Is “Nature Positive” the new “Net Zero?”

On Monday, COP16 - the United Nations Biodiversity Conference of the Parties (COP) to the UN Convention on Biological Diversity -  kicked off in Cali, Colombia. Despite previous UN meetings on biodiversity being the realm of NGOs, activists, and governments, companies are now flooding in - this year’s event is expected to have more than 1,000 private-sector participants, and ‘nature positive’ goals are moving up the corporate agenda.

The new term of art is “Nature Positive” - defined as limiting and reversing biodiversity loss, with a goal of increasing nature by 2030. However, with so many companies brandishing the term around, some wonder if it is becoming a buzzword and if biodiversity is the next area ripe for greenwashing. 

Conserving nature is harder to measure than climate, which has clear units of measurement (tons of CO2e). Advocates are pushing for a global biodiversity framework with comparable and consistent metrics. Marco Lambertini of the Nature Positive Initiative said: “The climate community did a super important thing: straight after Paris, they developed a net zero pathway, and then they attached a global standardised way to measure emissions. Now, we need to do the same for nature.”

The Taskforce on Nature-related Financial Disclosures (TNFD) had a series of announcements at COP16, including that they were nearing 500 members. CDP also made an announcement that the number of companies making biodiversity data disclosures has increased by 43% since COP15 (2022). 

However, more guidance is needed for companies on how they can help preserve nature, which was one of the goals of this COP. The World Business Council for Sustainable Development announced plans at COP16 to meet this need for more guidance and harmonize nature-related metrics used by corporations to help them track progress toward the nature-positive goal. These guidelines will be released in 2025 at COP30 (the climate COP) in Brazil. 

COP16 comes at an inflection point for biodiversity. A WWF report released this month revealed a catastrophic 73% decline in wildlife population sizes over the last 50 years. To accelerate progress toward biodiversity goals, the other issues of this COP include:

• National Biodiversity Strategies and Action Plans (NBSAPs): The Kunming-Montreal agreement at COP15 two years ago set out 23 targets and four goals to meet before 2030, and countries were supposed to present their plans at this year’s meeting. WWF created this handy tracker to show what countries have made plans and their quality. So far, we only count 20 out of 196. 
• Biodiversity Financing: Nature is related to around 50% of global GDP, and investors are beginning to recognize this connection. This is why companies are setting more nature-related goals, and nature funding has gone up to $208bn from $166bn three years ago. However, this is far below the recommended $1.15 trillion in annual funding needed for conservation. 
• Biopiracy: One of the big issues at COP16 concerns who owns nature’s genetic information. Companies have been using this information to create new pharmaceuticals, cosmetics, and more. Countries rich in biodiversity believe they should be reimbursed for genetic information used for profit, and a deal could be made at COP16 that gives them a percentage.

The scale of the biodiversity problem and the work that needs to be done here may feel overwhelming, and with biodiversity rates continuing to decline at record rates, time is of the essence. With the climate COP (COP29) in Baku in less than a month, and with the interconnected nature of biodiversity and climate action, some are calling for reform of the COP process and to combine these two events. 

Climate Voters Having A Big Impact

The US election is just around the corner and, so far, the climate issue has faded to the background amongst the super-heated campaign rhetoric. However, early voting data shows that climate voters could have a bigger impact than previously thought, especially in vital swing states. According to the nonpartisan nonprofit Environmental Voter Project (EVP), over 50,000 first-time climate voters (who say climate is their top issue) have participated in early voting. In every swing state except Georgia, they are turning out at higher rates than other voters.

The EVP estimates there could be as many as 230,000 first-time climate voters in Arizona and 250,000 in Pennsylvania, both crucial swing states, where just a few thousand votes have determined previous elections.

With such a tight race and climate voters coming out in force, Bill Mckibben argues it may now be time for Democratic hopeful Kamala Harris to start playing her climate card. Mckibben advises Harris to “aggressively remind voters nationwide of what’s at stake, maybe in an ad with a drone shot of the destruction caused by Hurricanes Helene and Milton near Augusta or Asheville or Tampa.”

SEC Fines WisdomTree over ESG

Despite closing its ESG Enforcement Task Force a few months back, the US Securities and Exchange Commission (SEC) seems to be accelerating ESG enforcement. 

This week, the SEC announced they would issue a fine against the asset manager WisdomTree of $4 million for misstatements in their ESG funds, which failed to make their own ESG investment criteria. The SEC found that three of their ESG-labeled funds had oil, gas, and tobacco investments. WisdomTree agreed to the fine and a cease and desist for the funds. Sanjay Wadhwa of the SEC’s Division of Enforcement said, “The funds at issue in today’s enforcement action made precisely the types of investments that investors would not have expected them to based on WisdomTree’s disclosures.”

