Agefi Luxembourg - décembre 2024

Décembre 2024 25 AGEFI Luxembourg Fonds d’investissement B iodiversity is the corners- tone of life on Earth, nur- turing ecosystems that are vital for environmental resi- lience and economic well-being. Yet, the rapid decline in species, genetic diversity, and ecological richness threatens to destabilize these essential systems. This pressing challenge highlights the need for urgent action to protect and restore biodiver- sity—a mission with profound benefits for both the planet and the global economy. The Three Pillars of Biodiversity: Species, Genetic, and EcosystemDiversity Biodiversity the variety of life at three interconnected levels: species diver- sity, genetic diversity, and ecosystem diversity. Each level plays a vital role in maintaining the balance and re- silience of the biosphere. 1. Species Diversity: This includes the variety of species within a habitat or a region. It encompasses the num- ber of different species and the bal- ance of species populations in an ecosystem. High species diversity often indicates a healthy ecosystem because it fosters stability and re- silience against disturbances. 2. Genetic Diversity: Refers to the variety of genetic information within and between populations of species. This diversity in genes allows species to adapt to changing environments, resist diseases, and maintain healthy populations. Genetic diversity is es- sential for a species’ survival and re- silience. 3. Ecosystem Diversity: Refers to the variety of ecosystems within a partic- ular area or on Earth as a whole. Dif- ferent ecosystems—like forests, deserts, wetlands, grasslands, and oceans—support different communi- ties of species and contribute to over- all environmental health. Ecosystem diversity is crucial for ecosystem ser- vices, such as climate regulation, nu- trient cycling, and water purification. The Biodiversity Crisis Biodiversity is closely linked to the concept of ecosystem services, that support life on Earth. High biodiver- sity levels increase ecosystem re- silience and productivity, which in turn provide humans with vital re- sources such as food, medicine, and clean water. However, the ongoing biodiversity crisis threatens these es- sential services and nature contribu- tions to populations. This crisis is alarming considering that an estimated one million species of plants and animals are at risk of extinction (1) . Since the 1700s, 85% of the world’s wetlands have disap- peared (2) , while 75% of the Earth’s surface has been significantly altered by human activities. Additionally, 50% of coral reefs have been lost since the 1870s (3) . One major concept is the notion of “Planetary Boundaries,” which de- fines nine critical thresholds for the Earth’s systems. Six of these bound- aries, including two related to biodi- versity, have already been crossed (4) . The main drivers of biodiversity loss include land and sea use change, over exploitation of natural resources, cli- mate change, pollution, and the spread of invasive species (5) . The Economic Dependence on Biodiversity More than half of the world’s GDP, approximately USD 44 trillion, is di- rectly tied to nature and its services (6) . Sectors such as agriculture, forestry, and fisheries are directly reliant on healthy ecosystems. For instance, pol- linators like bees are crucial for food production, contributing between USD 235 and USD 577 billion annu- ally to global food production (7) . The decline in pollinators can lead to crop failures, food insecurity, and eco- nomic losses. To address these risks, some frameworks like the Taskforce on Nature-related Financial Disclo- sures (TNFD) are emerging. The TNFD provides businesses and finan- cial institutions with standardized methods to assess and disclose their dependencies and impacts on nature. Alongside tools like ENCORE, the TNFD aims to help organizations make informed decisions, promoting the protection and restoration of bio- diversity as part of their operations (8) . The Biodiversity Finance Solutions – opportunities and challenges Biodiversity finance, though still in its early stages, holds significant poten- tial to fund biodiversity conservation, addressing these boundaries, and steering economies towards nature- positive pathways. At national level for example, Conservation Trust Funds (CTFs) are used in over 60 countries to finance biodiversity con- servation and protected areas man- agement (among other domestic financial instruments). International funding mechanisms al- ready exist such as the Global Envi- ronment Facility (GEF) which recently reinforced its instruments for biodi- versity financing with the Global Bio- diversity Framework Fund (GBFF) (9) . Other funding sources have been re- cently developed and were an- nounced at the 2024 United Nations Biodiversity Conference of the Parties (COP16) to the UN Con- vention on Biological Diversity (CBD), including: - The Nature Investment Facility - The Kunming Biodiversity Fund COP 16 decisions also pointed out the importance of developing revenues from digital sequence information (DSI) (10) , a very promising avenue to significantly increase resources avail- able for biodiversity conservation. Critical developments are also emerg- ing on impact investing for biodiver- sity with more and more asset managers developing impact strategies for biodiversity positive outcomes. To ensure that conservation efforts have a genuine impact, it is essential to guard against greenwashing – when companies or projects falsely claim environmental benefits. Mea- sures, such as spot checks, inspec- tions, and