A Sustainable Future: Why Biodiversity Is a Financial Risk

Elizabeth Mrema, United Nations Assistant Secretary-General and Executive Secretary of the Convention on Biological Diversity (CBD), discusses COP-15 and the new biodiversity framework.

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It is well established that climate change poses significant risks to businesses and future investments but these concerns are often intricately connected to biodiversity and nature-related issues. Elizabeth Mrema, Executive Secretary of the United Nations Convention on Biological Diversity, and co-chair of the Taskforce on Nature-related Financial Disclosures joins the podcast to discuss how firms can report and act on evolving nature-related risks.

In this far-reaching conversation, Elizabeth Mrema and Jason Mitchell, co-Head of Responsible Investment at Man Group, talk about the upcoming UN Biodiversity Conference COP-15, the legacy of the 2010 governmental Aichi Biodiversity Targets and what the new expectations may be for a post-pandemic global biodiversity framework.

Recording date: 05 August 2021

Elizabeth Mrema, UN Convention on Biological Diversity, on Why Biodiversity Loss is a Business Risk.

Elizabeth Maruma Mrema is United Nations Assistant Secretary-General and Executive Secretary of the Convention on Biological Diversity (CBD), a multilateral treaty addressing the loss of biodiversity and climate change, and co-chair of the Taskforce on Nature-related Financial Disclosures (TNFD).

Elizabeth has two decades of experience working in the development and environment sectors. She is biodiversity leader and lawyer, from Tanzania, with a track record of negotiating next-generation policies and enabling instruments for planet, people, and prosperity. Elizabeth’s work as Deputy Director of the Ecosystems Division at the UN Environment Programme (UNEP) focused on the development, implementation, and enforcement of environmental laws both at the national, regional, and international level.

Her previous work includes being the Executive Secretary of the UNEP/Secretariat of the Convention on the Conservation of Migratory Species of Wild Animals (CMS) in which she oversaw the conservation of migratory animals globally.

Episode Transcript

Note: This transcription was generated using a combination of speech recognition software and human transcribers and may contain errors. As a part of this process, this transcript has also been edited for clarity.

Jason Mitchell:

Welcome to the podcast, Executive Secretary Elizabeth Mrema. It's great to have you here, and thanks so much for taking the time today.

Elizabeth Mrema:

Thank you. Thank you very much.

Jason Mitchell:

I appreciate it. So, Elizabeth, we have a lot of great stuff to talk about. I'd like to start out doing some scene setting. It seems like a reflection of the 2010 Aichi Convention is, in some ways the natural starting point for our discussion, given the lessons on how to structure new biodiversity targets in the upcoming, UN Biodiversity Conference or COP-15 that's planned to be held in Kunming, China this October. So how is the fact that no nation met the 20 original Aichi Biodiversity Targets from 2010, shaped negotiations and expectations around new commitments and targets going this year into COP-15?

Elizabeth Mrema:

Thank you. Thank you very much for the question I just want to add, which is very important, but I would like to make a bit of correction. You see, at times when we say none of the 20 Aichi Targets were met, I'm sure governments might be disappointed. Because there are some targets not fully achieved or fully met, but a lot of progress had been made to about six of them, without which the situation would have been even more terrible than where we are today. So I think we need to give credit to where a little progress has been made, and if that is scaled up in the future we might be in a better position.

Elizabeth Mrema:

Nonetheless, yes. None of the targets was fully met, although as we speak now, one target is about to be reached or already reached and this is Target 11 on protected areas. 17% of the terrestrial land has been reached with a few decimal points remaining for the 10% required for the marine environment. So why we fail to achieve all the 20 targets fully as expected a decade ago? There are several reasons, and I will try just to highlight some key ones. One, there was an expectation I think, that the responsibility for the implementation or reaching out the Aichi Biodiversity Targets, squarely laid on governments.

Elizabeth Mrema:

While we know very well, biodiversity affects every aspect of the society and everybody, and therefore it needed everybody, all stakeholders to be part and parcel for its implementation. But the problem that could not have been part and parcel of its implementation because not all of them were engaged in its development. So it did not engage all stakeholders in its development, and that paid off negatively when it came to implementation. Even at government level, with that expectation that was the responsibility of the government. And because the Aichi Biodiversity Targets, most of our focal points are ministries or departments of environment.

