Nature Loss Risk Ramps up
Recovery blueprint highlights opportunity to capitalise on renewable assets to bolster agriculture and food demand.
Nature restoration is essential to addressing biodiversity and climate-related risks to finance, ecosystems and human health, research by investment manager Foresight has highlighted.
Released last week, the Nature Recovery Blueprint offers practical guidance to land managers, developers and asset managers in implementing nature-positive management practices across renewable energy sites, and recommends actions encouraging the generation of renewable electricity.
“Within a renewables portfolio, the operational risks due to biodiversity and nature loss are limited,” Henry Morgan, Sustainable Investment Lead at Foresight Group, told ESG Investor. “However, the risks associated with biodiversity and nature loss at a national and international level are far more significant.”
Declines in natural habitats and biodiversity directly correlate with increased levels of pollution, Morgan explained. For instance, the proliferation of pests affect food production and reduced water quality.
“All of these have major impacts on human wellbeing,” he added.
Significant loss risks
The World Economic Forum previously warned that over half of the world’s GDP was exposed to moderate or severe risk linked to nature depletion.
Biodiversity loss, in particular, poses a significant threat, and is considered as the biggest driver of infectious disease outbreaks. According to UK NGO the BRE National Solar Centre, 60% of the world’s 3,146 monitored have declined over the past 50 years. A fifth of nature’s ecosystems is also said to be on the verge of collapse.
“Everyone has their part to play in delivering nature positive outcomes,” said Morgan. “As asset owners, institutional investors are in a position of significant influence to enable this.”
Last month, a group of international researchers who spent 10 years examining various measures said that nature conservation actions had proved effective at reducing global biodiversity loss, offering a “ray of light” for those working to protect threatened animals and plants.
But further funding is needed to ramp up these efforts. It has been projected US$8.1 trillion in investment will be required to effectively address interlinked climate, biodiversity, and land degradation crises between now and 2050.
“Through informed engagement, and equipped with practical guides such as the Nature Recovery Blueprint, institutional investors and their stakeholder base are in a unique position to drive meaningful change,” Foresight said in a statement. “Investing in nature not only benefits the environment but brings advantages to both local and global economies. It enhances resilience to future challenges and contributes to climate change mitigation.”
Although Foresight’s blueprint focuses on solar sites, it is applicable to other asset types – including wind, forestry, and pumped-storage hydro.
“There is a real opportunity for land owners and managers to help combat negative impacts through the implementation of nature-positive land management practices,” Morgan said. “This is especially the case across sites that have previously been degraded through overuse – as is often the case with solar sites.”
For instance, agrivoltaic farming offers the opportunity to double up on land use, and could help to better feed the world’s growing population while generating sustainable energy.
Seizing the opportunity
The UK government has also emphasised the need for increased support for natural capital and renewables. In 2020, it launched the Nature Recovery Network: a framework for local nature partnerships involving businesses, local organisations and individuals with an interest in improving their natural environment.
“At societal and political levels, there is now an ever-increasing understanding of both our collective dependence on nature and the associated importance of protecting and restoring it,” said Morgan. “Pressure from both underlying investors and regulators has put the management of biodiversity and natural resources front of mind for a lot of institutional investors.”
Earlier this year, the UK’s Department for Environment, Food & Rural Affairs (Defra) launched Projects for Nature: a pioneering online platform connecting businesses and other donors with 23 expert-screened nature recovery projects across England. Although Defra noted the important role that private finance has to play in delivering the plan, it said “current levels of private [investment] in nature are far from the scale needed to achieve its ambition”.
To address this gap, the government launched the Nature Markets Framework as part of its 2023 Green Finance Strategy, aiming to boost private finance for nature recovery and sustainable farming by £500 million by 2027, and by more than £1 billion by 2030.
Across the Channel, 11 EU member states this week backed Ireland’s call to adopt the long-awaited Nature Restoration Law (NRL) during the next Environment Council meeting on 17 June. The European Parliament and Council reached an agreement on the NRL in November last year, pledging to restore at least 20% of land and sea areas by 2030 – and all ecosystems in need of restoration by 2050.
At the time, ClientEarth Nature Conversation Lawyer Ioannis Agapakis warned the NRL had be watered down and that the absence of legal safeguards risked setting a damaging precedent for wider EU lawmaking.
Separately, the World Wide Fund for Nature (WWF) this week accused EU member states of channelling between €34 billion (US$36.8 billion) and €48 billion of subsidies annually into nature-harming activities.
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