Finance for Nature in Nature – Scottish Forum events at COP26

15th December 2021

40063286443_95ca35d43e_b


Introduction 

CoP 26 was an exciting and busy period for the Scottish Forum, with a series of events in partnership with Global Ethical Finance Initiative (GEFI) entitled 'Finance for Nature in Nature'. The Scottish Forum was a core partner with GEFI alongside the Scottish Government, UN Development Programme, Global Canopy and Nature4Climate. We contributed a number of nature-focused events over two days from the 4-5th of November at Ross Priory, Loch Lomond for CoP26 VIP delegates and Coalition partners. One of our working groups, the Conservation Finance Pioneers, (specifically the Leadership Group within, consisting of Scottish Wildlife Trust, SEPA, SRUC, NatureScot, and Scottish Forestry) played a key role in developing and delivering a programme itinerary, in consultation with our wider Basecamp network.

The two days featured keynotes, presentations, and panel discussions by government ministers,  the UN, financial institutions, as well as high level representatives from environment agencies, and international NGOs. The prominence of business and financial leaders at the GEFI events, but also throughout the wider CoP,  underlined the fact that nature conversation has moved far beyond it’s traditional base of eNGOs, scientists and policy makers. 

The Dasgupta review, a seminal report on the Economics of Biodiversity published earlier this year, argued persuasively that the economy and society are both ultimately embedded within nature. This was borne out by research by the World Economic Forum, estimating that $44 trillion of economic value generation – more than half of the world’s total GDP – is moderately or highly dependent on nature and its services.  The satellite events at Loch Lomond therefore reflected an urgent need to scale up investment in nature in order not only to tackle the climate and nature emergencies, but also economic and societal issues, and to meet the UN Sustainable Development Goals. 


Keynotes and panel discussions

The opening keynote speech on the first day came from Scottish Government Cabinet Secretary for Finance and the Economy, Kate Forbes. Ms Forbes focused on the need to attract greater investment into nature in Scotland, whist also being mindful of the need for a "Just Transition". It was highly encouraging to hear ambition for "a values led, just transition to natural capital markets...now a lens for Scottish Government’s policy making and programmes."

Complementary to the ethical underpinnings implicit within a Just Transition, Usha Rao-Monari (Under-Secretary-General and Associate Administrator of the United Nations Development Programme) argued that the concerns of young and indigenous communities must be provided with a suitable platform, and not ignored among the voices at CoP. This was particularly important given many indigenous communities are likely to be on the front-line of climate change impacts around the world. 

Having heard some of the ‘bigger picture’ policy vision from government at both national and supranational levels, discussion moved to frameworks that could better bind business and finance to nature and climate related commitments.  A high-level Taskforce on Nature-related Financial Disclosures (TNFD) panel discussed issues around risk assessments, and impact measurements within an emerging disclosure framework for natural capital markets. The aim is to facilitate reporting on the risks in relation to natural capital investment, essential to allow greater alignment between markets, net zero targets and a nature-positive world. There was recognition that a new financial architecture and language was needed around financial disclosures to ensure natural assets are viewed genuinely as assets, rather than liabilities, constraints or externalities.


The Route Map to £1 Billion - hackathons

Over the two days we also heard about some of the “pillars” which formed part of the ‘Route Map to £1 Billion’ project published in May 2020, by the Scottish Wildlife Trust and SEPA. This included sessions on Landscape Enterprise Networks (LENs), and ‘hackathons’ on Vacant and Derelict Land, and Riverwoods. To focus on one of these, the workshop for the Riverwoods project sought to apply the OECD's Five Principles for Financing Nature Investment to progressing the project, which will utilise a blended finance approach.

Much of the discussion centred around risk, - the need to take risk, risk management,  and risk allocation. In terms of managing risk, it was agreed there was an excellent opportunity for land managers to diversify business and sources of income in the future. The importance of identifying key beneficiaries with natural capital dependencies, and among those, beneficiaries with a willingness to pay a certain amount over an agreed time period, could provide a model that would allow investors to be repaid. This approach could be used to balance out risk, as well as helping to identify other areas where private finance investment was not viable, and more traditional funding such as grants or philanthropy would be required.


Related media - catch-up again!

There was a huge amount on over the two days, and we would be surprised if anyone managed to sit through two full days of content! Happily there are a number of options for those wishing to catch-up, or just dip a toe into some of the nature finance themed events.

You can view video all of the events from our two day programme: 

'Finance for Nature' - Positive Future for People and the Planet - Day 1

'Finance for Nature' -  Positive Future for People and the Planet - Day 2

An animated video was created by Nathalie Kwok, which tells the story of the Conservation Finance Pioneers journey over the last year - 'The Scottish Conservation Finance Pioneers Group - The journey so far' 

Immediately prior to COP 26, a podcast was produced by Hannah Rudman from SRUC on Scotland's £1bn Challenge for Natural Capital. The podcast finds out more about the 3 projects featured in our "hackathon" events during CoP, including Landscape Enterprise Network in SW Scotland, Riverwoods, and Vacant and Derelict land projects.

Lastly, membership of the Conservation Finance Pioneers is open to anyone who has an interest in conservation finance in Scotland. You can join here