Elizabeth Mrema:

Again, a national level there was that lack of whole of government, whole of society, integrated mainstreamed approach for its implementation, and it became then the responsibility of ministries of environment and not all government departments. We know very well for many countries to-date, ministries of environment at national level, for a number of countries are "The weak," ministries comparing to other ministries, which are considered more of a priority at national level finance, planning, agriculture, fisheries, and water view.

Elizabeth Mrema:

While environment brings all of them together and a whole society, whole of government approach. Also the Aichi Targets were adopted without a review monitoring mechanisms. So over the period, we are not able to assess progress of its implementation and be able to adjust as we went along. And then furthermore, the Aichi Biodiversity Targets were expected to be implemented for 10 years, 2011 to 2020. Many countries took a step back, began developing National Biodiversity Action Plan and Strategies. And it's a consultative process, rightly so, but that process took three or four years before it was completed.

Elizabeth Mrema:

So actually for many countries, the actual implementation began after three or four years. So practically, the decade ended up being half way decade, and therefore probably the six partly achieved targets could have been fully achieved, who knows if that time lag had not been lost. And then of course issues of clarity, understanding the targets was also an issue. As negotiators and when we look at biodiversity issues, actually those mostly affected are people on the ground and these are the ones that need the scientific documents to be translated into simpler language, which they can understand.

Elizabeth Mrema:

And in many cases, probably even to their local languages. So, that kind of clarity also had an impact in the status of implementation. And then of course, major aspect of it was lack of financial resources, matches Aichi Target I think 19, had expected international financial flows to double, much as international financial flows increased tremendously, but was not adequate to support fully implementation of the Aichi Biodiversity Targets. So there was that lack of financial resources, which then compromised the achievement.

Elizabeth Mrema:

Inadequate political will also could have been another factor into the equation, and all of this put together resulted into the state of affairs we found ourselves 2020, the end of the Aichi Biodiversity Target ended. What have we learned from that, especially as we are now in the current process for the development of the new post 2020 global biodiversity framework? So that we don't repeat the mistakes of the past, but at the same time, we take the positive lessons from that and build into the new framework which is being led by the two co-chairs from Canada and Uganda.

Elizabeth Mrema:

So one, the development now of the new framework is ensuring an effective, participative, consultative process with literary, all stakeholders. In particular, indigenous peoples, local communities, the youth, the women, the private sector, and when I talk private sector, I mean the banks, the insurance, the industry, the business. And through this engagement, we have seen for instance, particularly with the private sector, where we initiatives now like business for nature, finance for nature, and a whole lot of work currently going on under the world economic forum linking nature, finance and economics.

Elizabeth Mrema:

Again, this came is the result of that. Furthermore, when the party set up the process for the development of the framework, they categorically asked for a simpler, smart targets of the framework. And what did they mean by smart? The targets have to be specific, measurable, achievable, realistic, and time-bound, so is to be able to pave the way to a more comprehensive and successful, hopefully this year framework. The first draft of the framework has already been issued since 12th of July. It will be now negotiated between 23rd August to September 3rd this year.

Elizabeth Mrema:

And the framework again, will be accompanied with a glossary, with an indicator plus a component of means of implementation. And under the means of implementation, we'll have resource mobilization strategic, capacity building technology, framework component, review and monitoring mechanism. And we hope with the new framework when it is adopted, there will be no, again, delay of three, four years as we did for the Aichi Targets, because all our parties now have the National Biodiversity Strategy and Action Plans already in place.

Elizabeth Mrema:

And because the framework is building on the Aichi Biodiversity Targets, so there are tools to begin implementation and if update will be needed, we'll then be done in tandem as opposed to taking a pause and do the update first. So if that happens, then we will have a full decade, which is now already less by two years or a year, but I hope the party governments will be able to catch up.

