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Nature Based Recovery- Climate Leaders Live
19 Plays4 years ago
The UK’s recovery efforts need to prioritise nature, but how can the restoration economy thrive through great public-private support and corporate involvement? How should the UK’s post-crisis economic recovery efforts prioritise nature and biodiversity? What are the nature based solutions required to slow the pace of climate change and how can this spur greater innovation?
Listen to a panel of experts including Marine De Bazelaire, group advisor on natural capital at HSBC. This clip was recorded at the Climate Innovation Forum. organised by Climate Action.
This episode is part of HSBC’s Business Plan for the Planet podcast mini-series, which focuses on ESG insights. Hear from experts whose work is at the heart of sustainability-linked trends and opportunities, as well as from businesses that are delivering change for a better future for us all.
To find out more about HSBC’s Business Plan for the Planet programme, click here
Hosted on Acast. See acast.com/privacy for more information.
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Transcript
Introduction & Podcast Overview
00:00:01
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This is HSBC Global Viewpoint, your window into the thinking, trends and issues shaping global banking and markets.
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Join us as we hear from industry leaders and HSBC experts on the latest insights and opportunities for your business.
00:00:18
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A heads up to our listeners that this episode has been recorded remotely, therefore the sound quality may vary.
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Thank you for listening.
Nature-Based Solutions: Definition & Importance
00:00:32
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Welcome to the Business Plan for the Planet podcast, a series centered around ESG insights.
00:00:38
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In these episodes, you'll hear from experts whose work is at the heart of sustainability-linked trends and opportunities, as well as from businesses that are delivering change for a better future for us all.
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Join us as we shine a spotlight on their commitment to a sustainable future.
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Thanks for being with us.
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I'm Nick Gowing, your chair.
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We're going to deep dive into the nature-based recovery.
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We ask how we can put nature and biodiversity at the heart of our recovery.
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Let's now go to Mark Goff, who is CEO of Capitals Coalition, to moderate the next discussion.
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Mark, the floor is yours.
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Thank you very much and welcome, everyone.
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Now, nature's having a bit of a moment, isn't it?
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It's being mentioned all over the place, whether it's in the G7 communique, the New Atlantic Agreement that's come through.
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So there's all of this activity going on.
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But in this session here, we're going to delve down a little bit more into what it really means and the restorative nature of nature in this way.
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I've got a great panel with me here today.
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We've got Cecile, who's going to be talking to us from University of Oxford.
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on nature-based solutions.
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We've also got Maureen, who's the group advisor on natural capital at HSBC.
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We've got Mike, who's a strategic advisor for sustainable business, and Leslie as well, the vice president of environmental social governance at MSCI.
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So I'm going to start by coming to you, Cecile, first of all, and can you just explain to us what nature-based solutions actually are?
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Can you just give us a bit more of a definition of what they are?
00:02:11
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Okay, thank you, Mark, and thank you for inviting me to this great panel.
00:02:15
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It's a brilliant panel and I'm very much looking forward to the discussion.
00:02:19
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As you say, we have this extraordinary window of opportunity and NBS has never been so prominent in the political agenda.
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But we're also at a difficult point because there are pitfalls to scaling NBS and this is what we'd like to talk about today.
00:02:36
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So I wanted to start by giving the context of nature-based solutions, why they're an important concept and why they're different to other ecosystems approaches.
00:02:48
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How much they can contribute to climate mitigation is something we'll address later, I'm sure.
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And perhaps more importantly, how much they can contribute in terms of adapting to climate change, to sustainable development, to protecting and restoring our biodiversity and economic recovery.
00:03:08
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So to put it simply, nature-based solutions involves working with nature to address societal challenges, to provide benefits, and this is important both for human wellbeing and for biodiversity and for climate.
Benefits of Nature-Based Solutions
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and specifically they involve the activities to protect, restore and better manage natural or semi-natural ecosystems.
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And here we're talking about all ecosystems.
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So the concept of nature-based solutions is rooted in the understanding and the mounting evidence that ecosystems support our societies and our economies in multiple ways.
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by providing food and water security, temperature regulation, as well as carbon mitigation benefits, flood or erosion control, or coastal defenses, livelihoods, and many, many ways.
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But it also arises from this understanding
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that biodiversity and climate change stem from the two of the biggest problems we face, stem from some of the same drivers, same problem drivers, and also have similar solutions.
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So just to wrap up, to give you an example, land use change accounts for approximately 30% of biodiversity loss.
00:04:28
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It's the biggest cause of biodiversity loss as described by the IPVS report in 2019.
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It's also the second biggest source of greenhouse gas emissions, about 23% of greenhouse gas emissions that comes from the IPCC 1.5 report.
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that was published around the same time.
