Hosted by NatWest’s German office, subject matter specialists from consultancy, the investment community, corporates, and FIs discussed the latest developments in two major converging topics, Climate and Biodiversity, and their impact on sovereigns, municipalities, corporates, and financial institutions.

Johannes Boehm from Union Invest, Cornelia Neumann from Oliver Wyman, Christian Hardt from NRW Bank, and Shari Smousavi from CMS contributed to a thought-provoking discussion in Düsseldorf, which 15 guests attended. 

Take-aways from the roundtable and Cornelia Neumann’s keynote presentation included:

• Investors are keen to allocate their money to nature and biodiversity projects, however, distinguishing “good” from “bad” projects is a complex task, in part due to the breadth of what falls within the definition of biodiversity. To address this, investors - and issuers - would welcome clearer guidance on how to properly identify the “right” investment opportunities, offering nature-positive results. While The Taskforce on Nature-related Financial Disclosures (TNFD) guidelines, released this year, are a very good start for nature-related reporting, it will still take time for ‘nature & biodiversity’ considerations to be integrated into decision making and disclosures. Positive change will be accelerated by the EU, which is putting in place the most ambitious sustainability legislative agenda in the world, including a focus on nature; i.e. the European Sustainability Reporting Standards (ESRS) which represent a granular taxonomy for nature.
• Many investors, companies, and organisations are in the process of setting out their net-zero journey and wider ESG strategy. Now, additional resources are needed to specifically address and incorporate ‘nature and biodiversity’ challenges and projects in the wider ESG strategies - and to engage with the entire supply chain on urgent ‘nature & biodiversity’ challenges.
• Some issuers have already kicked off nature positive initiatives, yielding impressive results. These need to urgently be amplified - for example through case studies - to inspire and guide others to launch similar projects.
• Commitments such as the ‘30x30’, a worldwide initiative for governments to conserve 30% of terrestrial and marine habitats by 2030, do provide incentives and simple metrics to align global efforts. Frameworks such as the TNFD and the SBTN are playing a key role, too.
• Finding an efficient and tangible way to measure the impact and economic value of ‘nature & biodiversity’ is one of the biggest bottlenecks. Biodiversity credits could be a way to support the quantification of the impact. However, with many questions around pricing dynamics and liquidity for such credits yet unanswered, the product is still in its infancy.
• Biodiversity affects everyone and everything, with half of the European GDP dependent on nature services - and at risk from deteriorating ecosystems. Finally, companies are taking first steps by 1) understanding the materiality of ‘nature & biodiversity’ for their business; 2) considering the underlying risks; 3) setting initial strategic drivers; and 4) reporting on nature.
• Land use is the biggest driver of biodiversity loss. Consequently, the EU’s Corporate Sustainability Reporting Directive is a crucial development as companies in the EU are obliged from 2025 onwards (for reporting on 2024) to disclose deforestation impacts and mitigation plans.
• The transition to nature positivity is expected to create investments of $7.5 trillion.
• The good news: many of the concepts and capabilities established for climate can be leveraged and broadened to biodiversity and natural capital - which is also considered the next focus area for regulators, investors, and wider stakeholders.

Questions?

If you have questions about ‘nature & biodiversity’, and how it affects your company or organisation, please reach out to:

Caroline Haas - Global Head of Climate and ESG Capital Markets

Michael Strafuss - Head of Sales EEA and Country Head NatWest Markets N.V.

Merijn Nederveen - Head of Corporate Coverage and Debt & Financing Solutions for Germany, Austria & Switzerland