Finance Forum, UN Convention on Biodiversity – COP 17

biodiversity KPI focused on the country's commitment to deliver 30 by 30 across its coastal areas. That is a very, very material transaction that I would challenge any government to think about. Investors are there. They love the idea of a sustainability linked instrument where the KPIs are measurable, deliverable, tangible, will be tracked, will be reported on, and the cost of capital will be tied to success or missing those KPIs. We have now two large sovereign initiatives back-to-back. Why not 10? Why not every country who wants to focus on biodiversity to think about a structure like that? And then moving into the corporate sector, again, very excited to see large scale transactions. We've done two very recently in the Middle East, which have a blue or blue-green nexus. One 750, one a billion, very much focused on water. So water efficiency, protection against effluent. focused on desalination in a water-starved country, et cetera, direct use of proceeds transactions that got significant investor interest. So I'm leaving you with a hopeful message on the excitement that we're seeing in terms of some of the scaling. And by my math, I've seen numbers that suggest that nature finance is now about $100 billion a year and that it's grown somewhere between five- and 11-fold. Those are material, and that's exciting. Where do we have gaps? We need a little bit more of this plumbing infrastructure that Tony talked about, so we can coalesce around those success cases. We can coalesce around the types of use cases. I'll call it archetypes. So if we're focused on coral reefs, what is the most material thing that a company or a sovereign can do to focus on coral reefs? If it's another part of nature, what is the archetype that we can say is the most material thing? That is what investors are looking for. That's what I can underwrite. And if we can kind of collectively agree on those, then let's get them into the taxonomy. Let's get them into the frameworks and the standards. And then I think we'll start to see even more acceleration of finance to scale.

Great. Thank you, Moïsa. And I have to say UNEP FI is very concerned as well about the definition and the tracking of nature finance data. So we are trying to work to update the UNEP State of Finance for Nature with the latest data, working with the Climate Policy Initiative. We also track with the Finance for Biodiversity Foundation and our own membership nature finance issuances. And we do see that this is a really active space, so the data needs to be catching up to get that message out into the public domain, and echoing also what Ampaw said. I want to come back to you in a couple of minutes, Marisa, about what you need from the policy landscape as a commercial bank. But first of all, I want to come back to Martin. So we've heard from several of the speakers here that there's a lot of appetite, and I have to say also from large real economy corporates and large international financial institutions, to have more mandatory disclosure to bring that floor up. I was wondering from your perspective as the Governor of the Central Bank of Armenia, is that the message that you're hearing from the Armenian economy and businesses? And how do you balance out the expectation of disclosure and your formal supervisory expectations without restricting capital flow to key sectors? So how can you handle that as a central bank?

I think, I wish we were at the same level of maturity as the great financial organizations of the world here in this country. But I think at this point, we don't see kind of a direct push from the industry to do things from the central bank perspective, so to set the rules and all these things. So in that sense, I think what we're doing, we're trying to pivot the entire process, and then we feel that there is certain myopic tendencies within the banking sector of Armenia. That's why we're kind of trying to lead the process at this stage. What we have done so far, our board of the central bank in 2023, we adopted something called National Sustainable Finance Roadmap. And then within several years, we also created this risk grader and all the things, so we talk about hazards that could happen to natural catastrophes and some other stuff, giving them a lot of info to think about it. But everything so far which has been done, has been done on voluntarily basis. So we are trying to give them info at hand to make decisions by themselves, but I'm not sure that that is the sustainable way forward. So from our perspective, it will be kind of complement it or substantiate it with something compulsory of a nature. So nudging could work, but I feel that at one point we need to make a rough decision on introducing certain regulations that banks would follow. So that is kind of in a nutshell. Regarding the second part of your question, whether it would restrict the credit flow to the economy. I think that it might, but at the same time, we need to clearly understand that if we stand still and do nothing, that would lead to a more disastrous outcomes. So in that sense, as every decision that is made at the central bank level, we need to contemplate several scenarios, and then we need to bring the balance to our decision. What if we are wrong? What if we are right? And then many, many instances have proved us that doing scenario type of approach helps us in our monetary policy making, in our financial stability policies and frameworks. So I think in this sense, we should be giving them minimal viable standards which are imposed and let the best one win in terms of being proactive. But the rest should follow the very strict rules, I believe, in a couple of years or so.

And just sticking with you, have you had any lessons or experiences from Armenia in aligning with international networks or standards? Are you receiving any benefits from aligning with the international standards landscape?

Yeah, I think Central Bank itself is trying to align with international best standards. And then we do have some sister organizations which are providing credit. And in those organizations, we have put very strict rules in place regarding the disclosures and everything that should be done in terms of bond issuance and all those things. But at the same time, we're trying to kind of pivot and show the way for the others that if we follow the rules, then they should follow the suit as well.

Thank you. And Marisa, I want to come back to you, and we only have five minutes left. So I really want to highlight at the end, we know that private capital can move quickly. Yesterday in the Business and Biodiversity Forum, I said it's caffeinated. And what do you really need as a commercial bank from the policy landscape? And you work across many jurisdictions at Standard Chartered. What do you really need to be in place from policy to unleash the power, the speed, and the scale of private capital for this issue.

So it is a common set of standards and frameworks, I think, is the biggest ask in interoperability, because that way we can go across jurisdictions and have the same communication, same language. So that would be the overarching ask that I would suggest. As we think about perhaps Addressing Martin 's comments about how to ease into a nudge to a compliance framework, if we look at the evolution from TCFD, this is our, you know, brown versus green disclosures. It started with all of us in a room saying, it can't be done. We don't have the data. This was way back when, when we had no emissions data. It can't be done, can't be done, can't be done. But what did we do? We said, we're going to get started. We aren't going to have it all be perfect on day one, but let us get started. And the regulator, the regulatory environment behind that said, we're telling you, this is where we're headed. We're giving you the nudge. We're telling you it's coming. We want you to get started. Then we move from just a voluntary, truly voluntary exercise where everyone's trying to coalesce around something common, to comply or explain. That is a much firmer nudge. You must tell us why you're not doing it if you're not doing it. And then ultimately, you get to mandatory. And I think if we think about that path that That is a way to ease into something that I think can be absorbed by those who are just beginning the journey. The other thing I would ask of the central banking community, I'm going to be quite blunt, is that there is a lot of power in capital policy around banks. RWA, risk-weighted assets that you must hold aside for your financing. There is a very, very effective tool that exists today in infrastructure finance within the EU, an infrastructure weighting. So you have a reduction in the capital you have to set aside for investing in infrastructure. If we call nature infrastructure, why couldn't we put nature into that weighting process? Simple job. Can I tell you how quickly the tab would turn on? Because all of a sudden, it would be very cost effective. You'd meet your return homes as a bank in order to be investing in nature. So that is maybe something that we should be putting on the table in addition to the subsidy redirection and some of these other tools that we could use very quickly to accelerate.