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So addressing land use change through nature-based solutions can in theory help us address both these issues, biodiversity loss and climate change.
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But in practice, we need to look at the small prints here.
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We really need to understand the small prints because whilst the ultimate goal of nature-based solutions is to
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address sustainable development to promote sustainable development with benefits to climate, biodiversity and society.
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This only comes from healthy, resilient ecosystems that have their functional integrity and that are ecologically sound that will provide these benefits over the long term and be resilient to a rapidly changing climate.
00:05:31
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Thank you.
00:05:31
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So, and it's about therefore that connection between
00:05:34
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nature and climate and making sure that all of these things are together in a system there, I was hearing you say.
00:05:40
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So coming to you now, Leslie, in the financial markets, we're seeing lots of activity at the moment.
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Where are you seeing this momentum most?
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Where are things moving?
Biodiversity in Financial Markets
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Sure.
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Thanks, Max.
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And thanks for having me to discuss this very important topic.
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Maybe I'll just say a few words on MSCI ESG research for the participants that are not familiar with our company.
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So we provide ESG research data and insights on listed issuers, on more than 8,000 issuers.
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And we provide that data and research to more than 1,700 clients, mainly institutional investors.
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And to your question, Mark, I would say that since 12, 18 months, the subject has really gone from being a raw topic to be the star topic that everyone wants to talk about.
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And this extremely rapid progression within our clients agenda has really been impressive.
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I think having worked in the ESG space for more than 10 years, I think it's the first time that I'm seeing a subject exploding at such a fast pace and also being underpinned by a myriad and multiple
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innovations in terms of measurement metrics, in terms of policy implementation and also initiatives and coalitions from investors.
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The only thing that I need to add to moderate that optimism is that this momentum remains very regional.
00:07:17
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I would say more than 80% of our demand from clients on biodiversity comes from Europe.
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and particularly from three countries, France, the UK and the Netherlands.
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And among those European clients, a lot of them consider that biodiversity is as important as climate and that those two issues really need to be addressed together.
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So I think that resonates really well with what was just mentioned by Cecil.
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A lot of our European clients would list biodiversity as the key, as three most important ESG topics for this year.
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And then we are also seeing a bit of demand from our Asian Pacific clients.
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But I would say that our US clients have remained fairly quiet on the subject.
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So there are some areas where it's moving much faster than others.
00:08:13
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I think we've seen this pattern before, haven't we?
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And therefore, Mike, coming to you, you've been in this game for a little while, if you don't mean me saying.
00:08:20
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You've been around the block with a lot of these things.
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How do we actually connect a lot of this into value chains?
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Because this is a systems-based thing, isn't it?
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We can't just take things in isolation here.
00:08:30
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Well, Mark, I mean, just three bullet points to start answering that question.
00:08:34
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First is businesses fundamentally don't understand the importance of nature to their business model.
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If I walk into a boardroom now and say we've got a problem with the climate, most boardrooms, sadly looking a little bit too much like me, would turn around and say, OK, Mike, renewables, electric vehicles, stopping reducing our energy demand, sort of get the rough dynamics of what needs to happen.
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If I walk in and say there's a problem with nature, no idea.
00:08:58
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why nature is important to their business, what is a source of raw materials, as a receptor of their waste, supporting the basic ecosystem that we all depend upon.
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So that's point number one, business doesn't understand nature.
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Point number two is fundamentally
Complexity of Human-Centric Solutions for Nature
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nature demands human solutions.
00:09:14
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So if you look at the two great sectors that have been disrupted by sustainability so far, power, the shift from coal to wind and solar, and the shift from internal combustion engine to electric vehicles,
00:09:25
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within reason they haven't had to involve too many people yet small number of people involved with the the shift of the energy system clearly more people involved in terms of mobility because we've all got to drive something different but when it comes to the food system every single person on the planet is involved they consume food every day hundreds of millions of people are involved with actually producing food so solving the climate and the nature challenge for the food system is exponentially harder there's got to be human-centric
00:09:53
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And my final point, business people like me are simple.
00:09:56
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We need an endpoint, net zero we're reaching for, a definition of where we're working, scope one, two, three, pathways to get their solutions, the electric vehicles I was talking about, partnerships, race to zero to help us collaborate on the solutions, and a defined pathway that everybody can say, ah, they're following a science-based target, this must be good work by company X. If I look at nature, there's none of that.
00:10:19
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There's no endpoint, there's no pathway, there's no definition,
00:10:22
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There's no partnerships either to scale solutions that we need.
00:10:25
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So for all those reasons, putting nature at the heart of the business conversation is critical.
00:10:31
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I would suggest there is some movement on those targets and things.
00:10:34
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We now have net impact and we're just looking at net climate.
00:10:38
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And then we're also looking at nature positive in that.
