Disponible en Español
Biodiversity and Environmental Challenges for the Financial System
November 30 - December 2, 2021.
The conference on Biodiversity and Environmental Challenges for the Financial System was held on a digital format on November 30- December 2, 2021. It was jointly organized by the Center for Latin American Monetary Studies (CEMLA) and Banco de México. It was attended by more than 520 representatives from more than 200 institutions, including associates and collaborating members of CEMLA. The meeting was focused on topics including: biodiversity loss and financial risk; assessing its impact and integration in the financial decision process; and the scaling-up of investment in biodiversity.
Panel 1: Assessing biodiversity risks on the financial system.
This panel discussed different aspects of financial risks stemming from biodiversity. In the context of an increasing demand for ecosystem services, there is a rapid deterioration of natural capital as well as other environmental issues that put the supply of ecosystem services in risk. Some takeaways of the panel were the following:
- · The economic and social impacts of the decline in ecosystem services can be alleviated if the value of nature is incorporated into economic and financial decisions, and with a proper investment in the recovery and protection of natural capital. There is a growing interest and appreciation from the financial institutions and central banks of the dependency on ecosystems.
- · Climate change has been a starting point to address biodiversity and other environmental issues that affect the financial system. The inclusion of biodiversity loss in frameworks should consider current restrictions given by data limitations and modelling complexity.
Panel 2: Disclosures, information, and tools.
This panel discussed information challenges in the financial system to incorporate biodiversity risks in financial decisions. Some takeaways were the following:
- · It was amply discussed the importance of considering jointly climate change and environmental degradation. The inaction to assess and manage these risks together could derive in higher costs and in stronger feedback loops between them.
- · Biodiversity data tends to have problems of availability, completeness, accessibility, consistency and standardization. These problems hinder investments decisions due to the lack of assessment of ecological impacts.
Panel 3: Modelling approaches to biodiversity finance.
This panel discussed the challenges of incorporating biodiversity risks into financial decision processes. Some takeaways were the following:
- · In contrast to climate change where metrics such as carbon dioxide emissions can be easily tracked, the complexity of biodiversity loss requires a wider pool of metrics and interactions for its risk assessment. For instance, preventing deforestation and the preservation of endangered animal species have different drivers and effects on ecosystem services.
- · Metrics are bounded to practicality and cost-effectiveness criteria which matter when implementing policy frameworks focused on reducing environmental risks.
Panel 4: Capital markets and biodiversity
This panel discussed the relevance of biodiversity for different organizations focusing on how they can align their conservation efforts with the transformations in capital markets, considering aspects ranging from the solutions and innovations to the regulatory transition.
Panel 5: Success cases and opportunities in financing land use, sustainable agriculture and reforestation
This panel was devoted to discuss experiences and proof of concepts for a better usage of land resources, focusing on the mitigation of biodiversity risk through sustainability and the reduction of dependency on ecosystem services. Some takeaways were the following:
- · Agricultural production has a great influence on biodiversity, while unsustainable practices have a major negative impact. Agricultural production is one of the major sources of ecosystem transformation, and its environmental costs have a disproportionate effect on the lower income population.
Panel 6: Financing of marine and coastal resources: success cases and opportunities
This panel was focused on the characteristics of marine and coastal resources, and the sharing of experiences about conservation efforts and more sustainable ways to benefit from its ecosystem services. Some takeaways were the following:
- · The exploitation of marine resources and its ownership rights creates different challenges, particularly on how to manage these resources. Despite the major role of governments in the ownership and ordering of these resources’ exploitation, there are still challenges due to the inadequate planification and monitoring of applicable policies that cause biodiversity losses.
Henry M. Paulson Jr.
Paulson Institute; Latin America Conservation Council (LACC)
Mr. Paulson is the founder and Chairman of the Paulson Institute. He was the 74th Secretary of the Treasury under President George Bush from 2006 to 2009. He was Chairman and CEO of Goldman Sachs from 1999 to 2006. Among his activities related to biodiversity, green finance and conservationism, he was Chairman of the Board of Directors for The Nature Conservancy, and in 2011 founded the Latin American Conservation Council, which he co-chaired until 2017; he also co-chaired the Risky Business Project from 2013 to 2017. He is a graduate of Dartmouth College and earned an MBA from Harvard University.