Thank you so much, Marisa. And amongst the important standards and the plumbing that Tony discussed, I think one that has been under understood or is not as well known is the IPSASB 51 standard on natural assets. So this comes into effect from 2028, and it means that public institutions can put the replacement cost of natural capital onto their balance sheet. So if they steward land, which has pollination services, water filtration services, they can put that replacement cost on their balance sheet, which starts to also create incentives to reinvest there. And I believe it is Kenya that came forward as the first country to bring forward mandatory implementation in their public institutions. And picking up on what Tony said, you know, there is a huge range of now very strong and interoperable standards that are coming on board. And we're starting to get to the point where that plumbing is more or less there, and we can really have a hockey stick action between now and the next COP, wherever that may be. We look forward to finding out. So, as some of you know, I live in Switzerland, and Switzerland is famous for timekeeping. So I want to make sure that we wrap up this session on time precisely. Very briefly, some of the highlights here is that we are talking about different numbers. We need a lot more work on defining and tracking nature finance, otherwise we're speaking at cross purposes on whether we're on track, where, and how much. So this is something I hope we can bring to the next COP and all of us who are producing different data. We also need better incentives for the disclosure of private data. It is by nature private, and that's the one that we have uncertainty. We have better certainty over public data. Lastly, since Hinnu raised it, but we don't have an Indigenous voice on this panel, is it's not only the quantity of flows, but actually where they reach in the world, and are they creating incentives for those who live with the frontline risks of living with nature. And I have to say, in the preparation for the COP, I was invited by Indigenous groups over a weekend to a webinar, and I thought, nobody is going to come who wants to dial into a webinar on the weekend. And I was humbled by the huge number who dialed in, because it's not a work day issue. It's a life issue for those groups. So we really need to reorient the way that we think of this. This is not only the numbers and the policies, but these are life and death issues for many people who live on the front line of environmental degradation and bear the risks. of stewarding biodiversity that we all benefit from. So I'll leave it there for panel one, and thank you really to an exceptional group of panelists here. And we welcome you all, if you have not read the report card, "From Cali to Yerevan: Is the Financial System on Track?" It gives headlines that are aimed at CBD parties to understand the relevance of the financial system to achieving the goals and targets overall. Thank you very much.

Thank you very much, Jessica. And while we get ready, I will invite our facilitator for the next session, Andrew Dutch from WWF. And I will also call to the head of the table Mr. Chang, Vice President of Planet for World Bank Group, Mr. Saputra, Vice President of Sectors and Things for the Asian Development Bank, Mrs. Cassie Flynn, Director of UNDP Planet Hub, and Mr. Jan Erik Sors, CEO of SORBrand, and Mr. Jan Marin, Secretary General for NGFS. Hello. Hi. Yeah, we're going to put the name tables down.

Name tags?

Yeah, great. Okay, so as we transition to the next panel, I will invite everybody to take a seat, or if you want to continue the conversations, please take them outside so we can keep the flow. All right, Andrew, the floor is yours.

All right, thank you, and good morning. As we get started, for my panelists, I have two housekeeping things from Johan. One is, we're going to try and stay on time, so keep the answers somewhat short. And second, please be sure to speak close to the microphone. Before we get started, just for some framing comments, for those of you who listened to the last session, I think we're going to be building on a common theme here today, which is about acceleration. So back in 2020, I was part of the team that wrote the Paulson report that first quantified the biodiversity finance gap at about $700 billion. We just released a new update drawing on and looking at numbers that have come from UNEP, from OECD, and Bloomberg. The good news is there's more money flowing for biodiversity right now. The bad news is the gap has actually gotten bigger because the negative spending and harmful subsidies has gotten worse. But we're going to focus on the good news here, on the increase in public and private funding. The biggest increases that we've seen over the last six years in funding for biodiversity on a percentage basis has been funding from the private sector. Which is really encouraging. And I think that shows, again, from our previous panel, some of the effect of the plumbing. We had a really difficult time quantifying private sector flows for biodiversity in 2020. It's gotten a lot easier now because we're seeing a lot of the accounting systems in place. Companies are keeping track. Investors are asking. So we're making a lot of progress there. So as I said, we're going to focus on Acceleration. We've got representatives of public capital, concessional capital, private capital, and regulators at the table here. We know the direction of travel. We know what works. We're not moving fast enough. So again, the whole theme we're going to be focused on here is, how do we acknowledge what works, build on it, remove barriers, and accelerate along the path that we know works? Because we've only got four years to get to those 2030 targets. And then to get to ultimate sustainability by the CBD target of 2050, we've got a long way to go. So let me start with Guangze Chen, Vice President of Planet from the World Bank. So it's one of the largest public sector capital providers in this space. Why is the World Bank investing in nature? How do you see nature as a driver of growth? And I guess I could be a little cheeky about it. Your position used to be the Vice President of Sustainable Development. It's now the Vice President of Planet. What does that change mean in terms of the World Bank's investment?

Thank you. Thank you, Andrew. Thank you. And it's great to be here. So to respond to your first question, I think it's very in line with the topic we talk about. We call it planet because it's about natures. It's about how we can sustain an ecosystem that is basis for growth, for development, for humanities. We're talking about the air we breathe, the water we drink, the soil that grows the food that we need to eat. I think this is a whole ecosystem that we want to sustain. We call it planet simply as a word, simply to bring all these things together. So the question then, you said that why we focus on nature? As you know, in the World Bank Group, we put the jobs at the core of our development agenda. We talk about poverty reduction, shared prosperity, and a livable planet. But ultimately, we want to be able to sustain growth, and jobs is at the core of that. And then we talk about three pillars for sustaining that job agenda. The first, and this is infrastructure, the policy regulation, and then financing. And it's in the infrastructure part, we position the nature. We can see that nature is a foundational part of the infrastructure, just like energy, transport, we call it physical infrastructure normally, or human infrastructure like health, education, social protections. And we see jobs as the core of development agenda, and because this is how the, so worldwide, we can all relate it to this particular agenda. At World Bank Group, we're proud to also share with the group that over the last year, we have invested roughly about close to $9 billion in major finance. I know the definition is, as a previous session talk about it, but I think this is along the board definition of the nature of financing, is about finance for restoring ecosystems, landscape restoration, waste management, and energy transition, all these areas. And this is how we want to position ourselves. And now, when you ask, why do we see this nature agenda in supporting the development? Again, the linkage is really on the jobs. And then, along with that, we also look at the other sort of range of what we call a corporate mission that we recently announced, right? From Water Forward to EcoConnect. Again, these are from different sector perspectives, again, in addressing the nature sort of finance agenda. We focus on AgriConnect because this is where the last number of people depends on, but also the whole world population depends on in terms of sustaining the agriculture sector. And then we want to focus on how to move smallholder agriculture. agriculture producer into a service producer, while addressing the food security at the same time, but also making sure that the agriculture system will continue to grow, but at the same time, sustainably. And the water for what we're talking about, water for food, water for planet, and water for the ecosystem that we, and we all know how the water system is under strain, and that's how we want to organize ourselves in addressing the nature ecosystem agenda moving forward.

So a quick follow-up question. When you talk about nature as infrastructure, how is nature showing up in your country dialogues with your client countries?

In our dialogue with the client countries, of course, it's governed by what we call a country partnership framework, for which we, this preparation of this country partnership framework, of course, reflecting the country's priorities, and that is also informed by a number of these, what we call country diagnostics, from job to growth, to country development and climate studies, CDR that you have heard about, and we also The other areas depends on that particular country. For example, here in Armenia, that is framing on the fact that they want to recover using this ecosystem as the basis for growth. So those are the basis for our dialogue with them in terms of framing our country development framework. under which we bring in our finance. The finance is not just the public finance part, but also the IFC, the private sector arm, the MIGA. Increasingly, we really bring the whole World Bank Group together to create that kind of catalytic role that we can crowd in much better, much larger scale finance. Last fiscal year alone, we set a record at World Bank Group. We mobilized more than $100 billion of private capital. Why we focus on that? Because no matter how we look at the public balance sheet, MDB, public financial institution, or our capital basis combined will never be sufficient to meet the need of all the nature financing and other development priorities. So what is important for us is really to using our balance sheet, but as to bring their catalytic role and leverage the other financing. That's how we want to bring the good together.

