Why we value biodiversity
At Swiss Re, we believe the decline in natural assets and biodiversity is an escalating threat that does not currently receive the attention it warrants. Preserving nature’s vitality holds the key to a more resilient and prosperous future. Delivering on our net-zero commitments can only happen through a nature-positive approach.
Conversely, nature's decline poses an existential threat to humankind, which stands to suffer just as much as the flora and fauna suffering before our eyes already. Nature has always been an integral part of the capital assets we deploy in our productive activities, but we do not fully reflect its value. We have developed an extractive attitude, based on the erroneous assumption that nature's gifts are free and plentiful.
In fact, our earth's ecosystems are complex systems with inner balances and boundaries, some of which have been pushed too far. The cost of biodiversity loss risk is very under-represented, hardly reported and barely accounted for.
Consequently, we must accelerate the conversation around fully appreciating, protecting, and restoring global biodiversity. That requires us to take stock of ongoing efforts, launch new activities to track and measure our impact on nature whilst we establish explicit whole-of-society targets underpinned by strong public sector policies and appropriate incentives. Only nature positive business practices can lead to sustainable business models, in the financial sector and in the real economy alike.
That is why we have organized our SONAR Dialogue on Biodiversity series, to deepen the conversation over what together with climate change is the biggest challenge of our time.
At our most recent session, we were joined by Elizabeth Maruma Mrema, Executive Secretary of the United Nations Convention on Biodiversity and Co-Chair of the Taskforce on Nature-related Financial Disclosures (TNFD), Diane Holdorf, Executive Vice President at the World Business Council for Sustainable Development (WBCSD), and Christophe Nuttall, Executive Director of R20 – Regions of Climate Action.
This public, virtual event was especially timely, since Ms. Mrema had just returned from the COP-15 UN Biodiversity Conference in China, where more than 100 countries pledged to make habitat protection and biodiversity considerations central in their economic decision-making. Despite the heightened levels of commitment, we have a long road ahead and little time at our disposal. Ms. Mrema’s emphasis on public-private partnerships as a means to tackle habitat and biodiversity loss, and the crucial role that risk knowledge companies - like Swiss Re - will play, especially resonated with me.
"You have the specific expertise in beginning to assess the nature-related risks," Ms. Mrema told us. "That expertise will be useful to governments."
What we're doing already
For years, Swiss Re has been raising the profile of nature's contribution to human well-being. We recently published the "Biodiversity and the benefits for human health" study, where Swiss Re Institute scientists demonstrated how time spent in nature is critical for physical and mental well-being.
In 2020, Swiss Re also launched its Biodiversity and Ecosystem Services Index (BES), assessing and holistically comparing ecosystems around the world and documenting how in dozens of countries they are already today in a fragile state. The report also underscores a staggering statistic: A full 55% of global GDP depends on high-functioning services provided by nature, including food and water security and regulation of air quality. This high nature dependency represents a significant opportunity for governments and the private sector to partner and drive forward coordinated actions, both to halt damage to nature and begin its restoration. We all stand to win!
Our interactions with nature are very local, and responses need to be local, too, to be effective. Mobilizing public and private funds is critical, and that is easier said than done when we have systematically undervalued nature capital for decades and we regularly fail to fulfill sub-sovereign adaptation financing needs. To keep us inspired to act on this challenge, Mr. Nuttall shared a very novel initiative, the Global Fund for Coral Reefs, investment window, a blended finance equity mechanism aiming to mobilize $500 million (out which $125 million has been committed by the Green Climate Fund) for coral reef conservation around the globe, backed by various UN agencies, MDBs, philanthropies such as the Prince Albert II of Monaco Foundation and Paul G. Allen Family Foundation and private sector financiers.
Still, this is only the start. "We need to replicate, we need to scale up," Nuttall said.
We won't go far without establishing coherent frameworks, disclosing and independently assessing. Modeled after the six-year-old Task Force on Climate-related Financial Disclosures, the Taskforce on Nature-related Financial Disclosures (TNFD) aims to deliver a risk management and disclosure framework for companies to report and act on nature-related risks as part of strategic planning.
Ms. Mrema is co-chair of the TNFD and Swiss Re is a founding member, in the company of the world's most recognizable companies as well as the World Wildlife Fund (WWF), The Nature Conservancy and the United Nations Development Programme. Together, we are seeking to put words into action on preserving biodiversity, including by pricing nature in insurance.
To initiate global processes that succeed in protecting and restoring nature, on which our lives and livelihoods directly depend, is a colossal undertaking. But it is clear to me we have no other choice.
"Every sector must"
Nature is severely affected by anthropogenic climate change. That's one more reason why Swiss Re has made binding pledges on the climate front, including a phase-out of activities to insure thermal coal within two decades. At Swiss Re, we believe climate and nature are joint challenges that must be addressed simultaneously. We hope this message will be embraced by the global leaders meeting this week for the COP26 climate summit in Glasgow, as they negotiate strategies to avert the disaster of a warming planet.
As WBCSD's Diane Holdorf put it during our discussion, every participant in the economy must join in efforts to protect and restore biodiversity. "Not only can it, but every sector must," Ms. Holdorf said. "We've got to develop these roadmaps that get us to a net positive regenerative future, or we will never really halt biodiversity loss and get to full recovery."
With the WBCSD representing over 200 companies committed to a sustainable future, hearing these words was a confirmation for me that "partnering together" is the way forward. And so we shall.
For a replay of the October 28th event, please click here. If you too believe in a more nature-positive world, please join our next "SONAR Dialogue on Biodiversity" event on November 23rd, where the EU's Biodiversity strategy lead, Virginijus Sinkevičius, European Commissioner for Environment, Oceans and Fisheries and financial industry executives will discuss Europe's shift to green investments. Information is available here.