5 messages we heard at the Nature Hub at New York Climate Week

We cannot achieve global climate goals without nature. More than that, nature supports basic needs like clean air and water; it safeguards us against extreme weather like floods; and it supports our wellbeing now and for future generations – just to name a few.

The good news: Nature continues to take up more space on the climate agenda. Private sector actors are increasingly interested in how their investments can not only reduce carbon emissions, but also provide broader benefits to healthy ecosystems as a whole. If it’s any indication, this year’s Nature Hub at New York Climate Week, which was focused on driving transformative change for a nature-positive economy, had a waitlist of hundreds of people hoping to engage in finance for nature.

The challenge, however, is that these broader ecosystem benefits are also much harder to account for than a ton of carbon. How can investors ensure their dollars are really benefiting healthy ecosystems and improving biodiversity? What do success and integrity look like? And what types of projects should they invest in to meet these goals?

Conversations at the Nature Hub aimed to get clarity on some of these questions. Below are 5 key messages we heard:

1. High-integrity projects engage local communities as equal partners and include local and traditional knowledge.

This message is one we’ve heard repeatedly, and it resounded across many Nature Hub panels. In the panel, “Navigating the changing landscape of high-integrity in tropical forest crediting,” Juan Carlos Jintiach from the Global Alliance of Territorial Communities emphasized that high integrity means that communities are engaged as equals in the project (versus participants or stakeholders) and their knowledge and contributions to forest conservation are respected; there is transparent information-sharing; and there is reciprocity between all actors. It was loud and clear that, as Joshua Tosteson of Everland emphasized, first and foremost, high integrity means that forest communities are beneficiaries of project benefits.

In conversations specifically about biodiversity, speakers also noted the importance of taking into consideration the species that have particular cultural, subsistence, or commercial relevance for the people living there and making sure this is accounted for in the project plan.

2. Biodiversity is not carbon, and metrics and expectations need to reflect that.

In a roundtable discussion on biodiversity projects and investments, participants identified a major challenge as managing the expectations of investors. Many companies and investors want to see biodiversity increases of X% as the metric of success, yet the sheer number of species is not the sole indicator of healthy ecosystems and biodiversity.

When we think of a “biodiverse landscape,” we think of one with an abundance and wide variety of species, from plants to animals to microbes. But participants at the roundtable cautioned on setting the right metrics that accurately represent the end goal for that landscape. One speaker gave the example of restoring a mudflat to a mangrove forest. She noted that the mangrove forest might actually have fewer species of aquatic birds than a mudflat, even though the mangrove version of landscape is still the healthiest version. Not to mention which species are supposed to be there (native versus invasive) and the fact that many animals will move in and out of the reference and project areas.

It was also noted that many investors tend to largely focus on “biodiversity hotspots.” While these places are incredibly important and irreplaceable, it is also important to ensure funding gets spread out to other essential ecosystems around the world. That can look like investors working with organizations, project developers, and local communities to find a location with the right enabling conditions and relationships so that the funding can have the greatest possible impact.

3. When it comes to biodiversity, the devil is in the (project) details.

Just because the project is nature-based, that doesn’t necessarily mean it will also increase biodiversity; biodiversity and landscape conservation goals must be intentional in addition to any carbon mitigation goals. Projects need to have a restoration strategy in place that has specific, realistic, measurable, and time-bound targets. Investors should keep their eyes peeled for projects that specifically lay out a plan for biodiversity.

In fact, the best plans have the most detail. Since biodiversity is truly unique across every landscape, it is imperative that high-quality projects lay out: 1) metrics for success based on a clear baseline with an identified reference area; 2) a monitoring plan (along with who is doing the monitoring); and 3) a realistic budget that reflects the vast resources needed to restore a healthy ecosystem.

4. Risk, risk, and more risk.

Across many discussions at the Nature Hub, there was a lot of apprehension amongst corporate representatives around investing in carbon, biodiversity, and other nature-based projects. Given wide criticism in the media this past year and a half, many are prioritizing reputational risk even though they are still motivated to invest in nature. Companies fear backlash if a project they invest in suddenly goes down in flames. Right now, “safety trumps motivation,” as Josh Tosteson put it.

However, the appetite for investment is still there. Many companies are also still purchasing credits, they just aren’t talking about it.

But, as Francois Carre from BNP Paribas emphasized during the panel, “[When] navigating the changing landscape of high integrity in tropical forest crediting,” “no risk doesn’t exist.” It’s about how you assess and deal with it, he said. So, while on the one hand, it is important to provide some extra assurance to these investors instead of criticizing them for taking any action at all, it is also the private sector’s responsibility to step up, recognize their purchasing power for nature, use their powerful voice as a force for good, and encourage others to follow suit.

5. We need to embrace nature’s nuance.

Biodiversity is much more nuanced than its carbon cousin, not as easy to measure, and has much more variability between landscapes. During the biodiversity roundtable discussion, as well as during a panel on “Measuring Nature Positive Outcomes,” participants stressed the need to balance the need for quality and integrity without becoming so focused on the best metrics and regulations that the perfect becomes the enemy of the good. First and foremost, the purpose of climate finance is a means to restore and protect nature. Metrics need to drive quality action, not be so complex that they stifle it. The number one goal should be getting this finance where it is needed most to protect nature and biodiversity. Then the focus can transition to improving the metrics, collective action, and integrating nature metrics on a broader level. What’s the end goal? According to Tony Goldner from the Taskforce on Nature-related Financial Disclosures, we “need to move to an integrated approach where carbon is part of nature.”