Next, I want to turn to Wimpy Subudhro, Vice President of the Asian Development Bank. So the Asian Development Bank right now is chairing the Nature Heads working group across all the MDBs. That group has recently produced a taxonomy for the MDBs to track nature finance and developed this accounting methodology so you can track and report on nature finance. Guangzhi just said the World Bank has invested about $9 billion. So we have a way to keep count now. How is the taxonomy helping? And how is that helping drive both public and private finance in the nature space?

Thank you, Andrew, for the questions. Thanks for having me. Let me start with the context. After the COP16 in Cali, we see that the conversation of this nature finance has matured considerably. We see there are two ways in understanding, because in MDB perspective, we already jointly agreed about how to track the nature of finance. And in fact, today, we would like to publish our joint report of MDBs in the positive response and tracking nature of finance. So this is, I think, good progress in this case. And following the question, actually, there are two strategies from ADB. First, we try to embed into our corporate result framework, meaning that on our KPIs, key indicators. So it is not easy because in ADB, we have around 150, 200 projects a year, $30 billion portfolio. We try to give an access what would be the pipeline connect to nature finance and how to measure it. In MD perspective, we see that we should differentiate, as you mentioned, from the so-called environmental safeguards. So we do not count, let's say, vegetation after construction. So differentiating between safeguard and nature finance is very critical. And we already agreed in this case. We tried to deliver the taxonomy applied into our key result framework and also investable pipeline. The second thing I would actually very much relate to the clients. As you know, this capacity of the client, we should also to see and also to develop, right? At the same time, we try to bring the upstream works, the midstream, and the downstream, to our investable project, investable pipeline, so that client also could participate at the beginning of the projects, not the financing stage, so that we can identify which the project activities constitute the support nature finance, which do not. At the same time, also, giving some capacity building to the clients, understanding to measure, to define, also to finance. And there is one good example in China. There's Fujian coastal resilience projects, we fund around $150 million as a beginning of this nature finance and how to track this at the same time. You mentioned about co-investor. Indeed, there's common language. As you know, ADB is Nature Has Now, try to expedite the conversation on this, and we are very proud to share this MDB Nature Hands. So many co-financiers already talk with us, and they understand the language. So understanding and aligning the language, the taxonomy into our investable pipeline, also as a strategy to financing, is very important. And for this, we are seeing very much growing the appetite of the co-financing, and we see that should be much more higher in the future.

So I want to ask a follow-up question about how this is playing out in practice. So ADB has established the Nature Solutions Finance Hub. and set aside several billion dollars of capital to invest in nature-based solutions. This whole room is all about trying to finance nature-based solutions. What are you finding in terms of building the pipeline and being able to invest in it?

Our Nature Solution Finance Hub actually would like to have around $5 billion by 2030 to become a catalyst. And in fact, it is also included $750 million from private capital. The binding constraint actually is not about the capital. the investment-ready projects. So we see the constraint from the preparations, the project preparation, the bankable projects, as well as to scale up the project to absorb that capital. So this kind of the concept already identified, and we try to move on how to tackle this problem. But until today, around two years after implementation, we already found around 1 billion project in pipeline. So it's good progress, so 20% already. And our outlook, it says by 2030, we are on track. So in terms of the nature solution finance hub, we also develop what we call it nature bonds incubator. So there are some projects now being classified or these. We try to connect with the clients, we try to identify. And I think some of the PRC, India, Mongolia, and also some of the Southeast Asian countries very much keen to develop this kind of nature solution finance hub support. So in fact, actually, Anu, The platform is there. The capacity is not met. The platform will try to give them some capacity, investment ready, bankable, and scalable project. Everything is on track so far.

I'm going to hold onto that message, that the money is there, the appetite is there, we need the project pipeline. So Cassie, Cassie Flynn with UNDP. Right, so UNDP has the BioFin program and is supporting some 90 countries around the world with developing national biodiversity finance plans. How is that going, and what are we learning? And hint, I'm going to get to this question about building that pipeline.

Thank you so much. It's such a pleasure to be here. And I think that, and building off of what was just said, I think, in the previous panels, I think something that is increasingly clear is that even if we have the volumes of finance, it doesn't flow in a vacuum. That it is the national context, it is the national conversations that are helping to provide an environment, that enabling environment, for that levels of finance to flow. And I think that, in particular, as we talk about this being a COP of action, an era of implementation, how we move to concrete action on the ground, it is that environment in which that finance flows that matters more than ever. And this is where BioPharm comes in, and this is where our nature pledge comes in, and this is where being able to have the right policies in place, the right institutional frameworks, the right capacities, the right stakeholder engagement to be able to get those systems right. And something with, and you know, because you. With BioFin, we're talking about biodiversity plans. We're talking about solutions to be able to mobilize and align financial flows. And this has unlocked 3.5 billion for nature across the countries that we've worked in. But something that has been also remarkable about this is that it has also unlocked conversations about the environment in which that finance flows. And so, for example, one thing that in the previous panel talking about subsidies, talking about how you can start to change the way that finance flows, that is a very political conversation that is very much rooted in a national dialogue. And so one thing that BioFin has really tried to do is try to help unlock that conversation and be thinking about it in new ways. How do you have assessments about how finance is flowing? And we've started to see when you get that dialogue right, when you get that institutional engagement, those policies right, then the money does start to flow in new and increasing ways.

OK, so follow-up question. How do we bridge this gap between what the countries, like the majority of funding is at the national level in domestic resource mobilization? We know that there's still a gap in international financing flows. You've got two MDB vice presidents here who are saying they've got the capital. What do we need to do to bridge the gap between what ministries of environment are developing around these national biodiversity finance plans, the tools and mechanisms that the BioFin program is identifying at the national level? How do we then tee up the projects at scale that these guys have the capital to meet? And, and this is the really tricky part, prioritize those nature-based investments at the national level, because you're competing against the health sector, and gender equality, and the education sector, and other infrastructure. How do we tee these up at scale and make them the things that rise to the top of the level of the ministers of environment, ministers of planning, that sit down and talk with the World Bank or the Asian Development Bank?

And I think you're tapping into something that is so important here about What does it actually mean to scale? And how do you have countries being able to have a pipeline that is workable and can access the levels of financing that many of the institutions here provide? And something that I think is is really important about this, and this is why I think these processes like COPs are so important, is because you have a national conversation going on about an NBSAP. You have a national conversation going on about what are the priorities that a country is putting forward in terms of their biodiversity strategic action plans. And you can take that cue and that process nationally to then start to have an inter-ministerial discussion. Because what you said about the competition between ministries, how do you turn this into a value add and not a competition? How do you turn this into, it's a conversation about jobs, it's about prosperity, it's about development, rather than just being about nature? And this is what BioFin, UNP's Nature Pledge, this is certainly what we're trying to do.