00:10:40
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And you've seen that coming through in conversations more recently.
00:10:43
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There is also some work going on.
00:10:44
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But you're right.
00:10:45
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It isn't as advanced as a long way to go there.
00:10:48
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So coming to you, Maureen, now.
00:10:49
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So you're involved in potential markets here.
00:10:52
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So what's the role of markets in creating a restorative economy?
00:10:58
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Thank you, Mark, and thank you, the panelists, for your very great remarks.
00:11:04
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I agree that Nature Bay Solutions have taken the lead on the sustainability conversation in companies and in the financial industry quite recently, but quite massively.
00:11:16
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As far as the potential role of markets are concerned, I would say that the potential is massive.
00:11:23
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The current biodiversity financing gap is estimated between 600 billion and roughly 800 billion dollars per year.
00:11:34
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And it's only 3% of climate finance dedicated to nature.
00:11:39
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So that's 10 to 15 billion dollars a year.
00:11:44
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Being said that, I mean, that means that markets are key to prioritise nature and create a restorative economy.
00:11:52
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To illustrate that, I mean, HSBC has announced a joint venture with Pollination a year ago called CAM, Climate Asset Management, with actually the ambition to be a leader in financing...
00:12:09
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And when we say financing, I mean, it goes through bonds, through equity, through real assets, actually, financing lands, regenerative agriculture, and...
00:12:25
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also oceans ecosystems, but also commodities, purchasing the produce created from natural capital.
00:12:32
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And I think on that, there's actually a lot that we can link with the voluntary carbon market.
00:12:39
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But when I say voluntary carbon market, I'm talking about...
00:12:43
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voluntary action.
00:12:45
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And I think that if
Regulation & Frameworks for Nature in Finance
00:12:48
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we want to reach the potential of markets there to restore and protect nature, we need actually regulation.
00:12:58
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Regulation is going to be key to bring that market at scale.
00:13:03
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Excellent.
00:13:03
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So we're seeing some commonalities coming through and how can we use governments?
00:13:08
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So what is the role you just mentioned there, Maureen, the idea of governments incentivizing?
00:13:13
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There's lots of different incentive mechanisms here.
00:13:15
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We've talked around voluntary markets.
00:13:17
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We've talked about the nature-based solutions.
00:13:19
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We talked about the financial sector here.
00:13:21
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What is it, therefore, that we need to start bringing in to change the rules on this?
00:13:26
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Because as Mike's saying, there isn't the same standardized process.
00:13:31
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So do we need to do that first?
00:13:33
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I can jump in because I think it links directly with what Mike said.
00:13:36
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I mean, regulation is about first to me, setting a vision such as being nature positive.
00:13:43
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I mean, and UK has been key there during the G7, announcing that it will be a nature positive and it leads the way for many other nations to commit to the same kind of vision.
00:13:56
Speaker
But then it's also about framework and accounting, as it said.
00:14:00
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And for now, financial accounting methods are, I would say, ill-equipped to embrace the risks and opportunities linked to nature.
00:14:09
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A lot is going on, but yes, that's how I see regulation as being key going forward on that issue.
00:14:16
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If I may just add on that, I think also in terms of regulation, it's really important that we see a momentum pushing all the key stakeholders to take action on biodiversity.
00:14:28
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And here, you know, I have in mind, and I'm sorry because I would be biased because I will refer to my country of origin, France.
00:14:36
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But I have in mind the Article 29 of the French law on energy and climate, which is pushing really the financial industry to step up the game.
00:14:44
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on biodiversity and asking those actors to disclose how they will take into account biodiversity risk within the investment strategy and how they're going to align the investment with the long-term biodiversity target that will be enacted during the convention on biodiversity and how they're going to use different metrics such as biodiversity footprint tool and measure the contribution to reduce
00:15:11
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the pressure on biodiversity loss through the investment.
00:15:16
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And I think this is key because it really involves additional stakeholders, not only the corporates, but also the financial industry to ensure that the investments are allocated towards that goal to reduce biodiversity loss and to restore biodiversity.
00:15:35
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Cecile, you wanted to jump in as well.
00:15:38
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Yeah, I just wanted to add that.
00:15:40
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So I come at this from an ecosystem scientist point of view.
00:15:45
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But on our side, there's a lot of work going on in the universities across the UK and I know in France and in other countries as well, working on addressing this question, as you said, Mike, business don't understand nature.
00:15:59
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We're having trouble monitoring the biodiversity.
00:16:03
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So addressing this question and working on developing
00:16:07
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robust but practical methodologies for monitoring biodiversity, for implementing monitoring, reporting and verification systems.
00:16:16
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And obviously the work that we've been doing, bringing together those looking at value, the natural capital protocol sets out a framework that can be used.