Jason Mitchell:

So, it sounds actually quite positive. It sounds like your efforts are explicitly correcting some of those problems from Aichi 2010. I'm wondering, to what degree can you help us out in understanding the tone of some of the pre-negotiation technical committees going into COP-15 over the last couple of months? And more specifically, how are you balancing a more pragmatic agreement that reflects the disappointment and learnings of Aichi with calls by let's say the CBD Alliance for a much more ambitious action plan?

Elizabeth Mrema:

You see all stakeholders have agreed, including governments have agreed that the framework need to be innovative, transformative, ambitious, and all sorts of buzzwords. The question is, what is ambitious? What do we mean when we say ambitious? And if it's ambitious, is up what limit or what measurement? And I think this is where probably one who will say is a gray word or language that creates that disappointment of Aichi made by the parties and stakeholders. But that disappointment actually makes both the parties and stakeholders probably more committed to really develop a new set of targets and a more ambitious action plan.

Elizabeth Mrema:

Of course, CBD Alliance are saying the current draft is not ambitious, but remember the draft has tried to include into it all the views which had been compiled from all stakeholders. It's a formidable task, and I don't think it's easy to really please one stakeholder and not offending the other. So that balancing act we need to realize, one. Two, the negotiations now are about to begin end of this month. We will see how the negotiations go, maybe they will further increase the ambition expected. So I think we need to give that a chance and we hope that the ambition could be increased to the level that CBD Alliance is looking for.

Elizabeth Mrema:

But if I go to the technical committees which we have referred, the tone was actually definitely one of cooperation among the parties. And then of course, they were able to lay the path to a participative process, in this process of development of the framework. And of course the process which was adopted by the parties to develop the framework, also has set out a set of principles to guide not just the development, but also in future its implementation. And it cannot get the implementation if the development does not take into account these principle. And those principles are participatory, inclusiveness, gender responsiveness, transformative, comprehensive, catalytic, visible, knowledge, scientifically-based, transparent, efficient, results oriented, interactive, flexible. So you see all those words are the principles guiding the framework.

Jason Mitchell:

I see. Considering the COP-15 has been postponed twice because of COVID-19. How would you say the pandemic has influenced and shaped the policy agenda around biodiversity over the last year and a half? And it's actually worth asking because we've started to see some talk about a third delay to COP-15, the conference into next year. How likely do you think that is?

Elizabeth Mrema:

True. The pandemic has resulted into the postponement of the conference of the parties twice. We are looking at meeting in October, but well the pandemic situation has been unfortunate. And we're really in solidarity with all countries globally for the loss of the people, for people getting sick, for the impacts on their social economic development as fear, but for our process in rated comments, it has given us an opportunity in terms of more time to develop the framework, more time to prepare for the conference of the parties.

Elizabeth Mrema:

Because I don't think, I tend to be corrected, if we had the COP last year in May, probably the first draft framework we have today, will not have been in the content we are seeing because it would have been rushed in its development. We will not have had such a wide consultative process as we have had in the last two years plus. So, all these time has given us that opportunity and this fact of working from home, it has even made it easier and cheaper to reach out to different stakeholders. Cheaper in terms of, people did not need to travel, needed to ensure they have good connectivity. It has been a challenge for a number of countries, but at least we've been able to reach out.

Elizabeth Mrema:

The co-chairs have been able to reach out to many stakeholders and get them engaged in this process. So that has been a major plus for our purposes. The other major plus is the better understanding, now globally. I stand to be corrected, that people know probably are more aware of the impact of biodiversity loss in the society and the impacts of human activities on nature causing biodiversity loss, causing climate change, causing the degradation, impacting on our health better than probably any other time in the history. That again has enabled to propel the focus on the content of the global biodiversity framework. What that means for the next COP, our technical committee meetings, we call them Subsidiary Bodies of Science and Implementation, which met in May and June for six weeks, virtually.

Elizabeth Mrema:

These meetings were to contribute to the COP-15, as well as contribute elements for the post 2020 framework. The parties agreed to postpone those meetings as opposed to closing them until when they are able to meet face to face. So if they're able to meet face to face, then it means that's when they will finalize those contributions and negotiations needed into the post 2020 and the framework. Likewise, the working group which will meet at the end of August, on that 3rd September, it will also suspend its meeting until when negotiators are able to meet face to face.

