COP16 Review: Progress, Challenges, and the Role of Investors in Nature Conservation

If Nature Is Salsa, Investors Are Starting To Dance

Last month I joined over 15,000 investors, corporates and civil society representatives, including delegates from 177 nations, in Cali, Colombia for the UN’s COP16 summit to progress global commitments to halt the destruction of nature.

It was fitting that the summit was held in Cali, a town famed as the home of Colombian salsa – a dance that is complicated, technically demanding and requires close coordination with partners. All of which apply equally to the task of building a nature-positive economy.

In my discussions with investors, policymakers and other participants it was clear that to build on the 2022 Kunming-Montreal Global Biodiversity Framework (GBF), and mobilize the $200 billion per year from public and private sources that the framework needs to succeed, it will also be complicated, technical and in need of constant collaboration.

COP16 Makes Progress But Leaves Key Issues Unresolved

The high-level outcomes of the conference were mixed. On one hand, there was some encouraging progress, including the creation of a new body to embed Indigenous Peoples in future biodiversity decisions, a new UN-operated ‘Cali Fund’ to encourage corporates to help fund wildlife conservation through the genetic materials they source from natural ecosystems, and a new framework to identify Ecologically or Biologically Significant Marine Areas.

On the other hand, it was disappointing that only 44 of 196 countries submitted updated National Biodiversity Strategies and Action Plans (NBSAPs), and there was disarray as the summit ran out of time. Despite national delegates holding through-the-night negotiations, the summit ended without a concrete agreement on the funding required to implement the GBF.

Investment Community Rises to Address Nature Risks and Opportunities

With national delegates unable to agree on a path forward on finance, the investment community, including a delegation of about 100 global institutions coordinated by PRI, showed a willingness to take initiative.

So, what’s driving greater investor engagement on biodiversity now? There are several factors.

First, the business case for managing nature risks is growing, especially in more exposed sectors. Investors are seeing, for example, that biodiversity loss is impacting harvests, that overuse of fertilizers is decreasing soil quality, and nature loss is driving more climate change. As one example, PepsiCo reported that in 2021 poor crop yields of potatoes, wheat, and other ingredients – partly linked to degraded soil quality and loss of natural pest control – contributed to a 5.3% increase in operational costs for the fiscal year.¹

Second, investors are taking the work of the Taskforce on Nature-related Financial Disclosures (TNFD) seriously. TNFD has now been adopted by almost 500 organizations across 50 jurisdictions, with a 129-strong group of financial institutions, managing over $17 trillion of assets adopting its framework. That’s a 57% increase since January.

There is also wide recognition that climate and nature are not only two sides of the same coin but that they are integrated. Climate risks drive impact on nature, and nature degradation accelerates climate change.

Investors Shift Toward a Holistic Approach to Nature-Related Risks

But it is how investors are acting on nature-related risks that was the most exciting development I saw at the UN summit.

First, while there were individual projects and funds presented at COP16, such as the Objectif biodiversité fund run by 11 French institutions, and the European Investment Bank/World Wildlife Fund partnership on ecosystem restoration, most investors were taking a portfolio-wide approach to nature.

Investors are using frameworks such as LEAP (see Figure 1) to map their dependencies on nature and understand the risks that they need to manage across their entire portfolio, not just biodiversity targeted funds.

Figure 1. Leap Approach for the Identification and Assessment of Nature-Related Issues

A powerful example of this came from the Netherlands. Following a similar exercise by the Dutch Central Bank, Rabobank assessed its exposure to nature-related risk and found that approximately 85% of its assets were ‘highly’ to ‘very highly’ dependent on one or more ecosystem services. It has since published its nature vision and is reporting the actions it is taking to manage its impact on nature.

Second, as shown in Table 1, there are now a significant number of investor engagement initiatives aimed at helping markets go beyond narrowly integrating nature in the investment decision making process, but also recognizing their stewardship role in nature. As a matter of fact, the large number of initiatives is starting to get investors confused, though fortunately at COP16 the different secretariats made explicit reference to cross coordination amongst each other. 

Table 1. Investor Engagement Initiatives on Nature and Biodiversity Metrics

Nature Action 100

A global investor initiative, in partnership with IIGCC, Ceres, Finance for Biodiversity Foundation, and Planet Tracker, that sets clear Expectations for companies related to their Ambition, Assessment, Targets, Implementation, Governance, Engagement to protect and restore nature and ecosystems.

SPRING

A PRI-led stewardship initiative engaging with companies on systemic nature risks including forestry loss and the adoption of supportive public policies to conserve nature.