00:16:24
Speaker
And in fact, we're standardizing that at the moment.
00:16:26
Speaker
We're going through and making sure that the pathways that you use there are in a common language to be able to build in to things such as the reporting directive, which we know is coming quite soon.
00:16:36
Speaker
Mike, how do we make this thing real?
00:16:38
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Have you got any examples you can give us of actually real life application of this within business?
00:16:44
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Well, just building upon the very good discussion we've just had on the role of government here.
00:16:47
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I draw your attention to something that's happened in the UK with the Global Resources Initiative, GRI.
00:16:53
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that's brought civil society, government, policymakers and big business together to try and solve this intractable problem of deforestation in UK bound supply chains.
00:17:01
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You think of soy, palm oil, cocoa, et cetera out there.
00:17:04
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And the UK government's introducing a law now that will drive due diligence into those supply chains.
00:17:09
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And that's been co-created alongside civil society and business.
00:17:13
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So I think that shows a practical model forward.
00:17:17
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A couple of other examples that I really like at the moment, the work of IDH, the sort of Dutch Sustainable Trade Organisation, that's putting people at the heart of trying to build a new sustainable approach to managing not just nature, but economic value in supply chains.
00:17:34
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as well, which is critical.
00:17:35
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Go back to this point where hundreds of millions of people around the world participate in the global food system.
00:17:41
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They have to protect it.
00:17:42
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There is one scenario, we haven't got time to explore it today, that sees a significant amount of global food production taken indoors over the next 10 to 15 years.
00:17:50
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We think about vertical farms, aero farms, we think about ultimately fermented cultured meat in the lab.
00:17:56
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It's still some way away from scale.
00:17:58
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By the mid 2030s, it will hit scale and it would be brilliant for the environment on surface.
00:18:03
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99% less impact as it is brought indoors.
00:18:06
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The impact on livelihoods, not just in Africa, but across Europe in terms of small scale and medium sized farming will be devastating.
00:18:14
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And we have to walk into that mindful.
00:18:16
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There is a trade off between nature and society and both need to benefit.
Business Support for Sustainable Practices
00:18:20
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And then just a final thought on big business supporting these smallholders and producers.
00:18:26
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Again, I like the work that Kellogg's have done.
00:18:28
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Kellogg's are working with 400,000 growers around the world.
00:18:31
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to practically support them on this journey to produce things more sustainably.
00:18:35
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Better for nature, better for their livelihoods, better for their incomes.
00:18:39
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Similar work being done by Unilever, by Starbucks, by McCain, committed to 300,000 acres of regenerative agriculture to produce potatoes as well.
00:18:47
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So it's emerging.
00:18:48
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But to your point you made, to me, to my opening remarks,
00:18:51
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It's tiny in scale.
00:18:53
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I could go to the thousand biggest businesses in the world on climate and about 20 percent of them have got a coherent strategy now on climate.
00:19:00
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Net zero, scope one, two and three science based target.
00:19:02
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Twenty percent.
00:19:04
Speaker
On nature, I'd struggle to find 10 out of the thousands that can actually do that yet.
00:19:08
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And that needs to be our drive in the next decade is to upskill business and these huge scope three supply chains around the world and the conversation with the consumer to deliver nature as part of the food system.
00:19:21
Speaker
Excellent.
00:19:21
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So one of the challenges with scaling that up is going to be the complexity around this.
00:19:26
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So the confusion even between biodiversity, natural capital, these phrases seem to be thrown around nature-based solutions.
00:19:34
Speaker
Everyone's using them, but they're all being used interchangeably sometimes.
00:19:38
Speaker
So how do we get over that complexity about how we measure this?
00:19:41
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So what about finding this standard biodiversity metric?
00:19:45
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How about that?
00:19:46
Speaker
Leslie or Maureen, can you help us with that one?
00:19:50
Speaker
We do actually already measure the economic value of ecosystem services.
00:19:55
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So, meaning that, like for example, the OECD, I think, estimated the ecosystem services to range between 125 and 140 trillion dollars a year.
00:20:09
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It also estimates that the world would have lost between $4 and $20 trillion per year between the end of, actually, the last decade due to inaction.
00:20:25
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So we have already kind of measurement.
00:20:26
Speaker
But being said that, I mean, the monetary valuation of ecosystem services is incomplete.
00:20:32
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And we are part of...
00:20:36
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several working groups to actually address that because we need useful methodology and as Mike said, as Lizzie said, as Cecile said, I mean pragmatic ones.
00:20:50
Speaker
There's a lack of data to evaluate physical transition reputational risks.
00:20:56
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When I say physical...
00:20:58
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Transition Repetition Risk, I'm actually taking back the taxonomy of risks that has been used by the TCFD.