independent audits are critical for verifying the authenticity of biodiversity protection efforts. Innovative startups are emerging to monitor biodiversity and ecosystem services, providing valuable data and insights through satellite technol- ogy (11) . The Convention on Biological Diversity (CBD) The CBD has three fundamental objec- tives: conserving biological diversity, sustainable use of its components, and fair and equitable sharing of benefits from genetic resources. Despite the alarming situation, there is hope if appropriate measures are taken to preserve biodiversity (12) . This is the overall objective of the Kun- ming-Montreal Global Biodiversity Framework. In Luxembourg, the CBD objectives are implemented following the “Plan National Concernant la Protection de la Nature” (PNPN) that outlines the country’s strategy for protecting na- ture and biodiversity (13) . Insights from Experts At the LuxFLAG Biodiversity Break- fast Seminar on July 3, 2024, two key speakers, Ludwig Liagre, Managing Director at Rio Impact, and Dr. Oliver Heiland, Managing Director at Finance in Motion Asset Manage- ment Luxembourg, provided valu- able insights into the challenges and opportunities on biodiversity and its conservation. Ludwig Liagre emphasized the im- portance of genetic, species, and ecosystem diversity. He highlighted that 75% of terrestrial biodiversity re- sides in forests, and that climate change significantly impacts biodi- versity, requiring adaptation strate- gies, including through nature-based solutions. He also pointed out the critical role that Conservation Trust Funds (CTFs) play in financing pro- tected areas and mobilizing capital for long-term conservation efforts, among a wide range of possible bio- diversity finance solutions. Ludwig also mentioned the impor- tance of scientific metrics, reporting methodologies and organizations in- novating for the monitoring of biodi- versity impacts, creating the conditions for the emergence of na- ture-positive investments. Dr. Oliver Heiland discussed the con- cept of Planetary Boundaries, noting that out of nine boundaries, six have already been transgressed. He stressed the economic challenge of measuring biodiversity’s financial value, noting that 55% of the global economy depends on biodiversity systems. Dr. Heiland highlighted the EU’s tar- get to conserve 30% of natural lands by 2030 and the critical role of polli- nators in food security. He also dis- cussed biodiversity credits as tradable instruments, and the promi- nence of funds dedicated to biodiver- sity protection. Looking forward – Conservation Goals and Strategies The EU has set ambitious biodiversity targets for 2030, including to conserve 30% of natural lands (14) . Achieving this goal will require both, financial in- vestment and effective conservation strategies. By aligning national and international biodiversity and development strate- gies and fostering biodiversity financ- ing solutions at scale significant progress can be made in halting bio- diversity loss, while fostering nature- positive economies Conclusion Biodiversity is essential to life on Earth, underpinning the ecosystems that provide critical services to both the environment and the global econ- omy. The ongoing biodiversity crisis calls for urgent action, robust conser- vation strategies, and a significant raise in the ambition of biodiversity fi- nance mechanisms. Only by understanding and valuing biodiversity and related ecosystem services, we can create a sustainable future for all life on our planet. Oliver HEILAND, Managing Director at Finance in Motion Asset Management Sarl Ludwig LIAGRE, Managing Director at Rio Impact Isabelle DELAS, Chief Executive Officer, LuxFLAG Nairi TARAKDJIAN, Business Development & Marketing Associate, LuxFLAG 1) UnitedNations Environment Programme. (2020). Bio- diversity: The Foundation of Life . Retrieved from https://lc.cx/nGLL6I. 2) UnitedNations Environment Programme. (2020). Bio- diversity: The Foundation of Life . Retrieved from https://lc.cx/nGLL6I. 3)ConventiononBiologicalDiversity.(2020). Introductionto the Global Biodiversity Framework . Retrieved from https://www.cbd.int/gbf/introduction. 4) Potsdam Institute for Climate Impact Research (PIK), “PlanetaryBoundaries, ”https://lc.cx/Lld6Ud. 5)WorldEconomicForum.(2023). Whynatureandbiodiver- sitylossisasurgentasclimatechange–andwhatwecandoabout it .Retrieve dfromhttps://lc.cx/0fp_KG. 6) WWF Statement on WEF’s NewNature Economy Re- port.(2020).WWF .https://lc.cx/XLotzN. 7) The Global Value of Nature. (n.d.). Nature4Climate. https://lc.cx/CNvWIB. 8) ENCORE. “Exploring Natural Capital Opportunities, Risks, and Exposure.” Accessed November 15, 2024. https://www.encorenature.org/en. 9) Potsdam Institute for Climate Impact Research (PIK), “PlanetaryBoundaries, ”https://lc.cx/BWzu-j. 10) International Institute for Sustainable Development, COP 16Will Hinge onWho Benefits fromNature’s DNA , Oc- tober8,2024 ,https://lc.cx/viehdp. 11)ConventiononBiologicalDiversity,“GlobalBiodiversity Framework, ”https://www.cbd.int/gbf/introduction. 12) United Nations Environment Programme (UNEP). “Fact Sheet: Convention on Biological Diversity.” https://lc.cx/ewK-OC. 13) Ministère de l’Environnement, du Climat et du Déve- loppement durable, Le Plan national concernant la protection de lanature(PNPN) ,https://lc.cx/r9veu8 14)EuropeanCommission.“BiodiversityStrategyfor2030.” Publications Office of the European Union, 2022. https://lc.cx/oRVX8x The Crucial Role of Biodiversity in Sustaining Life and Economies 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