Alignment of financial flows: channeling public and private investment towards nature

Background and context

Our global economy is highly dependent on nature. Biodiversity loss and climate change represent significant risks to corporate and financial stability. The risks of inaction are immense. In its 2021 Global Risks report, the World Economic Forum highlighted that the three most severe risks at a global scale over the next 10 years are climate action failure, extreme weather, and biodiversity loss, and the five most menacing long-term threats are all environmental. But the opportunities from action are equally huge.

Tackling biodiversity loss by aligning financial flows with global biodiversity targets will be an important part of the solution in terms of climate change, poverty reduction and equitable development, particularly in developing countries. By integrating nature-related financial risks, impacts and dependencies into investment decisions, by scaling up nature positive investments such as nature-based solutions, restoration of degraded ecosystems, sustainable agriculture, fisheries and infrastructure, and finally by disclosing nature-related financial risks and opportunities, the financial sector will make the difference.

The Post 2020 Global Biodiversity Framework, to be adopted at COP15-2 in Montreal, once adopted, will be translated into actions, policies and regulations at regional and national levels that will have direct consequences on how business and financial institutions operate and how they can transform their business models.

Both the public and private finance sector needs to align their activities and investments with nature pathways to achieve the 2050 vision of living in harmony with nature.

But why is the alignment of public and private financial flows with the GBF so important to the successful implementation of the GBF? And what would be the most compelling message of the GBF to send to public and private financial institutions in goal D and targets 14, 15 and 19?

How can public and private financial institutions work together (e.g. partnerships between public financial institutions and impact funds, blended finance examples) and reinforce each other?

This event is organized by the International Development Finance Club (IDFC) and the Finance for Biodiversity Foundation (FfB foundation), with the support of the Interface Dialogue Finance & Biodiversity (IDFB).

Objectives of the side-event

The goals of this side-event are to:

  1. Raise attention of CBD delegates and stakeholders on the absolute necessity to align public and private financial flows to achieve the 2050 vision of living in harmony with nature,
  2. Discuss the role of public development banks and of private financial institutions in greening finance and financing green separately and together.

Tentative program of the side-event

Introduction and moderation

Moderation: AFD/IDFC or a think tank or an NGO?

1- High-level introduction: Why is it important to align public and private financial flows in the context of the nature crisis?

Keynote speaker: Head of a party delegation or a representative of BIOFIN / OECD / TNC (TBC)

Reactions by:

  • High level speaker from the public financial sector : a representative of KfW
  • High level speaker from the private financial sector : Suresh Weerasinghe (Aviva) Chair of the Advisory Board of Finance for Biodiversity Foundation

Why is the alignment of public and private financial flows with the GBF so important to the successful implementation of the GBF? And what would be the most compelling message of the GBF to send to public and private financial institutions in goal D and targets 14, 15 and 19?

2- First Q&A session with on-site participants

3- Panel debate: How to achieve the channeling of public and private investments towards nature?

  • Two representatives of public development banks: DBSA, CAF
  • Two representatives of private financial institutions: Lloyd Stevens, director of Ecobusiness fund and Stephan Morency, CIO of Fondaction
  • An NGO: WWF international (Margaret Kuhlow) or TNC (Andrew Deutz) (TBC)

What is already being done by public and private financial institutions? What are some examples of successful co-financing/financial mechanisms/partnerships and what are the gaps that need to be filled to go further?

4- Second Q&A session with on-site participants

5- Concluding remarks and take-aways: Head of a Latin-American party delegation (TBC)

Total duration: 90 min

Format: On site and remote