00:21:06
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And it leads me to the initiative with which we are putting a lot of hope, which is the TNFD.
00:21:13
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Building on what has been done, the kind of thinking that has been done with TCFD, work on nature related risk.
00:21:22
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We understand that there's an overlap clearly between climate and natural capital, but meanwhile, they cannot be assessed in the same way.
00:21:31
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I mean, we all know that with climate, we have kind of a single indicator, which is CO2 emissions.
00:21:38
Speaker
And with nature lots, it's an aggregation of many.
00:21:42
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It's going to be difficult.
00:21:43
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We can build an existing framework to actually help the economic and financial industries to address and embed them.
00:21:51
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But it's still, yes, work ahead of us.
00:21:54
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And the Task Force for Nature-Related Financial Disclosure, the TNFD, launched very recently.
00:22:00
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So that's one to watch about where they're going.
00:22:02
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So Leslie, there's a question here that's just come in related to that, just to see if we can build on it.
00:22:07
Speaker
So what data is actually going to be needed?
00:22:09
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What data are you collecting to help you in the decisions that you're making around biodiversity?
Biodiversity Data Challenges
00:22:15
Speaker
Yeah, so I think really the data that we need,
00:22:21
Speaker
There are multiple on that topic.
00:22:23
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I would say one of the fundamental ones, and I think Mike touched upon it, is whether the company has made a holistic assessment of its impacts, but also dependencies on nature.
00:22:36
Speaker
And that impact and dependencies assessment needs to be conducted really across the full value chain of the company.
00:22:44
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Because that assessment is really the backbone for companies to identify their hotspots,
00:22:50
Speaker
within the business model and prioritise and orientate accordingly the mitigation and restoration practices.
00:22:57
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And based on our assessment on companies, it is still really rare to see such holistic assessment across companies.
00:23:06
Speaker
And I think this is really explaining then why we're missing more practical targets from companies
00:23:14
Speaker
on the actual pressure on the key drivers that lead to biodiversity loss, such as the level of use of each natural resource, the level of reliance on specific commodities that are the one that leads the most to deforestation, what is the land use, what are used carbon emissions across the full value chain.
00:23:33
Speaker
And then I could carry on for another like a few minutes and probably hours on all the different metrics that we would need and some are sector specific.
00:23:45
Speaker
I think another metric that we collect, but where we face a lot of gap in terms of disclosure is around site level data.
00:23:58
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And this is particularly important for biodiversity because it's very much a locally specific issue.
00:24:06
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And what we're seeing is that that gap is huge even for
00:24:12
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companies that have biodiversity impact in their own operations, you know, through the direct assets.
00:24:17
Speaker
I'm thinking about the mining industry, the extractive industries.
00:24:20
Speaker
But if you think about that location gap for sectors such as food that have most of the biodiversity impact across the supply chain, the upstream,
00:24:32
Speaker
value chain, then the level of data is even more opaque.
00:24:37
Speaker
And this is very complex.
00:24:39
Speaker
So this is something where a lot of stakeholders need to work on.
00:24:45
Speaker
I think we need more disclosure from corporates, but we, as data providers and also on the scientific side, we all work to improve supply chain modeling and input and output data sets.
00:25:02
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And that goes to my other point that we need to complement this company-specific data, which is for the moment far from being exhaustive, with scientific and research literature that would bring to us life cycle assessment and input and output model that estimate the biodiversity footprint based on specific business activities and based on a specific location.
00:25:29
Speaker
And then maybe the last metric that we are looking but not really finding is also something that Mike mentioned, you know, the science-based target for nature.
00:25:44
Speaker
We believe that it's a metric that would really...
00:25:47
Speaker
help to hold companies accountable and to measure how companies are progressing and especially to see what trajectory they're taking and what's their end point and whether this is aligned with the policy framework and with scientific trajectory.
00:26:07
Speaker
Yeah and the Science Based Targets Network obviously working now with a lot of enterprises starting with water as the first one quite soon.
00:26:14
Speaker
Mike you wanted to come in.
00:26:16
Speaker
And very briefly on an excellent discussion about how business actually provides the metrics.
00:26:21
Speaker
So I'm seeing two interesting approaches emerge now.
00:26:24
Speaker
So businesses like Coca-Cola are starting to run a scorecard.
00:26:28
Speaker
So these are our 10 critical raw materials that we use.
00:26:31
Speaker
Each of them now are on a pathway to be individually more sustainable.
00:26:34
Speaker
So that's an interesting beginning, I think.
00:26:37
Speaker
The second thing I'm seeing from businesses like Mars and Curring that are starting to set a land-based footprint, just like a carbon footprint, but this is the totality of land in hectares that are required to sustain the raw material production for our business model.
00:26:50
Speaker
We either commit to hold it as we grow, that becomes no bigger, or we commit to reduce it through regenerative practices.