So next, we're going to turn to the private sector. So Jan-Erik Sogstad from Storebrand. What did the transition pathways look like in some of the key sectors in the real economy? And what do we need to see happen in terms of what the investors can demand of their clients or of the countries we're investing in? And I'm going to put this in a very specific context, because I work a lot on the Tropical Forest Forever facility. which is hopefully going to have a lot of money to invest. And they've got a set of exclusions saying they're not going to invest in fossil fuels. That's pretty easy to construct an investment portfolio that ignores that. They also, because this is about stopping deforestation, don't want to invest in companies that are driving deforestation. Turns out, it's actually kind of hard to figure out what that looks like, and not just how do you exclude companies that are investing in-- or that are driving deforestation. But how do you select the companies that are actually trying to-- might have deforestation in their supply chain, but are trying to transition to get rid of it? Because those are the ones you want to be directing transition finance to. So what do transition pathways actually look like? And as an asset manager, how are you telling where to put your money that's going to do the right things and ensure that you're still getting a return for your shareholders, your asset owners?

Well, thank you. I believe that was more than one question. I'll try to speak to it. So first of all, I think it's so important that we come together with the different perspectives here. But to start with transition pathways and transition plans. I mean, you mentioned economic growth, and we also have to put nature into that context. I mean, we want to protect nature because nature what it is, but we also want to protect nature because of the services it provides. And there is no conflict between these goals. It's sort of speaking to how we manage the 30% protection, but also how we improve the flow of the 70% in the economy. And then we need economic growth to motivate and engage companies, and also to support investor and investor returns. So the question is, how can we then move from commitments to a credible transition supporting that growth. And what are we then looking for in the transition plan? First of all, naturally, clear targets. Secondly, I would say, a board level accountability. We need to see the concrete steps in this plan. how the capital expenditure is then aligned with that plan, and of course, eventually some evidence of progress. So that's in a nutshell what I would expect from a transition plan, whether it's from a corporate or even as important, from a government. In food and agriculture, it would be reducing, as you alluded to, deforestation, how you convert your supply chain. In mining, how do you actually avoid sensitive areas and improve your water management? So it's very tangible, very actionable. And it should be backed with capital. And that's the kind of companies we then typically would rather engage with as opposed to exclude.

So I'm going to ask you what's probably the most important but also difficult question that anyone on the panel is going to get, which is how do we go from A several hundred billion dollar a year green bond market. We just heard an SLB being issued by Thailand linked to KPIs in the biodiversity space. Chile and Uruguay have done it in the climate space. But when you look at institutional, you get the size of the global economy, it's in the 100 trillion range. You look at the size of assets under management of institutional investors, it's in the hundreds of trillions range. So we're still three orders of magnitude below the size of the money pool. if you will, in where the green bond market is. How do we get to scale? Or instead of going from how do we make green bonds scale to where we green the whole economy?

Well, thank you for an opportunity to address that key question. And you might use the terms, i mean, we need to move from sort of financing green to greening finance, to put it in a tabloid manner. So we need to move away from just funding blue bonds, green bonds, very more niche-oriented financial vehicles. Nothing wrong with them, but they're not going to turn the capital flows in 70% of the economy. For that, we really need to think more structurally. Maybe divided into three areas. First of all, in order to turn capital flows, of course we need insight. But we already have made significant progress in terms of understanding the dependencies, the impact corporates and governments have on nature. But we have to really shift it from a voluntary best practice It's the way of disclosure to, as also the previous panel highlighted, a mandatory and preferably a clear standard. So I think in the previous panel, about 83% of financial institutions want a mandatory And we also, on behalf of Finance for Biodiversity, which represents 27 trillion US dollars, set a call for a dedicated nature standard and hope that ISSB will build on the work done by TNFD in the same way they did on the TCFD. in order to create that standard. We really need that one. The second thing is, of course, corporate action. And I think what I just said about the transition plans, being clear, actionable, and credible. And we work hard as a financial community through Nature Action 100 or other engagement work to push for that. But let me come to the third element, which is really key, and that is the public sector, the governments. So, yes, they should push for, and I'm happy to sit next to also a central bank perspective. mandatory reporting, as I mentioned, but also actions by central banks supporting and maybe creating incentives from a financial perspective for nature positive or better risk management of nature risks. So that's one area. I think even more important is the actions on Target 18. So, we just also, on behalf of Business for Nature and Finance for Biodiversity, sent a letter just ahead of here highlighting what we call the trillion dollar opportunity. So it's an open letter highlighting the fact that currently there is 2.6 trillion of public spending, or close to two and a half percent of global GDP, that contributes to the depletion of vital natural resources. So, to be able to shift parts of that out of the negative depletion into supporting positive, leveling the playing field for corporates and us as investors to actually let the money flow in a nature-positive way. Creating the environment to let the market work, that will address your key question.

You're suggesting there should be policy coherence among governments and that their fiscal policy should be aligned to nature positive.

Surprise, surprise. Surprise, surprise.

Hopefully we'll get there soon. And so next, Jan Martin from Secretary General of NGFS and Banque de France. So you work in the government or regulatory space. So we're going to put you on the hook to make sure that government policies are actually aligned. But I want to start with what you've learned about how to identify and manage risks. And I'll go back to the framework that NGFS put out a few years ago. Which I think is still the best framework out there for understanding nature risk and how it translates into economic risk and financial risk. So now we've got a few years worth of experience in understanding those risks. What are we learning about how to first identify them and then how to manage them?

So central banks are not governments, and they are independent. So by definition, we are definitely not the ones to be interrogated about that. For the NGFS, maybe a word for the audience, because not everyone may be familiar with the organization. This is an organization that has been created nine years ago with 10 central banks, and we are now 155 around the world on all continents, pulling resources together to work on those nature and climate-related risks. within the remit of our mandates. And I want to emphasize that element very clearly. Central banks and supervisors remain in, when they are working on these topics, they really focus on fulfilling their mandate, and they don't go beyond. In the NGFS has worked a lot on this topic because we have understood from the beginning that these risks There are more vectors of risks, actually, than risks in themselves. They are enhancing the risks that the financial system is supporting. And they need we need the financial system to actually acknowledge the risks that they are facing to the full extent by not taking those trends into action, the change. the changes that we observe in climate and nature, we may underestimate it very widely, actually, the financial risk that they are taking, counterparty risk, market risk, liquidity risk, all those traditional risks that they are encountering. So that's what we are focused on, trying to understand the relationship between what climate and nature scientists were saying, and what were the consequences for economics and for the financial system. By doing so, our goal is for banks and financial institutions in general to fully understand and manage the risks that they are taking. I would say that it's basically the first responsibility of the supervisors to actually make sure that they are committed to these risks and that they are understanding correctly the exposure and the potential consequences if the risks that we are discussing are materializing. That doesn't mean that we want the financial system to withdraw from funding that sector or that type of activities, not at all. It's quite the opposite, actually. We need the financial system to perform its service to the real economy at all times, which means that they need to understand exactly what they are doing. And the uncertainties that are surrounding climate and nature-related risks are no excuse for not taking those risks into account. There are data gaps. There are limitations in our ability to project what is to come and what will be the future in which their business model will be developing. All the more reason for them to actually understand where they are going, the level of uncertainty that they can undergo, and to adapt their business model, their governance, their strategy to these new features. So this is what we work on. We are trying to provide the tools for the supervisors to get into those activities. And in particular, we have published last September the guide for supervisors. It's really available on our website for everyone to consult, where we have integrated nature-related risk into the supervisory practices, learning from our peers, learning from the experience of supervisors that have already implemented policies all around the world, and trying to, with this sharing of experience, scale up the capacity to make those risks more manageable.

