Finance & Investment Regeneration & Resilience

Landmark Report Sets Out 7 Steps for Embedding Nature, Equity Goals into Global Financial Activity

The Taskforce on Nature Markets asserts an unprecedented shift towards accurately pricing nature in global markets must occur to deliver on nature, climate and equity goals.

Published 1 year ago | About a 5 minute read

Image: Aldo Nestares

On Thursday, at the Amazon Summit in Belém, Brazil, the Taskforce on Nature Markets launched its Making Nature Markets Work recommendations report — detailing how an unprecedented shift towards pricing nature into the economy would make markets work more for people and the planet.

In the last five years, natural climate solutions have received $21 billion in investment; but “biodiversity” has been the hot-button topic for forward-looking businesses and governments since COP15 in December — since then, a host of reports, tools and frameworks have emerged that aim to help organizations understand, measure and address their impacts on the natural world.

But as the Taskforce on Nature Markets (an initiative of NatureFinance) points out, the window to pivot the economy away from the unsustainable overuse of nature is closing — so, moving at our usual snail’s pace of sea change will not be sufficient. Echoing the conclusions of the UK Government’s landmark review of The Economics of Biodiversity report in 2021, the Taskforce goes on to call for more robust, politically backed governance frameworks to evolve alongside markets to prevent greenwashing.

Making Nature Markets Work’s ambitious yet practical recommendations for policymakers, market actors and citizens alike include advancing traceability in the global food commodity markets; requiring traders to take nature and climate into account; ensuring carbon markets and emerging biodiversity-credit markets deliver fair prices to nature-rich countries, Indigenous Peoples and local communities; and mandating nature-crime-free value chains.

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As NatureFinance Managing Director Julie McCarthy points out: “Accurately and consistently pricing the value of nature in economic decision-making — with adequate governance — could incentivize more nature-positive markets; help mobilize billions of dollars to protect and restore nature; and fairly reward those on the frontline of stewarding it, including Indigenous Peoples and other local communities.”

Beyond the alarming loss of biodiverse ecosystems, inadequate governance to halt the economy's treatment of nature as a limitless, free resource has accelerated the climate crisis; intensified inequalities; and undermined both financial stability and food security.

The Taskforce points out that nature does not have the benefit of technology, which has supported the uptake of clean-energy solutions for combating climate change; nature market transformation will be reliant on policy incentives, regulation and new governance frameworks at the local, regional and international levels.

“Nature markets are a bridge to a total shift in our economic system,” said Sandrine Dixson, Chair of the European Commission’s Economic & Societal Impacts Group and Member of the Taskforce on Nature Markets. “We can’t stop at placing a value on nature. A real transition requires not only financing change through low-carbon and nature-based solutions but changing our financial and economic systems to truly service people, planet and prosperity at the same time.”

7 recommendations for embedding nature, equity goals into global financial activity

The recommendations recognize that any solution to the nature crisis, policy- or market-based, will not succeed without engaging nature’s stewards in formulating and executing effective solutions — in particular, Indigenous Peoples and local communities, who steward 80 percent of the natural world.

"It is fundamental that Indigenous Peoples are in the driving seat of designing and governing nature markets. Without nature there is no life on our planet nor a sustainable economy,” said Chief Almir Narayamoga Surui, Leader of Brazil’s Paiter Surui People and Member of the Taskforce on Nature Markets.

The Taskforce’s seven recommendations are built on best practice — so, while many are in motion, the report urges them to be accelerated in a way that catalyzes change at a global scale with urgency and decisiveness:

Align economic and financial architecture with an equitable, global nature economy: Align financial and monetary policies and regulations, and also trade and investment rules with the imperative of advancing an equitable, global nature economy.
Align policy of central banks and supervisors: Require central banks to ensure that actions by financial actors, markets and systems are aligned with relevant government and international policy commitments on nature and climate.
Align public finance with the needs of an equitable, global nature economy: Align public sector financial management with international nature commitments crystallized in the Global Biodiversity Framework.
Make food commodity markets accountable: As the world’s largest and most impactful nature market that facilitates the global trade of food, require policymakers and regulators to mandate full traceability and enhanced transparency about impacts.
Secure improved economic benefits for nature’s stewards: Create coalitions composed of nature-rich sovereign nations, Indigenous Peoples and local communities to deliver high-integrity nature services at agreed prices.
Address the harmful impacts of nature crimes: Reduce the incidence and impact of nature crimes — the third-largest source of illegal financial flows — by establishing a requirement for investors and financiers to demonstrate a nature-crime-free value chain.
Converge measures of the state of nature: Create a universal agreement to measure the overall state of nature and ensure the data is publicly available to avoid greenwashing.

While it will require radical changes to the way that businesses, markets and economies function, the Taskforce’s recommendations can deliver more equitable, nature-positive markets that support the transition to a post-carbon economy.