Jason Mitchell:

I see.

Elizabeth Mrema:

Currently, again keeping the situation under strict review, particularly now when it comes to not just the pandemic, but also the status of vaccination, particularly for many countries, which are not as privileged as well as some of us are, so their vaccination status. Then we are looking at having the face to face probably in January.

Jason Mitchell:

I see. I see. Let me ask you one final point around the negotiations. One of the traditional points of tension between developed and developing economies during the climate COPs was always the socioeconomic development. In fact, I remember when I was in COP-15 in Copenhagen in 2009, when this dialogue infamously broke down. To what degree has the biodiversity conventions article 20 specifically, which relates to financial resources and obligations of developed and developing countries diffuse this? I guess I'm wondering, to what degree is biodiversity in a way being used as a bargaining chip during these negotiations? How do you find the right balance between national biodiversity commitments and socioeconomic growth?

Elizabeth Mrema:

As we move through the negotiations, we will have a better picture. But for now, we are looking at one hand, the sustainable use of biodiversity being supported by enabling conditions, such as sustainable social economic development, and adequate means of implementation, which I'd mentioned earlier, issues of financial resources, capacities, and technology. And then of course, such aspects are one pillar of the fear of change underlining also the draft framework. And of course, these are those I mentioned the components of the framework, which in other words, the framework will be adopted with the means of implementation.

Elizabeth Mrema:

And the means of implementation without financial resources, there can be no implementation. Without enhancing the capacity, transpiring appropriate technology, then there will be weakness in the implementation. Developing a holistic resource mobilization strategy to mobilize resources from all sources was noted as among the key issues to be discussed at our next scope. Currently, the draft framework already proposes the need to raise $200 billion per year of financial resources, which will be required for the implementation of the framework. And out of that 10 billion per year is the movement of resources from developed to developing world.

Elizabeth Mrema:

So clearly the recent statistics have already given us that figure and the framework has taken cognizance of that. So for many countries, how we'll get these resources will be key. But by saying so, we are also saying, it doesn't mean that the financial resources 100% have to come from international financial flows, but from all sources, international, domestic but also disincentivizing nature, negative finances. Currently, statistics show that $500 billion are spent from nature, negative outcomes and we need this to to be repurposed, redirected into nature, positive outcomes.

Elizabeth Mrema:

$100,000 billion US alone, incentivizes harmful agriculture. So you see, if these resources are redirected, we'll already be able hopefully to get half, if not more of the required resources per year for the implementation of the framework. Not only that, the world economic forum has given us statistics which show that, almost half of the worlds total GDP specifically $44 trillion being moderately or highly dependent on nature and its benefits or services. And all we are saying there is money there, and this shows why even the private sector has an interest because these expose to risk from nature loss.

Elizabeth Mrema:

And we're basically, also saying that, if we're able to transition from nature, negative economy to nature, positive economy, that will be able to generate $10 trillion in business opportunities and being able to create almost 400 million jobs by 2030, in fact, specifically 395 million jobs by 2030. So you see, there's a lot of money which he needs to be repurposed, redirected into nature positive.

Jason Mitchell:

How do you talk to that in terms of whether it's statistics or a message? And I guess, I want to draw out climate change as a parallel. climate change has benefited significantly from a very reductionist approach. By that I mean, by describing its arc, by say the atmosphere can increase in CO2 purports million or galvanizing governments in the private sector under the rates to net zero, which we've seen into the climate COP-26 later this month.

Jason Mitchell:

Critics and I fully recognize this, critics would say it's overly simplistic, but it has been incredibly effective at galvanizing climate action. What's the analog for biodiversity in your perspective? How do you condense the vast complexity and biological breadth of nature into definable targets that aren't overly general? And by that I mean, for instance, the 30% protection by 2030 target.