So if I can paraphrase a little bit in language that will make sense to a CBD audience, lack of full information is not an excuse for non-action. We talk about the precautionary approach in the CBD world. That said, data on nature has improved quite a bit in the last few years. And yet we know we still need more to improve decision making. So when you think about-- and nature is much harder than climate, because you can focus on one variable, like a ton of CO2, and that's fungible. When you're looking at nature and natural assets, they're not geographically fungible in the same way. But as you're thinking about working with the institutions you supervise and providing guidance to help them understand risk, What more and better data and information do we need? If you've got a bunch of scientists in the building, what do we need them to produce in a timely way to help you inform others how to better identify and manage those risks?

So yeah, data has been progressing, and we have better data now that we did five years ago. Nonetheless, we are still missing a lot, we would say. But it's not that much about collecting data, making the data that we need for informing the investors, the banks, the supervisors, the policymakers in the best way. One difficulty that we have with this kind of data is that it's not a static assessment that we need to do. It's projecting ourselves in the future and understanding the trends that are currently happening. So for that, we need modelization. We need to be able to actually understand what the risks are at the moment, but what they will be in the future. It's not about making predictions. It's about making scenarios, plausible futures against which we can benchmark our activities and understand that if indeed the future looks like the disruptions of the ecosystem you are operating in, what is your response? How do you prepare for that? How do you prevent this risk to be magnified or to occur? All those policies need to be grounded in the understanding of the activities and their impact on nature. And for that, we need more tools. We are working on that. We have indeed published a conceptual framework in 2024 for central banks to be able to understand In qualitatively, I would say how the transmission channels operate, how you have contagion from one ecosystem to another, from one economy to another. And all this is the groundwork that we needed before getting a little more concrete, I would say, when it comes to scenario. And we are launching at the beginning of next year. let's say, competition between academics to do the ground work that we need from scenarios. How nature scientists need to speak with economists so we have a common language, and we are able to understand how the variables or the science of nature is actually transformed into economic variables and financial variables that we can use in our modeling. We have also to be careful about one thing. Our models, traditional models, tend to smooth everything to go back to the equilibrium. And therefore, they have this quality that may underestimate the risk to a large extent. So this is also something that we need to correct and to make sure that we are taking into account when we are designing those. We think we are about three to four years away from being able to publish nature-related scenarios. The work has started within the NGFS. We have published the first document on scenario analysis related to nature during spring. It's a major package. It's looking into data, supervision, and scenario analysis. This is the first step. There will be more. But it's nascent. It's definitely not-- we are at the frontier of knowledge there, and we will try to push the envelope as much as we can.

Thanks. I've been spending some time with the Coalition of Finance Ministers for Climate Action, and they're like half a step behind where NGFS is. So if you think we're three to four years away from getting those scenarios, let's press the accelerator. I'll come back to you in a minute. But Jan-Erik, you wanted to comment. And we're a little bit ahead of schedule. Pleasantly surprised that you all have been very good about being efficient with your time, so I'll be able to do a few more questions and comments. So please, feel free to jump in. Jan-Erik.

Thank you. I just wanted to comment, coming back to this expectations to governments, and let me rephrase other institutions. So first, of course, it's really to enforce that standardization, reporting, getting structured data. The second is the work that typically the central banks can do in order to push risk management, appropriate risk management, putting this on the agenda also for the ministries of finance and the CFOs of corporates, and of course, the CEOs of investment institutions. But let's not forget the third element in this space, which is really, as I said, ensuring that we have a playing field that is supporting nature-positive investing, that will remove the negative subsidies and support of activities that have a negative effect on nature and encourage them. So, you know, we need the combination of those three. And Sometimes there is a tendency to maybe over focus on risk management, and I think it's sort of bringing both the positive, but also the risk perspective together.

So we don't have any governments on the panel, but a few of you are government adjacent. So Cassie, you wanted to weigh in? Did you get triggered on this? issue of subsidies and how we help governments. That's one of the unmet targets, was governments are supposed to undertake assessments of their harmful subsidies and incentives, and then start reforming them.

There's a couple of elements that I wanted to chime in and build on this. And I think that also as we're having these conversations about the right data to have and the right systems, there's also an element here we have to remember about embedding these so these can be over the long haul. These signals have to be over long periods of time to be able to give the stability for those investments to flow. And I think a lot of us paid attention to election results this morning in Brazil. We've got a few other major elections coming along. And I think that, again, sort of thinking about this in the context of being able to solidify these systems as much as possible so we're not seeing sort of an ebb and flow that can undermine what what has to happen for a lot of the stakeholders around the table to be able to commit to this and know that they can make decisions that aren't necessarily going to have to change in a short amount of time?

Happy to jump in on this subsidy issue, I guess. Take the example of agriculture. We all know that worldwide, developed country, developing country, huge amount of subsidies in the sector. It's pretty difficult trying to eliminate or reduce that subsidy. It's politically very, very difficult. So our advocacy on this one is not about reducing subsidy per se, but it's about repurposing the policy, recognizing that the agriculture subsidy, if you don't target it properly, could actually do harm rather than good. Because, for example, in some countries, the subsidy will actually encourage utilization of fertilizer that may not be targeted. And they are wasteful, and they may not be actually harmful to the soil qualities. So much of our work on this area is working with the government to really develop, of course, providing evidence to see how we can target those subsidy into much more in terms of impact on the production rather than typically targeting on input, agriculture input. So that's one example of the work that we do. But maybe while I still have the mic, maybe just to reemphasize the point of our nature and jobs, a couple of things. One is the fact that in sectors that depend heavily on nature. Talk about agriculture, talk about ecotourism, talk about fishery. These are also the sector that has really large number of jobs opportunities. So kind of preserving the nature, restoring the ecosystem, is not just for nature per se, but it's also for creating more opportunity for sustaining jobs, because without job growth, all country, developed or developing country alike, is not going to sustain that particular focus. So our work is really surrounding on this particular agenda and bringing all elements of tools in terms of policy, advice, investments, and then, of course, the private sector arm of the World Bank Group for that. Maybe just one quick example that I can share the group with, basically, let's talk about water in Uzbekistan. is a country that water scarcity is really constrained. But at the same time, we know that this is a country also has a very heavy agriculture sector, which consume 90%, 95% of the fresh water. So how do we bring the element together? One is the policy-based operation that actually help the country develop a water code that really prioritize the water usage. recognizing the scarcity of that. And then complement that with investment operation on focus on what basically efficiency on irrigation system, at the same time ensure water supply and sanitation. And coupled with that, in fact, using a tool to mobilize private capital for that investment.

Yeah, actually, two points from my side. I fully agree with other colleagues have said. So the real challenge is when, in many conversations we have with

Minister, the Environment Minister, actually, how to relate how the science shows, how the policymaker thinks, and how the business does. And we talk to the Finance Minister, they will ask you three things. What is the cost borrowing of nature? Is this creating jobs or is this revenue generating sector? Because if you talk about very important sector, defense is important. Water important, social protection important. So we have to convince the finance minister this is investment, revenue generating sector so that they can use 2% until 5% fiscal space focusing on nature. And then bring the MDBs together, reduce the risk, creating project readiness and investment pipelines. And we also, when you talk about co-financing and Bank of France know very well, they will talk about taxonomy, how to align. What is the opportunities and risk from the nature into our financial system? And we should also talk about the risk management you mentioned about this, how to measure, how to calculate, how to expedite, how to signal confidence to investors. And we need also help from development partners, colleagues, in this case, to develop kind of the convening power so that nature, we talk about nature investment, which is everyone knows about that, but how to create more very, very robust pipeline, creating jobs, revenue, sector so that everybody can put together to develop this kind of natural environment. Thank you.

