COP15 in Montreal: What does the landmark biodiversity conference mean for business?

The new Kunming-Montreal Global Biodiversity Framework should drive a step change nature protection natural world - here's why the world's new biodiversity targets matter for businesses

In the early hours of Monday morning, a new global pact for nature was agreed by the vast majority of the world's governments.

The 10-year plan, with its four broad goals and 23 targets, has a hugely ambitious aim: to halt and reverse biodiversity loss by 2030. It is the result of more than two weeks of intensive negotiations at the COP15 Biodiversity Summit in Montreal, and more than four years of preparation for a summit that was delayed by more than two years due to the Covid-19 pandemic.

Achieving the world's new nature goals would represent a phenomenal achievement. Nature has been in decline throughout human history, and the process has rapidly accelerated over the last 50 years as the destruction and degradation of the natural resources the global economy depends on has cranked up a gear. Pretty much all previous international goals to protect nature and enhance biodiversity have not been met.

But earlier this week in Montreal, all the world's governments - barring the US and Vatican, which are not signed up to the UN's biodiversity accords - signed up to the Kunming-Montreal Global Biodiversity Framework, committing to work together to ensure 30 per cent of land and sea worldwide is protected by the end of this decade, up from 17 per cent and 10 per cent, respectively.

The implications for the global economy are huge. If the targets are met large swathes of land and sea that are currently exploited by businesses to produce food, extract resources, and home millions of people will see their legal status change as they are granted stronger nature protections. The ecosystem services that underpin the global economy should recover, providing greater climate resilience, enhanced natural carbon sinks, and improved food and water security. Significant new economic opportunities should result with everything from tourism and regenerative farm to the circular economy and alternative proteins standing to benefit. But at the same time meeting the targets will require changes in land use and disruptions to supply chains that are likely to prove hugely controversial.

Moreover, there are a number of targets in the new accord that directly relate to business, such as the goal to raise $200m from a broad range of sources for biodiversity protection and restoration, provisions around nature risk reporting, pledges to mainstream nature considerations into policy and regulatory frameworks, and the commitments to eliminate environmentally harmful subsidies and shrink the footprint of consumption and production.

However, while the treaty is genuinely historic in its ambition and reach, significant concerns remain about whether the various components of the pact are strong enough to deliver on its overarching goals. The text is weakened by a lack of specificity on key targets, including species protection, business impacts, and plastic pollution, as well as the absence of a mandatory reporting framework with strict timelines that would hold governments to account. The spectre of the botched Aichi Targets, which were established in 2010 and resoundingly missed by their 2020 deadline due to a lack of finance and implementation mechanisms, looms large.

However, it is incontestable that Monday marked a watershed moment for the global effort to protect nature and tackle climate change by restoring the world's natural carbon reserves.

Fresh from an exhausting but exhilarating week on ground at COP15, here is BusinessGreen's guide to why the COP15 outcome matters so much for businesses around the world.

Nature positive

In the six years since the Paris Agreement came into force, net zero goals have swept the corporate world, as companies have looked to demonstrate their commitment to the historic pact's headline 1.5C temperature limit.

There are high hopes the Kunming-Montreal Biodiversity Framework will have a similar ripple effect, but this time through the embrace of 'nature positive by 3030' goals that can complement the 'net zero' by 2050 targets adopted by so many companies and financial institutions. The term 'nature positive' was stripped from the pact at the last hour, but many observers noted that the term remains the best way for businesses to translate the pact's headline mission to halt and reverse biodiversity loss into 'corporate speak'.

The apex goal for nature garnered broad support from significant swathes of the business and finance community, as well as many conservation organisations, including IUCN, Conservation International, and WWF, who opted to call their joint stand and events space at the summit the 'Nature Positive Pavilion'.

But the concept is controversial among some green groups and scientists, who argued the term could become a woolly buzzword that would help firms greenwash their activities and open the door for some firms to purchase nature-based offsets and credits rather than reduce their absolute impacts on nature.

The latter group, unsurprisingly, welcomed the news that the term had been stripped out of the final text. "We welcome that the new framework to protect biodiversity does not mention nature positive, one of the proposed greenwashing measures that opened up new possibilities for offsetting biodiversity destruction, rather than halting it," said Friends of the Earth campaigner Hemantha Withanage.

But the expectation is that the Kunming-Montreal pact, with its provisions on nature risk reporting and headline goal to reverse nature's decline, will serve as an accelerator for 'nature positive' goals regardless.

