Summary
Climate and biodiversity: explore the main outcomes of this year's COP16 & COP29 and uncover investment opportunities in nature-based solutions
Key takeaways
- Interconnected Issues Demand Integrated Action: Biodiversity, climate change, and land degradation are deeply intertwined challenges requiring cohesive solutions that simultaneously mitigate climate impacts, adapt to their effects, and preserve biodiversity. Stakeholders — governments, businesses, and investors — are also increasingly recognizing the value of integrated approaches across the biodiversity and climate agendas.
- Separate Frameworks, Growing Synergies: Since the 1992 Earth Summit, three environmental issues (climate, biodiversity and land degradation) have been addressed through distinct UN Conventions, known as COPs. However the recent COPs, have seen greater alignment among these issues, reflecting a recognition that their solutions are mutually reinforcing. This trend offers investors a clearer pathway to contribute across multiple sustainability goals.
- Strong Implementation Mechanisms put to the Test: The Paris Agreement included a strong implementation mechanism to progressively raise the ambition of national commitments until the world is on the path of a global warming limited well-below 2°C. Even though the target is still far from reach, there has been a first inflection with new implemented climate policies putting the world on a path towards +3,1°C by the end of the century vs. +4,2°C when the Paris Agreement was adopted. The Global biodiversity framework included a similar mechanism to meet the target of stopping and reversing the trend of biodiversity loss. The efficiency of these two mechanisms is currently being tested by the geopolitical context and the difficulty to reach international agreements.
- Financing Gaps Highlight Opportunities for Innovation: Disappointing negotiations around the new collective quantified goal (NCQG), show that challenges persist in ensuring an equitable North-South financial transfers. While public financial flows remain limited, mechanisms like the «Cali Fund» for biodiversity and indigenous payments and the USD 2.5 billion committed by the Green Climate Fund (GCF), signal progress. However there are still significant financing gaps, highlighting a growing demand for innovative private-sector financing solutions.
- Innovative Finance Models Gain Momentum: Innovative financing mechanisms such as blended finance vehicles, climate bonds, climate and biodiversity credits, debt-for-nature swaps are pioneering ways to involve private capital in environmental goals. These mechanisms are increasingly attractive for investors seeking long-term returns that align with biodiversity and climate objectives, offering scalable solutions for bridging the financing gap.
- Real-Economy Progress and Corporate Momentum Acceleration: Contrasting with the heightened policy and political uncertainties highlighted during the COPs, 2024 saw a record growth in clean energy markets, as well as an overall expansion and adoption of transition plans, with many businesses and financial institutions across the world committed to, or with the intention to set, net-zero goals. The sustainability momentum is also on the rise with a growing movement towards a better understanding of companies of their impacts
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