A common thread has emerged from COP16: private finance mobilisation will define the scale at which progress grows in the coming years, but it cannot do it alone.
Anita de Horde, co-founder and executive director, Finance for Biodiversity Foundation, explained - in a FinextraTV Unplugged Interview - that we need to move away from a reliance on philanthropy as a primary source of funding.
“You see this a lot, also at COP16, a lot of debates on biodiversity credits and blended finance instrument thinking - but the big picture: how can you shift that 99% and what’s the solution? That debate also needs to take place and that’s unfortunately a little more difficult than saying ‘Now, let’s put some money from north to south and then we’re there.'"
When discussing the complexities of mobilising the private sector, de Horde pointed to the need for collaborations from local governments and the need for more qualified data.
“They can’t do it alone so there’s also a need from governments to act to de-risk, to support, to help. Collaboration is key in this so that’s one bit but we also have a lot of asset managers that have a lot of listed equity in corporate bonds and they need to work with big data to really understand how they can repurpose“
The private sector has already been getting involved since the introduction of targets, an increase of representatives growing exponentially with each COP.
“There was a big momentum after COP15 and it was the first COP ever - CBD COP - in which the finance sector was really appearing all of a sudden. Rumours go that there was only one banker at COP14. At COP15, there were 100s of them. This COP16 in Cali, Colombia, there were more than ever and there was a great involvement from private companies as well so it showcased that biodiversity is becoming almost mainstream."
It’s true, though, that many are still a little unsure or misguided on where to place their efforts in order to be mobilised in the way they need to be. In particular, companies are in need of greater data-driven insights to inform the most effective use of time, money, and resources.
“They need data to calculate their impact: negative, but also the positive side. So data at scale, derisking [...] in order to know that sort of fund or nature investment or solutions will flourish afterward and [...] at the local level, in developing countries, they just need money to meet these GBF targets and goals”
As the biodiversity conversation grows and enters the mainstream sphere, private finance is beginning to play a bigger part. As it does, de Horde makes it clear that along with its interest and the presence of more funding partners, government collaboration and detailed investment data must grow at an equal speed and scale.