So far, just a small number of companies have made specific targets on protecting nature. Consumer goods giant Unilever, renewables firm Orsted, pharmaceuticals company GSK, and cement maker Holcim are among those that have committed to some form of nature positive or nature net-positive goal, whereas furniture giant IKEA has pledged to become 'forest positive'. But across much of the corporate world there is as much engagement with the idea of becoming 'nature positive' as there was with becoming net zero a decade ago.

Natural England executive director Tony Juniper said he expected COP15 to spark a rapid increase in the numbers of companies pledging to become nature positive. "The big signal that comes out of here for the private sector, and one that needs to be heard, is this change of direction from being nature negative to nature positive, and to be halting the decline of nature and achieving its recovery," he said. "It is comparable to when the private sector heard the signal after the Paris Agreement that the world has to be achieving net zero emissions by 2050."

"Before Paris, there were some companies that were committing to very ambitious greenhouse gas reduction targets, and they were putting in place policies to do it," he added. "The same is the case here, where you've got a few companies who've got it and who are trying to move in that direction - for instance, [clothing brand] Patagonia. This is about the mainstreaming of that message and more companies picking it up."

For those businesses unsure where to start, the World Business Council for Sustainable Development published a new 'roadmap for nature positive' on the sidelines of the summit that could prove a valuable resource for a growing number of businesses in the coming weeks.

Nature reporting

The Kunming-Montreal Biodiversity Framework sends a major signal that large businesses and financial institutions will soon be required to report on nature impacts and dependencies.

While the final pact stopped short of making such disclosures 'mandatory' as had been hoped by many businesses and governments prior to the event, observers largely agreed that the final wording remains strong and should help galvanise companies and financial institutions to report their risks, dependencies, and impacts on nature. Under the terms of the agreement, governments are urged to "ensure" large and transnational companies regularly undertake this exercise, looking across their operations, supply and value chains for nature-related risks and opportunities. It may be something of a word salad, but the text also stipulates in the same breath that governments include "requirements" for larger companies and financial institutions to complete this exercise.

Nature reporting remains significantly less commonplace than climate risk reporting, which is now mandatory for larger firms in many jurisdictions around the world, including the UK. But it is gradually becoming more standardised, with the Taskforce of Nature Related Financial Disclosures, a collaboration between business and NGOs, working to develop a high-integrity standard for how non-state actors can report on nature-related impacts. It is expected to publish its first framework next year. As such, there was broad agreement among observers that the strong wording in the Kunming-Montreal pact would serve to accelerate a trend that is already underway and should ultimately help result in many of the world's largest firms reporting on their nature-related impacts.

Businesses and financiers took a strong stance on nature reporting during the summit, with BNP Paribas, Danone, Holcim, Ikea, Nestle, Sainsburys, Salesforce, Unilever, Vale, and Yara International among 400 large companies and financial firms that backed the 'Make It Mandatory' campaign managed by Business for Nature.

The companies argued that mandatory nature risk reporting would help level the playing field for firms already taking action to measure and reduce their nature impacts, provide a baseline for targets to be formed from, and give investors a more granular view over the nature-related risks in their portfolios.

Eva Zabey, executive director of Business for Nature, told BusinessGreen she was "very pleased" with the final wording of the deal. "It sends a very strong signal to businesses and financial institutions," she said. "Even if the word mandatory is not in the actual text, it is conveyed through the language of 'ensure that' and then 'with requirements'. Any business and financial institution that is following this should now be preparing, if they're not already, to assess and disclose."

To the chagrin of many, a call for businesses to reduce their negative impacts on biodiversity by half by 2030 was also removed from the Target and replaced with a limper call for businesses to progressively reduce these impacts. Proposals to tackle the impact of consumption and production on nature was also watered down, with an earlier draft's call for a halving of the footprint of production and consumption swapped out for a similarly imprecise commitment "to reduce the footprint".

Maelle Pelisson, advocacy director for Business for Nature, lamented the removal of a specific target on slashing negative impacts on biodiversity, but said the big fight had been won. "There was a lot of concern around the lack of baseline to put a target to," she said of the negotiations around a numeric target for business impacts. "Disclosure will create that baseline."

Disclosure, she added, would open the way for governments and investors to have the information they can need to make the right policy decisions, she said. "That's going to lead to action."

Biodiversity finance

The Kunming-Montreal pact does not shy away from identifying financial institutions and businesses as critical actors in the delivery on climate goals. The word 'business' is mentioned three times in the text, amid a smattering of further references to the private sector and its activities. 

