measures.

China’s green finance market in the world’s largest emitter nation has already reached US$2.3 trillion, according to UBS. According to S&P Global Market Intelligence, China issued the most green bonds globally in 2022 at US$76.25 billion. In 2023, China is expected to issue between US$90 billion and US$100 billion in green bonds. China needs to continuously work to address the remaining challenges and ensure the long-term financial sustainability of biodiversity conservation.

Source: Ministry of Ecology and Environment of the People’s Republic of China, Xinhuanet, S&P Global Market Intelligence, Forbes, UBS, Paulson Institute 

●Cases

The World

Global Joint Initiative on the Partnership of Biodiversity and Finance (PBF) of the World Resources Institute

Image source: World Resources Institute

Comprised by a group of international stakeholders from financing institutions, the private sector, academic institutions, international development agencies, and civil society organizations, with representation from both developed and developing countries from various continents, PBF is established to support the close collaboration between biodiversity conservation and financing, in particular, in helping to address urgent biodiversity challenges and help close the considerable action and financing gaps, including guiding financial institutions to incorporate biodiversity conservation into their investment decisions.

In line with the GBF and the Joint Initiative on PBF, the PBF Action Plan (2023-2025) will focus on the following five strategic areas:

• Tools and Technical Support: Identify and research assessment and evaluation tools that are based on PBF members’ needs, both from impact and benefits perspectives. 

• Capital and Products: Research biodiversity financing mechanisms, sources, business models, innovative products, and possible pilots in biodiversity-dependent sectors and regions. 

• Policies and Standards: Contribute to integrated policies for financial institutions to support biodiversity conservation areas that PBF has identified.

• Capacity Building: Make cutting-edge information available and host workshops and seminars to further raise awareness, and build an institutional biodiversity business strategy and organizational arrangements to improve biodiversity finance performance. 

• Knowledge Sharing: Identify and update recent progress among PBF members and share information among institutions

Source: World Resources Institute

Natura & Co's compensation policy

Image source: Natura &Co

For executives in Natura &Co, variable compensation combines short and long-term incentive plans, linked to the achievement of purpose-driven results.

The short-term incentive for FY22 included 10% of the overall bonus pay out calculation being linked to planet-positive results focused on post-consumer recycled plastic packaging.

The long-term incentive runs for a three-year cycle and is managed through two vehicles – Performance Share Unit (PSU); and Supplementary co-invest award (RSU). The PSU award is performance based; the value that participants receive will be dependent on the achievement of multi-year performance measures and the awards will be subject to performance conditions over a three-year period. The PSU includes 30% of the overall performance being linked to carbon emission intensity reduction which is connected to their Commitment to Life Climate Crisis pillar.

In 2022, as anticipated, they also started compensating their management for meeting the targets related to their 2030 Commitment to Life. Since 2009, they have been applying sustainability targets linked to executive compensation, and this is one step further in their pledge to generate value for all our stakeholders. 

Source: Natura &Co

China

Tencent carries out biodiversity conservation in all aspects

Image source: Tencent

Tencent is committed to protecting biodiversity and investing in a governance structure based on the group's ESG (Environmental, Social and Governance), which is overseen by the Corporate Governance Committee authorized by the Board of Directors, managed by the ESG Working Group, and implemented by the Biodiversity Task Force. Tencent adheres to eco-friendly business development, use technology to promote the sustainable use and protection of natural resources, and use Internet tools to raise public awareness. 

On March 23, 2023, Tencent launched the “CarbonX Program” to encourage and support the development of the next-generation low-carbon technologies. The project will accelerate the large-scale application of these cutting-edge technologies by 2030. The first phase of the project focuses on innovative carbon capture, utilization and storage technologies.

In order to enhance people's low-carbon awareness, popularize carbon neutrality knowledge, and advocate a green lifestyle, WeChat Pay, the Tencent Carbon Neutrality Lab, the Tencent Philanthropy, and the Tencent Financial Research Institute launched the “Carbon Neutrality Q&A” science popularization activity. Each user can answer three carbon neutrality questions every day, and each correct answer can generate a donation for public welfare, which will be donated by WeChat Pay through the Tencent Charity Foundation to support carbon neutrality public welfare projects such as “One Square Meter Grassland Protection Plan” and “One Mangrove Forest Guardian Plan.” Users who give the wrong answer will see the complete answer analysis, so as to achieve the effect of popularizing knowledge. 

WeChat Pay’s QR code for taking the bus has covered nearly 300 cities across the country, helping hundreds of millions of users with green travel; WeChat electronic invoices have served more than 100 million users in total, enabling paperless reimbursement; and low-carbon and convenient scenarios in the WeChat ecosystem, such as paperless ordering in restaurants, paperless check-in in hotels, and remote living payment, have been integrated into all aspects of life.

Source: Tencent, Tencent Foundation

TCL Foundation photovoltaic low-carbon project

Image source: TCL Foundation

On September 15, 2023, the 10th China Charity Fair with the theme of “Building Modern Philanthropy and Gathering Strength for High-quality Development” opened at the Shenzhen Exhibition & Convention Center.

Liu Lei, secretary-general of the TCL Foundation, introduced the “TCL Photovoltaic Low-carbon Campus”, a new systematic model to subsidize education. Based on its donation of photovoltaic rooftop power generation systems in rural and urban areas, the foundation is committed to covering diversified scenarios and combining photovoltaic environmental protection with education, demonstrating TCL’s practical results in deeply practicing the concept of sustainable development and continuously promoting the deep integration of science and technology and public welfare undertakings. 

In 2022, the TCL Foundation launched the “TCL Photovoltaic Low-carbon Campus” project, combining industrial and technological advantages to donate photovoltaic rooftop power generation systems and 25 years of power generation revenue to rural schools, including schools located near the habitat of protected animals such as pandas and crested ibises in Qinling Mountains, Shaanxi. The project provides a platform for local students to learn about ecological environmental protection and understand the concept of sustainable development. At present, the “TCL Photovoltaic Low-carbon Campuses” of version 1.0 have been built in 19 rural schools across the country, realizing grid-connected power generation, with a total power generation of about 33.02 million kWh and a carbon dioxide reduction of 28,000 tons, which is equivalent to planting 1.6 million trees.

Source: TCL Foundation

●Background

Sustainable Development Goals (SDGs) initiated by the United Nations

On January 1, 2016, the 17 Sustainable Development Goals (SDGs), including 169 targets, of the 2030 Agenda for Sustainable Development — adopted by world leaders in September 2015 at an historic UN Summit — officially came into force. Countries will mobilize efforts to end all forms of poverty, fight inequalities and tackle climate change while ensuring that no one is left behind.