FABRIC (Fostering Action for Biodiversity through Responsible Investment in Clothing)

Coordinated by the Finance for Biodiversity Foundation, FABRIC is an investor-led collaborative engagement initiative designed to address the environmental impact of the textile industry, with a particular focus on apparel retailers.

FAIRR’s different engagement initiatives

An investor-led initiative with biodiversity-related engagements on mismanagement of agricultural waste and sustainable aquaculture (see here)

Nature Collective Impact Coalition (CIC)

Convened by the World Benchmarking Alliance, the Nature CIC seeks to get companies to assess and disclose their nature-related risks, dependencies and impacts, using the WBA Nature Benchmark to track progress.

Investor Policy Dialogue on Deforestation (IPDD)

Supported by PRI, it is an investor-led sovereign engagement initiative that aims to halt deforestation in some of the world's most biodiverse, carbon-absorbing biomes.

Third, investors are actively using a wide range of tools to strengthen their role in nature-related efforts. There was wide ranging-discussion around innovative vehicles like blended finance, nature-based solutions (such as peatland and mangroves), debt-for-nature swaps and, perhaps most contentiously, biodiversity credits.

The latter are a mechanism for market actors to channel financial flows into nature transition projects and COP16 saw the International Advisory Panel on Biodiversity Credits launch its framework for “high-integrity” principles for biodiversity markets, supported by France and the UK. But there were mixed views with support for these ideas matched by civil society pushback.

Finally, the investment community is also starting to address the nexus of climate and nature action. Two of the more consequential launches at COP16 were the Glasgow Financial Alliance for Net Zero (GFANZ)’s guidance on how financial institutions can integrate nature in their net-zero transition plans; and the TNFD roadmap for how mainstream investors can access decision-useful nature data.

Data Advances Empowering Investors to Act on Nature

One of the most encouraging and exciting developments for investors has been the rapid evolution of data and analytics. This progress is helping to address some of the challenges of investing in nature-related risks and opportunities.

Effective, often free, Earth monitoring tools—such as satellites, sensors, eDNA, and AI solutions—can help provide the private sector with granular nature data. One delegate mentioned to me that deforestation monitoring technology now allows conservation authorities to detect deforestation activities within days.²

The availability of data could be a gamechanger. However, the elephant in the room is that companies don’t know, or are uncomfortable to share, the location of their assets or that of their supply chains. And if investors don’t have easy access to this information (i.e. information on where a specific factory, mine or other assets are located), then they can only make limited use of these Earth observation solutions. There was some frustration on this and discussions on how to either better persuade firms to part with this information and to find solutions – such as Clarity AI’s Geospatial Asset data – that can fill in the gaps.

Data provider GIST Impact, a partner of Clarity AI, pointed out that some of the most important nature indicators are “hidden in plain sight”, in that they are already being reported in other frameworks or platforms. These include GHG emissions, freshwater consumption, water and land pollution, air pollution, waste (toxic and non-toxic) and land use. But it is not until this data is linked to a company’s specific operating location that investors can understand the biodiversity risks or impact presented in a decision-useful way .

For example, high water usage reported by a beverage company may not be flagged as an investment risk. But if the water is being used at a primary production facility in a water-stressed region, then it could be a material risk.

Additionally, while investors have expressed concerns about aggregating biodiversity data into a single metric, biodiversity footprinting is gaining traction by some as part of a broader investor toolkit. By leveraging the operational indicators mentioned earlier , along with Life Cycle Assessment (LCA) models, data can be integrated into a unified metric, such as the Potentially Disappeared Fraction (PDF) of species. This enables investors to assess and compare ecological impacts at a company and portfolio level, providing a high-level perspective that can be supplemented with additional data and tools for deeper analysis.

Despite these complexities and open questions, there was one resounding call to action: don’t let the challenge of imperfect data prevent investors from taking action.

Moving Forward One Step at a Time

One thing is clear: addressing nature in your portfolio – looking at risks, dependencies, opportunities and impacts – can be as complex as dancing salsa. Each investor and company faces unique challenges that vary by time and location. But, just like salsa, progress happens one step at a time.

With more data now available, investors can develop better, more tailored ways to use it to their advantage. They also need closer collaboration with policymakers and civil society to make meaningful strides in disclosure, especially encouraging ISSB to incorporate nature & biodiversity.

As thoughts turn to COP29 in Baku and the next biodiversity COP in Armenia in 2026 we look forward to working with more global investors to take their next steps on nature and biodiversity.