Nowhere is business' active role more obvious than in Target 19, which focuses on how to raise the money needed to fund nature protection. It calls for countries to raise "at least $200bn" annually by 2030 to meet biodiversity goals but concedes that international climate finance can only reach $30bn annually in this period. The onus is on the private sector and domestic government spending to bridge the gap.

Governments have committed to working closely with investors and companies to raise these funds, through private finance, blended finance, and more generally by encouraging the private sector to invest in biodiversity, with impact funds singled out as an important avenue to explore. They have also committed to "stimulate" innovative schemes that can raise funds for nature, including payments for ecosystem services, green bonds, biodiversity offsets and credits, and benefit sharing mechanisms.

The private sector's contribution to protection, conservation, and restoration actions worldwide is currently just a small fraction of overall funding, with a recent UN report putting its share at just 17 per cent. The subtext of the Kunming-Montreal pact is that this percentage will need to change, and fast, if the requisite funds are to be raised in time.

There are three broad avenues for businesses to raise funds for biodiversity protection. The first is by investing in projects that protect, conserve, restore, sustainably use, and manage nature - either directly or through the purchase of biodiversity offsets. The second is by putting capital expenditure behind transforming business operations to become more nature positive, for instance by investing in regenerative agriculture programmes or efforts to reform supply chain so they cause less land degradation, water pollution, and deforestation. And the final piece is through philanthropic initiatives. Businesses now have their work cut out to ramp up capital across all three areas, working closely with government, conservation organisations and the investor community to work out the business case of these investments. The good news is that most options can help companies progress towards climate goals.

Subsidy reform

One of the strongest sections of the Kunming-Montreal framework pledges for countries to collectively reduce harmful subsidies by at least $500bn a year by the end of this decade. They are also expected to identify, eliminate, phase out or reform environmentally harmful incentives before the end of 2025.

This should set alarm bells ringing for businesses who currently receive public money for activity that harms the natural world. The fishing, agriculture, fossil fuel, and various other commodity-related businesses have been put on notice. But it also opens up major opportunity for those companies currently short-changed by governments' self-destructive skew towards environmentally destructive subsidies. Subsidy reform is in the interest of not only the planet, but also to the many businesses and workers whose long-term prospects are being hurt by public funds being pumped into extractive business models and sunset industries.

The UN estimates that between $500bn to $2tr annually is funnelled to environmentally harmful subsidies around the world. In the UK, the government's own accounting reveals just a slither of subsidies go towards activities that have a positive environment impact. An analysis of the 2021 Autumn Budget revealed that a meagre £34bn of the £2.6tr package was channelled into programmes that had a 'positive' or 'strongly positive' impact on climate change, circular economy, water management, air quality, and biodiversity. Meanwhile, more than three per cent, £82bn, went to activities that had a 'negative' or 'strongly negative' impact on the environment. The bulk of the funding - some £2.5tr - was deemed neutral.

The UK's ongoing drive to move away from the EU's farming subsidy system, which rewards farmers largely based on the amount of land owned or managed, and towards a system that rewards environmental stewardship, biodiversity protection, and sustainable farming practices promises to significantly shift the distribution of public funds in the UK in favour of nature. But questions remain about the effectiveness of the reforms and any move to encourage more environmentally responsible farming practices would need to be followed by actions to redirect subsidies going towards fossil fuels and deforestation-linked companies.

"The UK is one of very few countries already actively into a process of shifting agricultural subsidies - $2bn in England and $3bn in the UK," said Tony Juniper, chair of Natural England, who argued the UK's planned Environmental Land Management scheme was "one of the biggest levers" for the government to deliver on the goals of the Kunming-Montreal agreement. "Energy and agriculture have been identified for decades as being major drivers of the change we don't want to see in the world," he said. "So, switching those subsidies into a positive space, from fossil fuels into renewables and energy efficiency, and from damaging agricultural practices and to nature positive ones are the two big headings." 

Sustainable consumption

The deal calls on businesses to provide information to consumers that promotes sustainable consumption patterns, as part of a drive to reach the somewhat vague goal of reducing the overall environmental footprint of consumption by 2030. It also calls on governments to introduce policies, legislation, and regulatory frameworks that encourage and enable individuals to make sustainable consumption choices; improve "education and access to relevant and accurate information and alternatives"; halve global food waste; "significantly" reduce overconsumption; and "substantially" reduce waste generation.

The sentiment may be welcomed, but the lack of precision in the goals have not impressed campaigners, who said more specific goals were needed to give the targets around consumption and production teeth and hold businesses and governments accountable.

