COP16 debrief: Navigating the gap between ambition and action on nature.

The recent UN Biodiversity Conference (COP16) yielded a mixed bag of outcomes.

While headlines focused on the lack of consensus on funding and implementation, the event surfaced key takeaways signalling a potential turning point in global action for nature.

Conference key takeaways:

1. Bridging the funding gap: Despite a record-high interest in nature, COP16 revealed a stark disconnect between ambition and action. National budgets and action plans continue to lag, highlighting the urgent need to translate commitments into tangible progress.
2. TNFD adoption on the rise: Encouragingly, more companies are moving beyond pledges and adopting frameworks like the Taskforce on Nature-related Financial Disclosures (TNFD) to integrate nature-positive strategies, particularly in risk and opportunity management. Over 500 organisations, representing $17.7 trillion in assets, are now committed to TNFD-aligned reporting. As a TNFD Forum member, Deloitte demonstrates its commitment to contributing to the framework's development and actively assists clients in navigating nature-related risks and opportunities, aligning with the TNFD's goals. It's encouraging to see such strong adoption rates. At this pace, nature-related reporting could soon be on par with climate reporting in the next 3-5 years. The likely integration of TNFD into International Sustainability Standards Board (ISSB) S3 will also be a significant driving force. This signifies a growing recognition of nature's critical role in business resilience and sustainable growth.
   
   Find out how the TNFD recommendations and guidance support the EU’s Corporate Sustainability Reporting Directive (CSRD) and accompanying European Sustainability Reporting Standards (ESRS) or the anticipated new disclosure laws aligned with the International Sustainability Standards Board’s (ISSB) IFRS Sustainability Disclosure Standards (SDS) here.
3. Technology as a game changer: Technological advancements, including satellite imaging and AI, are revolutionising how we measure real-world biodiversity impacts, providing companies with more accurate data to inform decision-making.
4. Interconnected challenges: COP16 underscored the inseparable link between water and forest conservation, emphasising the importance of integrated solutions and recognising the invaluable role of indigenous knowledge in this domain.
5. Funding the future: While blended finance models are gaining traction, redirecting harmful subsidies towards nature-positive projects remains a critical challenge in bridging the estimated US$700 billion annual funding gap for biodiversity. One innovative financing instrument is investing in nature-based solutions for carbon and biodiversity credits or offsets. Nature-based solutions absorb carbon from the atmosphere and have a host of nature and biodiversity benefits. Some examples of nature-based solutions are forests, peatlands, mangroves and seagrass. Through a carbon offsetting scheme, human and financial capital can be deployed to restore these important ecosystems which absorb carbon. People and businesses can offset the carbon emissions that they are unable to abate and help. Ecosystems that are in free fall get restored. It’s a win-win!
6. Nature-based solutions are well positioned to generate co-benefits of biodiversity credits or offsets, many are in the early stages of development. The International Advisory Panel on Biodiversity Credits Framework for high integrity biodiversity credit markets recently launched on 28 October at COP16 in Cali, Colombia. This framework defines, guides and encourages the development of high integrity biodiversity credits and credit markets.

COP16 may not have delivered all the desired outcomes, but it illuminated a path forward.

The momentum around corporate action, tech-enabled solutions, and a growing recognition of interconnected challenges offers hope that we can bridge the gap between ambition and action for a nature-positive future.

Contact Dominic Wall for more information drwall@deloitte.co.uk