Do you want to come in? So I think this is one of the challenges that we have in this space, is, and if I go back to some of Jan's comments earlier, that we're doing a pretty good job now of identifying risks. The flip side of that is then to identify opportunities, right? And we in the conservation environment world are good at identifying the variables around ecosystem services. So this project will yield so many tons of carbon, so much water flow, so much societal benefit, but we need to go the next step of those units into things that finance ministers care about in terms of fiscal policy. What does this do for job creation, what does it do for revenue, what does it do for the tax base? What risks does it mitigate, and how do we quantify that? So the next step would be from the risk identification to the investment opportunity identification. That seems to be where we need to be going. And I'm just curious, do you have any thoughts on that, and the work that the NGFS is doing in terms of both the risk identification, but how we go from risk to opportunity to drive investment? Because that's how we're going to start transitioning economies.

Central banks focus on risks, let's say that first. It's on a mandate, and for maintaining financial stability, we need indeed the risks to be under control. That doesn't mean that we don't want opportunities to emerge or for the financial institutions to seize them, but it's not our primary concern. That being said, when we are looking at the investment made by one financial institution, by definition, we are taking a holistic approach. We are looking not only at what they are doing in terms of risk at one moment in time, but what it means for their risk in the future. And of course, the investment that they do in some sectors may actually reduce the risks, may actually lead to opportunities, revenues. All this is taken into account when we do the assessment. But that being said, you mentioned the CFMCA. The Coalition of Finance Ministers is indeed a very important partner for us. We are working with them on a daily basis. But we are focusing on our own mandates. They do their own. And when I say that we are looking into the scenarios, we are doing this for creating the tools that supervisors and central banks need. But the needs of finance ministers may be a little different, and they may need also to invest. They're actually committed to do that in Brazil last year. They need to focus on their own topics, like what is the consequences of nature on public finances? What is the consequences for industrial policy? What is the consequences for competitiveness, for how you position your economy as a whole? and how you manage your own environment. Those are topics for governments and for financial ministers, not for the NGFS. We have to maintain our role. We have to sustain our responsibilities and be true to the mandate that we have been given.

Yeah, just to try to respond, because we need to sort of transform all this insight into what I always say, what does it mean? What is the financial materiality in this? What does it mean for long-term growth or wealth creation in a nation, for that matter? How do we clarify what You need to invest in order to capture the growth opportunities, but also, I would say, avoid loss of growth and mitigate vulnerability, because that's also the reality if we want to deal with this concern. And of course, for companies, this will help. them move from that target setting state to implementation. It will engage the CFOs. For financial institutions, it clearly, once we are able to identify the financial materiality, the whole debate of what fiduciary duty evaporates. But even more important, I think, It will help the policymakers set more clear nature regulation. It will help them establish a more consistent long-term policy signal. It will help them reform the incentives that encourage nature loss and level the playing field. So I think that sort of, when you think about data, it's really being able to connect it to growth, wealth, financial materiality. And the expectations for governments is really to level the playing field.

We have a couple of minutes left, so I'm going to make up a lightning round here. When you look at the Global Biodiversity Framework, the finance piece is in goal D, which ultimately is around basically greening the whole economy, right? The climate world had its And the Paris Agreement, this notion of aligning financial flows, the biodiversity process we did in Gold D, the Global Biodiversity Framework. And then we've got some specific targets on disclosure, on subsidy reform, and on positive finance mobilization, target 19. So just as lightning round, but go down the line and ask each one of you, where are you the most hopeful that we're going to see progress on any one of those around Mandatory disclosure around subsidy reform, around some form of positive financial flows? Where do you think we're going to see progress? If we're doing this again in two years, where are we going to be able to look back and say, that was significant progress since we met in Yerevan?

OK, I can give you the go. I would say, first of all, I think we want to see progress in all these areas, obviously. But if you ask me specifically to pick area, I do see in terms of financing, mobilization of financing, I think we have many models out there already. If, in fact, the next session in afternoon, we talk about this specifically, if you counting the number, we're talking about in the trillions already in terms of labor bonds. So there's a model that is already out there. The issue is about kind of making it even. Scaling. That go back to the question that my colleague mentioned earlier, that while you can mobilize the finance, but implementing those finance into projects and program, that's the challenge we face, including these countries. I mean, it is one of the conversation that we some investors in here, they said getting money is not that difficult, for example, on reforestation here, but it's getting the land. for doing that is actually very, very challenging. And that is not just in this country, in many other countries as well. So I say, yes, mobilizing financing is probably, I wouldn't call it easy, but it's probably we'll see substantial progress because money is out there. We're talking about trillions of dollars on different form of capital. They're looking for opportunity to flow into this type of investment, but at the same time, we have to be able to demonstrate all this investment all this financing can be turned into a program and project that impact on the ground.

Yes, right. Actually, this is not an easy question. So in many development conversations we had with clients, when ADB published its Nature for Development report, so at least 69 countries in Asia and the Pacific supported it. So they see the capacity is there. But I think how to increase the capacity much more, not only for the public policy perspective, the finance minister, environment minister, how to get together to be more concrete in the policy, the system, the financing, and feasible pipeline. So I think we should create more robust communications and collaboration with the government. The second thing actually is about the financing capacity. So there is one example, just to give you a sense. One dollar from international finance institutions put in ADB pipeline on nature, we co-finance become 21 times. So this kind of conversation, we also can give idea to the government, to development partners, to IFIs, so that This dollar is not about only the dollar or the grant, but how to multiply. Not only about creating nature projects, but how to multiply the project so that everybody can enjoy. And many governments already know the costly part of pushing back this kind of nature. The third one actually is really regarding the collaboration between development partners, the academia, MDBs, and also maybe the financial system. So far, I think taxonomy is good progress. But I think also risk management is the second part, has to be discussed more thoroughly, and what kind of opportunities to mention in the financial system and also investment pipeline in the country itself. So I'll stop here.

Cassie?

Thanks. I'm going to complement this. And there's a couple of things that come to mind. But the first is, i think that where we are, the conversation now on subsidies is an incredible leap from where we were even just a few years ago. And this is where with our BioFin program, we started talking about subsidies in the early days of it 10 years ago, and everyone said, don't touch it. This is the third rail. This is going to collapse everything. Don't touch it. And said, OK, well, what can we talk about? How can we move the needle? How can we do this? And to be able to start to talk about how you could be more efficient with how funds are flowing is a conversation that governments want to have and a conversation that you can have across ministries. Because you have, of course, as has been described, the Ministry of Finance versus some of these sectoral ministries, how do you bring everyone to the table? And we're starting to see real progress. And if I can give you an example, in Colombia, the National Agriculture Development Bank has tied biodiversity criteria into their loans that they provide to farmers. And so now you start to see some of these incentives, and it's across five commodities, and it's been 1.9 billion dollars. I mean, it's not small numbers. In Thailand, we have seen them start to take a rethink about how they are repurposing coastal infrastructure and realizing that maybe subsidies for that coastal infrastructure isn't the the most efficient way to go. And when you start to see this as a different type of conversation, different opportunities unlock. And I think when we get to this sort of risk and opportunity piece, this is where you start to see those overlap. And I think you start to see an acceleration that we need.

And Eric, what's your crystal ball say?