If badly or half-heartedly implemented, the calls for more sustainable consumption could give rise to a tsunami of greenwash. But if backed by effective policies and regulations, the call to action could give the upper hand to those businesses that are providing genuinely low impact and circular products and can prove alignment with sustainable certification schemes. In order to ensure a race to the top, it falls to businesses to push for high-integrity standards and provide clear, correct, and qualified information about the environmental impact of the products and services they sell.

In the UK, the Competition Markets Authority has set out some broad rules for companies to aspire to when communicating environmental information to consumers, and has launched a probe into alleged greenwashing in the fashion sector. But there is significantly more work to be done to protect consumers against misleading green claims and ensure those companies genuinely investing in nature positive or circular business models are rewarded for their actions. The UN text on sustainable production and consumption will provide fresh ammo to green campaigners who have long been calling on advertising regulators and companies to stop promoting environmentally destructive companies or products to consumers. But it remains to be seen if the text can catalyse a genuine revolution in consumption and production models that are currently the primary driver of nature destruction.

Time to get organised

Businesses now have a major role in pushing governments to meet the goals of the Kunming-Montreal biodivesity framework, but to in order to prove effective in driving change, players in the private sector need to get organised,

Organisations such as the Aldersgate Group, We Mean Business, the Climate Group, and the Prince of Wales Corporate Leaders Group have been instrumental in harmonising business calls for climate action and corralling support for ambitious long-term green policy frameworks in recent years. More mainstream business organisations have also increasingly called for greater climate action from government, with the country's largest business organisation CBI taking a strong stand on net zero, green jobs, and clean energy. But the architecture around business action on nature remains less established and less well coordinated.

"We absolutely need those kind of proactive business groupings that have been so important in helping us drive forward the climate agenda," Craig Bennett, CEO of the Wildlife Trusts told BusinessGreen. "I would really encourage them to fully embrace that on nature too… There needs to be an education and awareness piece in the business opportunity to build a much greater understanding about how important biodiversity is, and how ultimately the economy is a wholly owned subsidiary of nature, and not the other way around."

There is a significant disconnect between the UK's loud advocacy for the 30 by 30 nature protection target on the global stage and its domestic nature policy agenda. Research has calculated that just 3.22 per cent of England's land and eight per cent of its seas is effectively protected for nature, and yet the environment targets published just last week did not include goals for river health and protected sites, and weakened other targets. 

Bennett urged businesses to now use their voice to call on Ministers to close the gap between domestic policy and the targets agreed in Montreal. "The government is living in cloud cuckoo land if it doesn't realise that [achieving the goals] is going to require a massively lifted ambition and approach that we've had to date on nature in the UK," he said. "We really need to see business step up to demonstrate some of the leadership to make this happen and hold governments to account to deliver on the spirit and substance on the pact."

There are some signs this is starting to happen. More delegates from business and finance attended COP15 that any other UN biodiversity convention. A UN spokesperson pinned the number at around 984, out of roughly 12,000 registered delegates. While some green groups spoke out against what they dubbed excessive "corporate capture" of the meeting, the involvement of business at the summit was broadly praised by negotiators and NGOs. One negotiator reflected that the progressive business voice had cut through across a number of issues, such as nature-related disclosure, resource mobilisation, and greening finance.

Many others noted the increased presence of business and finance experts - and the growth of the summit's 'Blue Zone' for businesses to network and take part in panels - was a welcome sign of the UN's Convention of Biological Diversity shift away from a more staid, science-based organisation and towards a more high-profile, outcome-based outfit.

However, the transformation is far from complete. COP15 was significantly smaller than its more high profile climate equivalent, spread across a handful of pavilions and conference rooms over two floors. Meanwhile, there was a notable absence of top brass among a sea of sustainability and biodiversity leads from business, with onlyt around 10 CEOs counted among the summit attendees.

The conference's timing in the weeks before Christmas and towards the end of the forth quarter was cited by many observers as the reasons for a poor showing from CEOs, alongside the lack of world leaders.  "A lot of colleagues we know had booked off time in their calendar [for COP15], but they couldn't see their role," said Eva Zabey, executive director of the Business for Nature campaign. The way the denouement of the Summit coincided with a World Cup final further eroded the amount of global media coverage the final deal secured.

As such, Benj Sykes, environment lead at Orsted, said it was critical that CEOs came to future Biodiversity summits, alongside world leaders. "It's important to have CEOs and its important to..

* This article was originally published here