SAF Taking Off

Sustainable Aviation Fuel (SAF) has been slow to pick up due to its increased costs compared to standard jet fuel. However, as tax breaks and minimum requirements for SAF kick in, airlines are increasingly purchasing and implementing sustainable fuels. In the US, this week, a bill was introduced to extend the SAF tax credits under the Inflation Reduction Act until 2037, and the Department of Energy offered $3 billion in loans to two major SAF projects.

Starting on Jan 1st, 2025, Europe’s ReFuelEU Aviation rule will require fuel providers at all EU airports to ensure that 2% of fuel is SAF, rising to 6% in 2030 and 70% in 2050. This has forced some EU airlines to apply environmental surcharges to their ticket prices. 

The new rules are driving new agreements from major airlines and SAF providers. This week, a notable agreement from SouthWest and Valero for 35 million gallons of SAF will provide SouthWest with 35% of its fuel from Chicago’s O’Hare airport for 2025.

Investors Prioritize Sustainable Investments

The second annual “Sustainability in Private Equity” report I co-authored with my colleagues at BCG highlights that sustainability is becoming a critical factor for private equity firms as it is now considered a value creator. 

The research found that although private companies lag behind public companies in decarbonization strategies, they outperform public companies regarding diversity and job creation. Over the next three years, 85% of the surveyed firms said they expect to increase their prioritization of sustainability-related topics, and almost 70% said that companies that consider sustainability warrant larger valuation.

In other good sustainability investing news, new research from the European Investment Bank found that 61% of European companies are investing in climate mitigation and adaptation.

The views expressed on this website/weblog are mine alone and do not necessarily reflect the views of my employer. 

Other Notable News:

• The Supreme Court of the United States (SCOTUS) has undercut another EPA legal defense. Previously, lawsuits challenging EPA rules had to be filed in the U.S. Court of Appeals for the District of Columbia Circuit, but now SCOTUS has changed the rules, allowing lawsuits to be filed in regional courts that are less favorable to EPA.
• Carbon credit verifier Verra has defended its policies after a former board member was charged with carbon offset fraud.
• The EU has used more than €4.8 Billion generated from its emissions trading system (ETS) to invest in decarbonization projects. The fund was boosted by spikes in the price of carbon and the expansion of the ETS and supported 85 climate tech projects.
• The role of the Chief Sustainability Officer is always evolving. This article summarizes some of the current trends and insights for CSOs. 
• An investigation by non-profit Mighty Earth found that major UK supermarkets and fast-food chains could be at risk of breaching upcoming UK anti-deforestation legislation, which is similar to the EU’s Deforestation Rule.
• New research shows that protests from extreme groups, like Just Stop Oil, can increase support for more moderate climate groups, like Friends of the Earth.
• An environmental activist group has reported BlackRock to the French securities regulator. The activist group claims BlackRock does not comply with ESG fund regulations. BlackRock denied the allegation. 
• In another greenwashing scandal, an environmental group is suing Tyson Foods for having a misleading net zero by 2050 claim without a plan to get there.
• The Hong Kong Monetary Authority (HKMA) announced a sustainable finance action agenda, requiring banks to set net zero financed emissions goals and report on climate risks and opportunities.

Notable Podcasts: 

• This week’s The Climate Rising podcast from the Harvard Business Review features an interview with my colleague BCG Global Chair Rich Lesser. Rich shares how BCG is helping clients walk the walk with net-zero commitments and the sustainability transition. He also suggests ways businesses can step up to create meaningful changes when faced with mounting climate risks, AI, and supply chain disruptions.
• This week’s edition of the ESG Insider discusses the upcoming COP29, the so-called “Finance COP.” The podcast team talked to CSOs and climate transition financing experts to discuss the potential for increased public and private financing and blended financing, as well as the need for a just transition.

Notable Jobs:

• Senior Associate, Client Solutions, Re:Co Insights, London, UK
• Carbon Markets Lead, Patch, San Francisco, US
• Environmental Justice Associate, Carbon Direct, Remote
• Sustainability Platform Analyst, Postion Green, Buffalo, New York
• Carbon Reduction Initiative Manager, Google Chicago, IL
• Director, Strategic Initiatives, ESG Reporting & Engagement, Walmart, Bentonville, AR
• Head of Sustainability, 7-eleven, US
• ESG Operations Manager, Uber, New York