00:26:57
Speaker
For the early days, it's a small number of leading businesses exploring.
00:27:01
Speaker
But I think we need to be learning from the experience and practicalities of what these organisations are doing.
00:27:06
Speaker
The learning's out there.
00:27:08
Speaker
Yeah.
00:27:09
Speaker
And all of those companies you were just talking about are working very closely with us actually at the moment on doing that footprinting using capitals.
00:27:16
Speaker
Maureen, you wanted to jump in?
00:27:18
Speaker
Yes, just to add something is that we've talked about the complexity of assessing those risks and embedding it in our system, being it at corporate level or in the financial industry level.
00:27:33
Speaker
Being said that, I mean, it...
00:27:36
Speaker
This complexity shouldn't prevent us to actually start because there's an easy peak within our risks policies.
00:27:48
Speaker
I mean, we have been setting ourselves rules for a very long time since 2004.
00:27:54
Speaker
on the forest, then on agriculture, on water, on Ramsar, wetlands.
00:28:03
Speaker
And so to actually start with stopping financing activities, projects, companies that have, for which we can easily evidence the negative and sustainable impact they can have on nature.
00:28:23
Speaker
So Cecile, I wanted
Critiques & Limitations of Nature-Based Solutions
00:28:24
Speaker
to come back to you.
00:28:24
Speaker
So there's a question that some groups are advocating that using nature-based solutions is just a greenwashing tool.
00:28:32
Speaker
So what are the actual benefits?
00:28:33
Speaker
What are the actual real case benefits that you're starting to see coming through from this?
00:28:38
Speaker
I mean, is it a greenwashing tool?
00:28:39
Speaker
Are people just jumping on the bandwagon with this?
00:28:42
Speaker
yeah um like that's a really interesting question i mean yes so there there is a big worry around greenwashing at the moment and i think i can take this opportunity if i may to talk about uh some work we've been doing lately looking at the large-scale deployment of nature-based solutions and how they can help
00:29:03
Speaker
limit global warming, basically.
00:29:07
Speaker
So how much do nature-based solutions contribute to mitigating climate change?
00:29:11
Speaker
And this is where we need to provide a word of caution.
00:29:16
Speaker
There has been so much emphasis on the potential for nature-based solutions to help us offset our emissions and to tree planting in terms of mitigating climate change.
00:29:29
Speaker
So lately I've been working with a big group of scientists from across the world trying to address this question in terms of how much, in terms that are relevant to the Paris Agreement.
00:29:40
Speaker
So how much can nature-based solutions help us keep peak warming
00:29:46
Speaker
to well below 2 degrees this century, whilst pursuing the efforts to limit to 1.5 degrees C. So let's look at this in terms of degrees, was the question.
00:29:56
Speaker
And it's a complex question to address.
00:29:59
Speaker
There's a lot of work around it.
00:30:00
Speaker
There are many caveats, as you know, albedo, food security, fiber security, land tenure rights.
00:30:09
Speaker
the carbon saturation age of forest and etc but the general consensus that we find is that on land and there's still a big evidence gap as you know on oceans for evidence on oceans so we're focusing on land on land deploying nature-based solutions on a large scale could help us
00:30:30
Speaker
mitigate by about 10 gigatons CO2 per year annually.
00:30:35
Speaker
And that would be the equivalent of 11 gigatons CO2 equivalent if you're considering all the other greenhouse gases.
00:30:44
Speaker
So this is every year up to the end of the century.
00:30:47
Speaker
And this is where it's interesting because so half of it would come from avoided emission.
00:30:52
Speaker
It's important to understand the difference between what comes from avoiding emissions.
00:30:57
Speaker
So that's protection of ecosystems
00:31:00
Speaker
and better management of working lands and actually taking carbon out of the atmosphere, which is enhancing sinks and that's protecting, that's better management of working lands also, but also restoring ecosystems.
00:31:16
Speaker
So this big emphasis on tree planting.
00:31:19
Speaker
But interestingly, only two gigatons per year of that, two gigatons CO2 per year, comes from restoring ecosystems.
00:31:28
Speaker
So we need to put this into perspective.
00:31:30
Speaker
It's a small proportion compared to the 10 gigatons we're talking about when we're talking about protecting ecosystems
00:31:37
Speaker
better managing the lands that we're already using, so we don't need more land for that.
00:31:44
Speaker
And so it's slightly disproportionate to this huge focus on tree planting and carbon offsetting using nature-based solutions.
00:31:54
Speaker
The rest comes from protecting ecosystems, that's about four gigatons CO2 per year, and better management of working lands, again, about four gigatons CO2 per year.
00:32:03
Speaker
And this translates, so back to the question of how much we actually reduce global warming by implementing nature-based solutions at scale over the next few decades.