I do think we will see improved capital flows if we get progress on data and a more standardized set of reporting. Even more importantly, that we see stronger progress on transition plans. Move away from commitments to transition plans, whether we're talking about corporates, but even more so from governments. There is too little progress. The third element is an alignment of public policy with the transition we're asking companies and investors to finance. And we talked a lot about these subsidies, but they are part of that, of course, a very important part. And we are talking 2.6 trillion US dollars annually. And we as a financial community, and we will work even harder to try to collaborate and be more consistent in our encouragement and be not only acting as responsible owners, but also engaged in a coordinated way.

Jan, you already gave us a hint around nature risk scenario modeling being something coming down the pike. Anything else?

I think the main elements that we need are consistency, comparability, And as much as we can, we need to avoid fragmentation. Doesn't mean that the same policies need to be implemented everywhere. There are specificities in all economies that need to be addressed. But that being said, you talked about taxonomies, you talked about disclosures, we talked about transition planning. All these tools are very important to actually get where we want to be. Disclosure in particular are very important for the financial sector, because it's very difficult for a financial investor or for a bank to actually go one by one to each of its clients to get the data that they need or the information that they need to compute the risk to the best extent that they can. So all this needs to be in place. It's not currently the case yet. We need to make progress significantly in those fields. And the more we will have international cooperation, the more we'll be able to agree on the general direction of work, the more we'll be able to use consistent tools to address those, the most we will learn from front runners and actually use their experience to scale up the practice that they have identified as being the best ones. the better we'll be. And that's probably what we can wish for in the future, is that all those elements come together to actually produce the best environment possible for the policies to develop.

Thank you. So I want to take a minute to thank the panel. I'm not going to try and summarize all of it, but I'll just say a couple of key points. As I listen to the conversation that we've had here about the progress that we've made and the progress still yet to be made, at least four things really stand out to me. So one is building the pipeline of investable projects at a scale that matters, right? And particularly the work that UNDP and the banks are doing to work with governments to tee up the opportunities, because you say, the capital is there, we need places to invest it in. Two, the importance of mandatory disclosure. You say, setting a level playing field for the private sector, because that's where the real money is. And then third, the need for transition plans at a sectoral level. The climate world, as usual, is a little further ahead than the nature world, but we understand what transition planning looks like now and we can start moving in that direction. And lastly, the notion of significant nature risk modeling and how we link that to go from natural capital accounting to impacts in the real economy. So I'm going to leave it there and just say thank you all again. This has been a fascinating panel, and it actually leaves me optimistic that we're actually making progress, that we have a good sense of the direction of travel, and just need to step on the accelerator. So thank you all very much. Thank.

You. Thank you very much, Andrew. And so, panelists, we're going to have two-minute intersection between the two panels and transition. Keep the conversations, please. We kindly ask you to step outside of the room, and we're going to start with the next panel in one or two minutes. Thank you. So as we transition to the next panel, I kindly ask you to take the conversations outside as we move to the next panel. Thank you. Hello, hello. If I can ask, kindly ask you to please either take a seat or take the conversation outside, please, this group here. Hello, can you please either sit down or carry conversation outside? Thank you very much. Okay, last minute change. Our moderator will not be able to make it, so I will be stepping in on his behalf. I know traffic and moving around between meetings can take a little bit of time, so we want to keep everybody on schedule, and we will get started in the next couple of minutes. This conversation today ties to the party requirement to continue involving subnational governments, how can we continue talking with the other policy stakeholders in the financial sector. Cities play a very important role on how we continue mobilizing resources for nature. And then I'm very pleased and honored to be moderating the panel today with the mayor of Yerevan, Mr. Tigran Avinyan, and Mrs. Daniela Plaza Salderrega, president of the Santiago City Council. Thank you for coming, and thank you for this fireside chat. This will be a very brief conversation as a fireside chat. I don't want to hold you back from lunch, so I don't want to be responsible for that. And as we start right now, I just want to say Thank you to Mayor Teegren for welcoming us to your beautiful city. We're very, very, very pleased and very honored to be here. As I said in the beginning, my name is Johan Lopez. I'm the financial sector engagement lead for the Secretariat, and I lead the conversation with the financial sector, but also working closely with sub-national governments. And it happens to be that I'm from Cali, so I'm taking the Cali from Yerevan conversation, so there's a good way. Just to kick us off, I would like to start with our host city, Jerevan. And, Major, Cali used COP16 to strengthen the role of cities in the global biodiversity agenda. What would you like Jerevan to carry forward from Cali, and how can COP17 continue creating a lasting platform for cities to exchange solutions and partnerships for nature?

Thank you, Johan. First and foremost, I would like to just welcome everyone to Yerevan and hope that apart from the COP 17 main events, you had the opportunity also to experience the city and its hospitality. I think Ali did a great job in raising the voice of the cities and bringing up the important role that the cities play, because we do have quite an amount of impact of how these kind of programs may go, because we plan the neighborhoods, we kind of protect green spaces, and also are the ones that can make room for nature. instead of some development. So practically, I think what Kali did was an amazing job by raising the voices of the cities and the regions, and I think that's a very important thing that they did. So thank you very much, Madam President. I think after Yerevan, We can work more on the network of the cities, of the people who are involved in this type of programs, and share all the successful stories that we had. Well, for instance, it was like for COP 17 that we kind of looked into the things that we have done and understood that we kind of did not frame it like that, but it was like within the scope that COP generated. generally promotes, like a lot of things that we do. Because that is what the people started to demand. That is what our general populations do have in mind. So they are concerned about the air quality. They are concerned about the quantity of green areas. And I think what We can have, after Yerevan, we can have this network of cities who can share their successful stories. And I do believe that this can be a meaningful legacy, because cooperation that continues after this conference will surely benefit cities beyond the event. So, yeah, that's probably what I would like to achieve.

Thank you, Mayor. It's a good segue to how do we continue responding to different catastrophes and unfortunate events that happens at cities. Cali, unfortunately, had a very strong earthquake that happened last August, which affected more than 30,000 people. I think the question here is, after all these conversations we're having today, is how is Cali implementing and integrating biodiversity and nature-based solutions as part of the partnership with banks and the financial sector with the recovery plan? How are you working with the mayor and the team?

Well, first of all, good morning, everybody. Good morning to the mayor. This is a wonderful city, a wonderful country, and we were very excited to be here, especially, i think it was two days ago that we received a wonderful gift from the mayor, so thank you very much. Well, I would like to start answering by making reference to what it meant for us hosting the COP16. So COP16 taught us something very important. That was a huge responsibility, but the responsibility really comes after it ended. So one of our most important legacies that we learned and that we concluded while being the hosts of COP16 was the Cali Fund. The fund creates a mechanism for companies that benefit commercially from digital sequence information on genetic resources. So basically, the fund permits or allows private companies that in one way or another are using the resources, natural resources, to give a little bit back to the country and to the city. So the mechanism exists. But the challenge now is making more companies to be part of it. From Cali, we truly want to help. We want to understand what's working, and we want that barriers companies are facing, and to help not only the private sector, but the public sector. So connecting that, the Cali Fund, with what you were asking regarding August 10th earthquake. Our mayor truly believes that protecting biodiversity doesn't have to go in the other way of helping everybody, especially people that were affected with the earthquake. Protecting biodiversity and helping people and somehow our buildings that were damaged, it's one responsibility. And this is a huge opportunity as well to think about the city that we want to rebuild, a city that for sure have more green spaces like Yerevan. I really, i was admiring the city, the fact that it has a lot of trees. It has developed a lot, but still you have a lot of public spaces with green zones, you have trees, you have a very well-developed city. So this is a huge opportunity for us to rethink how we want to rebuild our city, thinking and protecting our biodiversity, but as well, how we're going to make the Califon work towards it.