Elizabeth Mrema:

Biodiversity loss and climate change intrinsically connected. And biodiversity plays a big positive role in climate change adaptation and mitigation because biodiversity contributes about 30% of the greenhouse gas emissions. So for example, conservation of habitats can reduce the amount of carbon dioxide released into the atmosphere, and this is what the forest does. Not surprising that major subject of climate change now, and even as it prepares to COP-26, nature based solution comes out more and more. So if climate change sees nature being part of the solution for climate change clearly then for biodiversity, loss equally nature is critical.

Elizabeth Mrema:

If nature is degraded, it affects biodiversity. It affects climate. Although of course, for biodiversity, we'll also add ecosystem based solutions. So both nature based solutions, but also ecosystems based solution. So you can see each depends on the other, in terms of solutions. The scientific research of course still needs to identify for us all the complex interaction between biodiversity and ecosystem functioning globally. And in this context, a simple target just rates to net zero is rather challenging to conceptualize for biodiversity, because such complexity of course is considered in the context of global biodiversity.

Elizabeth Mrema:

And to this effect, we see the framework coming with different targets for different things, which are comprehensive enough to reflect that complexity of biodiversity and its various ecosystems. But to say, we'll be able to get the 1.5 degrees like climate in their complexity, mosaic biodiversity, which can compose many things it's still a challenge.

Elizabeth Mrema:

But who knows when we get into the negotiations, we might get to magic figures.

Jason Mitchell:

Let's switch lanes a little bit and go into the TNFD or the Taskforce on Nature-related Financial Disclosures, which congratulations, you are a recently appointed co-chair which is a fantastic role. I guess, sort of looking at TNFD, one thing that is clear is that it borrows a lot from the TCFD or the Taskforce on Climate-related Financial Disclosures, that framework which makes complete sense. One area though, where it gives much more breadth where it diverges from TCFD is in the interpretation of nature related risks and opportunities.

Jason Mitchell:

Yeah. Again, speaking to that vast complexity of what nature represents, is that a necessary compromise, given the lack of historical nature related data and data metrics that we have? TCFD at least had the benefit of starting with 15 years of carbon disclosure project data, as well as scope one and two, and even to some degree three GHG reporting protocol.

Elizabeth Mrema:

You are right. When we look at climate change issues, and the world looking at climate change or action as the case may be, it started many years ago before biodiversity became the center of discussions as it is today. And that's why I'm saying, probably pandemic has also provided that awareness opportunity, which probably would not have been where it has reached today. But you are also correct that TNFD really borrows and we rely heavily on TCFD because we don't want to reinvent the wheel. And the actors, in most cases, if we are talking to the financial sector, we are still talking to the same stakeholder.

Elizabeth Mrema:

So you want this stakeholder when they look at climate related risk and nature related risks, they should see that the two speak to each other, and especially if we say climate change and biodiversity loss are connected. So TCFD provides us the framework for financial institutions and corporates to be able to identify and report, not just on climate related risks, but TNFD we learn from that, build upon that to be able to now, to deliver as a framework for financial institutions and corporates to report and act on evolving nature related risks.

Elizabeth Mrema:

So basically is how their operations or investments will impact or impact all depends on nature. And therefore, to what extent are they exposed to nature related financial risks. TNFD of course, hopefully we'll also call on financial sector to integrate financial related risks in their decision-making, financial and corporates need decision data. And recently under the secretariat, we actually had a workshop or with financial sector in June, and basically looking aware, looking at the importance of biodiversity data is a key issue for TNFD. And because TNFD only came recently, but of course, remember the last two years we had an informal working group working on these issues with the financial sector.

Elizabeth Mrema:

So a lot of groundwork has already been done and would want the financial sector, not just to look, data is one, but not just only financial, I mean, in nature related risks, but also opportunities. Because if for the $4 trillion depends are highly dependent on nature, $10 billion per year comes from nature, there are opportunities there, clearly. So the risks and opportunities need to be looked together, but you need the data and the data then will be key. And in this workshop, of course, they underlined the importance of data collection and management of that data is still a challenge.

Elizabeth Mrema:

And the express they need, the participants have relevant data being translated into a meaningful information, which they can use. And currently, of course, for a number of NGO, they were saying data is scattered across just too many data basis, and they counted about 300. So there's need to consolidate all this data and make it more easily accessible, not just to individuals, but also public and private organization.