00:32:16
Speaker
It translates to avoiding warming by 0.3 degrees C by the time we reach a peak warming of 2 degrees C.
00:32:25
Speaker
warming in 2085.
00:32:27
Speaker
So that's in the IPCC scenarios.
00:32:29
Speaker
We took the IPCC scenarios and added nature-based solutions at scale to those.
00:32:36
Speaker
So it's a real benefit, but it's still limited.
00:32:39
Speaker
We need to understand that.
00:32:41
Speaker
And we also need to understand that the contribution is time sensitive.
00:32:45
Speaker
So one of the big, the crucial findings we found is that
00:32:51
Speaker
that nature-based solutions continue to act over time.
00:32:54
Speaker
So we need to invest now in nature-based solutions that have longevity because they have a powerful role in reducing temperatures up to the end of the century.
00:33:03
Speaker
And that's where we see real benefits, mitigation benefits at the end of our century during this cooling phase after we reach peak warming.
00:33:12
Speaker
But all this, of course, will only happen if we focus on decarbonizing our economy, if we do stay
00:33:18
Speaker
below 2 degrees.
00:33:19
Speaker
We have been warned again and again the difference between 1.5 and 2 degrees and it's crucial to understand that a nature-based solution cannot become an alternative to decarbonizing our economy, of course.
00:33:34
Speaker
And then the second part of this is that, as I said before, we do need to have these resilient ecosystems that are healthy,
00:33:40
Speaker
that have multiple ecosystem functions and that comes again to the metrics question we're always coming back to.
00:33:49
Speaker
Some argue that these metrics should be perhaps linked to ecosystem functions and it would make more sense to look at it in terms of functions rather than purely a number of species or that kind of thing.
00:34:03
Speaker
So ultimately, the main message that we caution against focusing on carbon as the main metric of monitoring these projects.
00:34:12
Speaker
And we need to look at ecosystem integrity, social equity and real climate benefits.
00:34:21
Speaker
Excellent.
00:34:22
Speaker
And there's lots of activities.
00:34:25
Speaker
I'm aware of over 19 different biodiversity metrics that have been developed over the last couple of years.
00:34:31
Speaker
So there's lots of people thinking about that.
00:34:33
Speaker
It feels like we've got several questions here about reshuffling subsidies, about priorities.
00:34:38
Speaker
Are we going fast enough urgency?
00:34:41
Speaker
Has the pandemic given us enough urgency here?
00:34:44
Speaker
So maybe to try and bring this around to some form of conclusion, we've got about four or five minutes left.
00:34:49
Speaker
Can each of you think about, so what is it that we really need to do now?
00:34:54
Speaker
If this is as urgent as we're saying, it's going to go on.
00:34:57
Speaker
If we invest in nature-based solutions, we're going to see those benefits coming back again and again and again.
00:35:02
Speaker
But what is it we need to do in this next five to six months period before the end of this year that is urgent?
00:35:08
Speaker
If we could have that magic wand to get one thing to occur, what is it that we need to happen?
Educating Investors & Integrating Nature Restoration
00:35:13
Speaker
Let's start with you, Leslie.
00:35:15
Speaker
What do you think is the most urgent activity that we need to do from your perspective?
00:35:20
Speaker
I think from ESG research providers perspective, our main role is to raise awareness among investors on what are the main activities, what are the main sectors that are causing biodiversity loss and really provide the most accurate, simple and comparable metrics on that.
00:35:43
Speaker
That is our key priorities.
00:35:47
Speaker
What we've been doing for years, what we've been quite good at is collecting and evaluating bottom-up company-specific data.
00:35:57
Speaker
And we do that in leveraging scientific and alternative third-party data sets to measure the specific biodiversity exposure of each issuers through their own operations or supply chain, or based on their specific business lines.
00:36:14
Speaker
then we analyze the medication practices implemented by companies to either avoid or reduce the biodiversity loss or even restore nature.
00:36:26
Speaker
So we have those company specific data, but I would say they are very sector specific because we would look at those issues for the industries that are the most at risk.
00:36:36
Speaker
Those metrics would be
00:36:38
Speaker
different depending on whether we look at own operations, biodiversity issues versus supply chain biodiversity issues.
00:36:46
Speaker
And what we're hearing from investors is that we need this kind of single and meaningful metrics on biodiversity that can be aggregated at portfolio index level.
00:36:55
Speaker
That's some of the demand that we're getting.
00:36:57
Speaker
So what we're trying to do in the short term is seeing how we can complement our assessment with some of the top down
00:37:06
Speaker
biodiversity footprint efforts that has been done by other institutions, companies, sometimes government-led, leveraging a lot of scientific and academic research, which is very much top-down and would be very complementary with our data set.
