Side Event

Integrating Economics of Ecosystems and Biodiversity Into Strategies of the Financial Sector

Organizer
Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), KfW Bankengruppe

Date and Time
29 May 2008 18:15 - 19:45

Meeting
Ninth meeting of the Conference of the Parties to the Convention on Biological Diversity (COP 9)

In Spring 2007 Environment Ministers of the G8 Countries as well as of Brazil, China, India, Mexico and South Africa, and the European Commission laid out a set of goals for halting the loss of biodiversity: the “Potsdam Initiative - Biological Diversity 2010”. While goal No 1 draws on the “economic significance of the global loss of biological diversity” goal No 9 focuses on the responsibility of the financial sector regarding this value. The most prominent reason for the observed decline is that biodiversity and ecosystem services have no price. Consequently they are overused and destroyed and now are becoming scarce - and thus expensive. The study on the economic significance of biodiversity initiated by the Potsdam Initiative has started an accounting process, asking: “What are the costs of biodiversity loss compared to the costs of conservation?” The outcome will give important signals to emerging and future markets for ecosystem services as well as political implications to set up encouraging regulatory frameworks. The financial sector increasingly acknowledges that biodiversity and ecosystem services are fundamental to sustainable development. Adequate management of biodiversity risks is key to corporate responsibility. Thus financial institutes are keen to address how their clients can avoid or mitigate threats to biodiversity arising from their operations as well as how they can manage renewable natural resources in a sustainable way. However risk is just one side of the medal. Innovative financial products are currently designed to positively affect biodiversity. They will lead to new markets for biodiversity and ecosystem services. One promising approach is trading biodiversity offsets which will greatly benefit from the concept of ecosystem services accounting.