Jason Mitchell:

There's another divergence between the TNFD and TCFD, which I personally welcome. I think it's fantastic to see. I do think I recognize that it is a bit contentious or controversial depending on where you're looking jurisdictionally at this. And that's around this issue of double materiality or outside in, inside out. And TNFD specifically includes it within its text, where TCFD solely looks at the financial materiality of climate impacts on the company itself so it actually doesn't address double materiality. Can you give us some context for how this came about? Also, how does this choice in some respects complicate an already complex effort?

Elizabeth Mrema:

Not being an expert on TCFD matter, but don't try to relate that into TNFD. I think first, we need to realize just as with climate, nature related risks can affect the operations of companies, as well as financial institutions, and that's leading to financial risks. But of course these companies and financial institutions can also affect biodiversity through their activities in financing and therefore contributing to biodiversity loss. So actually many businesses are dependent on the proper sourcing of biodiversity in their supply chain.

Elizabeth Mrema:

Furthermore, of course, for TNFD we are, as I said, is basically to recommend the use of both nature related risks, but also opportunities and take this broader perspective to refer to the risks because we know the opportunities with an organization posed by the linkages between those activities and nature. And of course, when we say opportunities, that then brings in the incentive to really see what TNFD wants to come about with, and get the financial institutions to engage into it. But in the short term, financial risks, which includes unfortunately longer term risks represented by the impacts and dependencies on nature.

Elizabeth Mrema:

That means that organization will need to disclose not just how nature may impact the organization's immediate financial performance in terms of looking from outside in, but also how the organizations will be impacted by nature and looking from inside out, either positively or negatively. So it will be fundamental, to consider both aspects related to nature related risks, even if this does not make our work of future business of reporting easy and will make it more complex, I think is the best way to address them better beginning it now, rather than doing it later.

Jason Mitchell:

I agree with that. We talked a little bit about the lack of biodiversity data and at the same time, the high number of existing frameworks. And I'm wondering, in your mind, how does the TNFD avoid clashes with other initiatives? Initiatives like the OECD, Multi-Stakeholder Group, the emergence of national biodiversity policies, like the EU 2030 Biodiversity Strategy. I guess more importantly, how do you see the TNFD framework co-existing with national policy efforts?

Elizabeth Mrema:

Yes. Important question. And it's not the intention of TNFD to overlap or conflict, so it will be important to really also take stock of existing relevant initiatives. So that then TNFD either fills the gap or uses the existing information in its own to create that harmony and synergy among different initiatives, because otherwise then it will be a total confusion to the financial sector. And if we can't have them on board now, then we will lose them in the longer term causing more biodiversity loss, including climate change.

Elizabeth Mrema:

So what TNFD intends, we hope that the TNFD will define the framework that we'll be able to serve as a mechanism to help organizations understand, disclose and manage their financial risks and opportunities associated with a deteriorating state of nature. While of course, transitioning to an economy, consistent with meeting the future, nature related, international agreements, like our own Convention on Biological Diversity, as well as the ambition being set out in the post 2020 global biodiversity framework. We hope also there will be a need to align with and draw from the existing framework, initiative standards and avoid any duplication or conflict when we develop standards either for disclosure or broader activities themselves.

Elizabeth Mrema:

And we hope that then by doing so then TNFD, intend for each outputs to be integrated into existing frameworks and standards in the space that has already been developed or published in these other different initiatives. For instance, to be able to engage and draw from the work of key bodies is like Financial Stability Board or Network of Central Banks for Greening the Financial System and the like. And we also hope that the reporting mechanism will be based on standards and national, international regulations that already exist, all being developed by governments and others stakeholders.

Elizabeth Mrema:

For instance, we know recently the French financial institution are required by a new law in France from their French financial regulator to disclose both biodiversity and climate related risks and impacts of their work. In the same way, the EU 2030 Biodiversity Strategy, as well as ongoing being discussed UK environment bill seek to use disclosure to understand what impacts and dependencies offer in organizational sector or nature. So all these initiatives are actually in favor of biodiversity, complimenting each other, contributing to the Aichi Biodiversity Targets. But, of course, obliging now the financial sector to report on the impacts on the dependence of their operations or nature or biodiversity.