00:37:23
Speaker
And we think that looking at this collaboration, partnership and see
00:37:28
Speaker
how we can provide this superior biodiversity offering for clients to help them to better meet some of the regulatory framework that, or regulatory momentum that is happening is our key priority.
00:37:52
Speaker
Excellent.
00:37:53
Speaker
What about you, Marie?
00:37:54
Speaker
What do you want to see happen in the next five months?
00:37:57
Speaker
Well, actually, we didn't have the time to talk about sovereign debt, but I think given the fact that we are in the super year of nature with COP15 and COP26, what I would like to, what I would dream of to see now is actually to have protection and restoration of nature included.
00:38:17
Speaker
into NDCs, Nationally Determined Contribution.
00:38:22
Speaker
So to develop sovereign debt linked to those KPIs developed at scale.
00:38:31
Speaker
Very clear.
00:38:32
Speaker
Thank you.
00:38:32
Speaker
What about you, Cecile?
00:38:36
Speaker
I wholeheartedly agree with Lesley and Marine.
00:38:40
Speaker
The metrics, robust, simple metrics at the site level, I would add to that, that can be linked to remote sensing and to be deployed at the landscape level, really thinking about action at the landscape level as well as the site level.
00:38:57
Speaker
implementing more nature-based solutions in NDCs, definitely.
00:39:02
Speaker
And they're also focusing on the importance of implementing nature-based solutions in partnership with local communities, which ensures the continuity of these projects.
00:39:13
Speaker
So for that, I would like to see companies who rather than focus on offsetting their emissions, I would suggest working on insetting.
00:39:22
Speaker
And that's a concept that's been gaining traction
00:39:24
Speaker
lately, that's referring to investment by companies into projects along their supply chain where they have more influence on the projects, more long-term benefits came from it.
00:39:39
Speaker
And again, focusing on projects that are good for climate, biodiversity and people.
00:39:44
Speaker
And with these multiple goals, being able to make their own supply chains more resilient.
00:39:52
Speaker
Wonderful.
00:39:53
Speaker
And Mike?
00:39:54
Speaker
Round us off on this one.
Final Remarks & Future Outlook
00:39:55
Speaker
What's the thing that you want?
00:39:57
Speaker
Brilliant, brilliant points.
00:39:58
Speaker
And just to add three bullet points into the room.
00:40:01
Speaker
First, subsidies.
00:40:02
Speaker
We've seen with the discussion about the common agricultural policy all around the world today, governments are paying farmers to do the wrong thing.
00:40:08
Speaker
We need to pay them for doing the right thing.
00:40:10
Speaker
The second is this, making sure there's a clear pathway for business to get involved.
00:40:14
Speaker
Clear endpoints like net zero, science-based target equivalent, scope one, two, and three equivalent, race to zero equivalent.
00:40:21
Speaker
And the third and final thing, and we've mentioned already, is the power of the fourth industrial revolution.
00:40:26
Speaker
The food system is complex because we're selling trillions of items to billions of people produced by hundreds of millions of people.
00:40:32
Speaker
We can't track all that with the spreadsheet.
00:40:34
Speaker
Artificial intelligence, big data, remote sensing helps solve it.
00:40:38
Speaker
Let's get those three things right.
00:40:41
Speaker
Wonderful.
00:40:42
Speaker
So thank you very much, everyone.
00:40:43
Speaker
Thank you to the panel.
00:40:44
Speaker
Thanks, Mark.
00:40:46
Speaker
Welcome back.
00:40:46
Speaker
Yeah, I was very struck by the sudden focus on nature, as Maureen put it, quite recently and quite massively in terms of scale and speed.
00:40:56
Speaker
And Mike's saying most companies haven't got a clue about nature, given the enormity of the challenge.
00:41:02
Speaker
But as Leslie said,
00:41:04
Speaker
US clients are rather silent in this area at the moment.
00:41:09
Speaker
Certainly, there's a significant wish and a significant message there on a determination to make nature front of house in addition to climate and sustainability.
00:41:19
Speaker
It shows what we have to talk about is getting wider and broader almost by the day, almost by the week.
00:41:26
Speaker
So thank you very much indeed, Mark.
00:41:30
Speaker
This has been a special podcast in the business plan for the planet series.
00:41:33
Speaker
More episodes will follow shortly.
00:41:35
Speaker
So please do keep an eye out for those for more information on the program, visit business.hsbc.com forward slash sustainability.
00:41:51
Speaker
Thank you for listening today.
00:41:52
Speaker
This has been HSBC global viewpoint banking and markets.
00:41:57
Speaker
For more information about anything you heard in this podcast,
00:42:00
Speaker
or to learn about HSBC's global services and offerings, please visit gbm.hsbc.com.