Elizabeth Maruma Mrema
Convention on Biological Diversity
Ms. Mrema is the Executive Secretary of the Secretariat of the Convention on Biological Diversity since June 2020, and was the Acting Executive Secretary since December 2019. She was the Executive Secretary of the UNEP/Secretariat of the Convention on the Conservation of Migratory Species of Wild Animals. Ms. Mrema also served as the Acting Executive Secretary of the UNEP/ASCOBANS (Agreement on the Conservation of Small Cetaceans of the Baltic, North East Atlantic, Irish and North Seas). She holds a Master of Law degree from Dalhousie University, Halifax, Canada, a Postgraduate Diploma in International Relations and Diplomacy from the Centre of Foreign Relations and Diplomacy in Dar-es-Salaam, Tanzania, and a Bachelor of Law from the University of Dar-es-Salaam, Tanzania.
Sir Partha Dasgupta
University of Cambridge
Sir Partha Dasgupta is the Frank Ramsey Professor Emeritus of Economics at the University of Cambridge since 2010, and Fellow of St. John’s College since 1985. His research interests include the economics of poverty and nutrition, environmental economics, economic measurement, and the economics of knowledge. He is Fellow of the British Academy and the Royal Society. He is a Foreign Member of the US National Academy of Sciences, the American Academy of Arts and Sciences, American Philosophical Society, among others. Mr. Dasgupta holds a Ph.D. in Economics from the University of Cambridge, a B.A. (Hons.) in Mathematics from the University of Cambridge, and a B.Sc. in Physics from the University of Delhi.
Stanford Natural Capital Project, University of Stanford
Ms. Daily is the Director of the Center for Conservation Biology at Stanford, a co-founder and the Faculty Director of the Stanford Natural Capital Project, the Bing Professor of Environmental Science in the Department of Biology at Stanford University, and a senior fellow at the Stanford Woods Institute for the Environment. Her works includes nature, biodiversity change, the impact of human dependence on nature, conservation and sustainability, including the financial angle. She holds a Ph.D., a M.S. and a B.Sc. in Biological Sciences from Stanford University.
Global Steering Group for Impact Investment
Sir Ronald Cohen is Chairman of the Global Steering Group for Impact Investment, The Portland Trust and the Impact-Weighted Accounts Initiative at Harvard Business School. He is a co-founder director of Social Finance UK, USA, and Israel, and of Big Society Capital. He was co-founder Chair of Bridges Ventures. He co-founded and was Executive Chairman of Apax Partners Worldwide LLP. He was a founder director and Chairman of the British Venture Capital Association, the European Venture Capital Association. He is a member of the Board of Dean’s Advisors at Harvard Business School and Vice-Chairman of Ben Gurion University. He is a former director of the Harvard Management Company and the University of Oxford Investment Committee. He holds an MBA from Harvard Business School and a degree in Philosophy, Politics, and Economics from Exeter College.
Pavan is a Goodwill Ambassador for UN Environment, promoting The Economics of Ecosystems and Biodiversity (TEEB) implementation and Green Economy transitions. He has served on the boards of Conservation International (CI), the Global Reporting Initiative (GRI), the Stockholm Resilience Centre (SRC), and on the TEEB Advisory Board. Pavan is the founder and CEO of GIST Advisory, a consulting firm with emphasis on metrics. Pavan holds a degree in physics from University College, Oxford.
- Playlist of the event on Banco de México YouTube channel
- Interim Report of the NGFS-INSPIRE Joint Study group on Biodiversity Loss & Financial Stability
- World Bank Report "The Economic Case for Nature"
- Gross Ecosystem Product (GEP)
- SIF Scoping Study: Nature-related Risks in the Global Insurance Sector