Jason Mitchell:

Yeah. It's such an ambitious effort. How do you see the TNFD managing to be broad enough to be a common framework, yet still able to address challenges around geolocation in geo specificities? Many people sort of point to the fact that, a gallon of water in Montreal, for instance, isn't the same as a gallon of water in Chennai India?

Elizabeth Mrema:

TNFD's approach is meant to be inclusive. It's meant to work with existing standard bodies to be able to develop that hopefully, a global framework, which draws from existing initiatives and standards that are relevant. So it is in these discussions that then we'll be able to understand, yes, we are dealing with a gallon of water, but is different from one country to the other, or different from one region to the other. And what does that mean to develop a global standard which brings align these different specificities? And of course, by doing so hopefully then the framework will undergo a lot of pile lots in order to be able to refine and ensure it's applicable in different sectors and different geographies. That's what I can see.

Jason Mitchell:

Got it. What role do you see the private sector, particularly markets playing in biodiversity? Besides pointing to an institutional failure, I found this descriptive review out of the UK, particularly interesting in terms of it claiming that the decline in natural capital, which it seizes declining by 40% per person, between 1992 and 2014. It also represents a market failure, so it's not just an institutional failure, it's a market failure. And as we know, market prices don't reflect the true value of services and products that nature provides for free.

Elizabeth Mrema:

Yes. And indeed, that's why Dasgupta really criticize that thinking where the economic theories being used currently looking at nature as a product for free and not costing nature in its work. No wonder we've blunder it and now we are paying for it. But private sector has a key role to play in reversing nature loss. And this is what Dasgupta is reminding us in the review. Investments in nature, positive activities or companies, or transition to sustainable production practices, transformation of supply chains, assessment of impacts and dependencies on nature. Likewise, biodiversity risk identification and management all count among the initiatives, the private sector can take.

Elizabeth Mrema:

The public sector has on the other hand, complemental role to play also in supporting these efforts through the implementation of economic and financial sector policies and regulations that can directly then impacted the operation of companies from private sector. So among those policies that align incentives and market prices are all central in order to internalize the negative externalities. The private sector and public sector need to work together to limit and even prevent the market failures. So one cannot work against the other.

Jason Mitchell:

I've got Elizabeth, one more question, in staying with this market's theme. Climate policy and environmental economics have, in essence, helped produce carbon markets. How do you see markets providing a price signal to protect against biodiversity the loss and nature related risks? What are the ways in which biodiversity can leverage nature based offset markets in particular?

Elizabeth Mrema:

Number one, of course, the climate community and biodiversity community need to work together. So as you note, ecosystem services and benefits are under-priced and therefore under provided. And hence we need the public policies institutions that may seek to address this imbalance by reforming the subsidies policies, which then compliment standards and regulations to support ecosystem conservation and restoration. We need economic instruments such as biodiversity relevant taxes, fees, and charges, tradable permits, biodiversity offsets, and payments for ecosystem services that can also be used as tools to better reflect the cost of biodiversity loss on the economy and the human wellbeing. So clearly nature can no longer be for free to plunder.

Jason Mitchell:

Such a great way to end this. Thank you so much, Elizabeth. So it's been fascinating to discuss how discussions are progressing into the run-up to the COP-15 UN Biodiversity Conference. What can be improved upon from the 2010 Aichi Convention Targets and why it's vital that global market led initiatives like the TNFD provide a framework to report and act on nature related risks. So I'd really like to thank you for your time and insights. I'm Jason Mitchell, Co-Head of Responsible Investment at Man Group. Here today with Executive Secretary Elizabeth Mrema, Executive Secretary of the United Nations Convention Biological Diversity and co-chair of the Taskforce on the Nature-related Financial Disclosure. Many thanks for joining us on A Sustainable Future, and I hope you'll join us on our next podcast episode. Thanks so much, Elizabeth.

Elizabeth Mrema:

Thank you very much, Jason.