Thank you. And yes, I think that those opportunities are coming, and it's a good way for us to also looking at. Jervan, I have a question is, what opportunities do you see in terms of the city governments to bring local businesses, financial institutions, and civil society together in terms of being systematically financed implementation for nature urban projects, green spaces, and areas for the overall society to participate on?

Well, I think what I would like to probably reflect on Madam President's thoughts that progress does not always contradict the general biodiversity agenda. It sometimes can go hand in hand, and, well, in our experience, it does go. Because, you know, in the area where you have the kind of sustainable environment, in the area where you have the greenery, business also flourishes. So I think first and foremost is like having the clear vision and a very clear project, bringing the private sector, all other potential groups groups that might benefit from it or might have impact on them, bringing back, bringing them in a very early stage, talking to them. And I think this is one of the things that we have been doing for like more than three years, and we have like acquired fantastic results. by involving the private sector in these types of projects. So practically, we're demolishing a lot of old constructions in the green areas, in the, like, let's say, city gardens, and they are not resisting it. Generally, they understand the agenda. And we also make room for some business in there, which can fit into that. But I think sometimes soft power is not always enough. Sometimes you need to go hard, you need to bring in some regulations. Of course, this is also something that you need to talk through with all these groups because this is something that changes the rules, but this is something also for the benefit of the city and for the benefit of the people of the city. What we do, we go hard on when there is, you know, we can't find the right balance between the kind of, you know, the agenda that we have and the potential interest of the business, but we always have the interests of the city and the interests of the population in our hearts. That is how we lead our project. And sometimes it just needs to be regulation. It's just hard decisions, but that needs to take place.

Thank you. Yes, I think putting people first is one of the main ideas that we have been taking from this COP. I have one last question for both of you, and it's more of a general question in terms of what do you expect to get out of COP 17, and how will this lead to the next COP? And what's the lessons learned for the other cities that are hosting COPs in the future? I will start with Daniela, and then I will go to Major Tigran.

Well, first of all, we would like to talk about the Cali Fund, which was one of our greatest accomplishments after being the host of COP16. And we definitely would want or would desire for the rest of the world to know what we're doing and how we are somehow using this fund to make private companies come to the conclusion of if you some way or another are using the natural resources, then you have to give something back to your city and to your country. Califon has been very special for us. And in the other hand, after the earthquake of August the 10th, More than 90,000 people were affected. So of course, our first responsibility is towards families, to support affected families, to restore services, but also to rebuild our city. And as I was telling you prior, part of the responsibility that we have today in rebuilding our city is to to think about a city with more green spaces, a city that gives this vibe that Yerevan has. I am truly astonished in a good way of how the city managed to be developed and yet have a lot of green spaces, trees, and parks. And that's something that we need to think about. And that comes hand by hand with a sustainable finance framework that we have that can support investments in biodiversity, and that's very important, because as long as other companies globally think about Cali as a very, very good city to invest, especially when it comes to green finances, then that's something that would really help us not only to rebuild, but to be more and more developed. And of course, the last thing that we would like is to invite you all to our our Biodiversity Week, which is next year. And as you may know, or if you don't know, well, let me tell you, Mayor, in Cali, we have more than 500 species of birds. So we are hosting next year the Global Bird Fair. So you are very much invited to our city to see our beautiful birds.

Thank you. Thank you for the invitation. I think Well, we have very particular two projects that we are focused on, and both go in line with the agenda of COP17. One is the restoration of Rasdan Gorge, which we are now sitting in. And this is a very big and important program for the city, and in general, that will kind of have made all the regulations that protects the gorge, but we need to do a lot of work to kind of restore the gorge as it should be. And we have a second very important program, which is restoring the Dalma Gardens, which is around 250 hectares of land. And it has a very long history, more than 2,800 years. So it is situated just like 200, 300 meters from here. And that's another very specific program that we want to focus on. But in general, I think the COP was a very good experience in all forms and terms because the city experienced this type of an event. That's a major thing, and I'm sure Kali would agree because this is something that you try to be ready for, but you're not ready for most of the time. Hopefully, it was not that bad, and hopefully we... Thank you. And I think this was a great test for the city, and hopefully, yeah, we're doing good on that. Thank you.

I might have to step in and say that every time I organize a Cup, two or three months before the Cup, I'm like, "Oh my God, things are not moving fast enough," and all that. And then you show up and everything is perfect. And Gervais wasn't the exception. You have a very beautiful venue. The pavilions are beautiful. The city's ready. Everybody has been so welcoming. So no, you have been stellar host city as well. And the food is really good as well. Just to wrap up, I will do a quick summary of the key takeaways that I have here is that people go first in the policies. It's important to continue involving private sector, especially when it comes to infrastructure projects with green finance, green spaces, and sometimes soft power is not just enough. We have to work with regulations and the national government as well. Looking forward to continue enjoying your city, Major. Looking forward to going back to our hometown, Cali. And we just have one short video from the Mayor of Cali, who unfortunately couldn't come here due to the response to the earthquake. It will be a very short video that we'll put now. And then with that, we'll wrap up the panel. So I will ask the technicians if they can put the video, please.

I'm looking forward to welcoming the world back for our second Biodiversity Week and the World Bird Fair. We also hope that COP17 will help strengthen the Cali Fund and mobilize resources for biodiversity protection worldwide. As Cali rebuilds, we're working toward a stronger, more resilient city with nature at the heart of its future. Our message is simple: when cities work together, global commitments become local action. From Cali to the world. Let's keep building a future where people and nature thrive together.

Well, thank you both for the panel. Thank you for everybody who stayed. And this will reconvene after lunch break at 13:30, in one hour and a half. And with that, I just say thank you for making it. I know you have to rush for the panel. And thank you, Major, for hosting us.

Thank you very much.

Thank you very much.

Hello, everybody. Welcome back. We're going to start back in one minute, so if you can please take your seats and we'll get started. I need a bag. All right, thank you, everybody, for the patience, and welcome back. Hope you had a good lunch break. We will continue the program with panel three, innovative approaches, markets, financial instruments, and benefit sharing mechanisms. This panel is going to be moderated by Lina Mondragon from CAF, and we'll have Anita Dajhor, Executive Director of Finance for the Diversity Foundation, then Amelia Fawcett, Co-Chair of International Advisory Panel on Biodiversity Credit. Mariana Sarmiento, founder from Terrazos, and Jacob Minar, chief commercial officer of Triodos Bank. With that, I will pass it off to Lina, who will get us started.

Now? Yeah. So thank you, Johan, and the organizers for the invitations. Happy to be here. Good afternoon, and welcome to this panel three, Financé. I'm Lina Mondragon, Climate Action and Positive Biodiversity Manager at CAF, a development bank of Latin America and the Caribbean. And it's a privilege to facilitate this conversation. CAF, just for you to know, is a regional bank of Latin America and the Caribbean that has the objective of becoming the green and blue bank of the region. We have the commitment of reaching a floor of 50% of green finance by 2031. That's around $4 billion in the next five years, 10% at least for nature. So we meet in Yerevan at a turning point. COP17 is the first global review of progress of the Kunming-Montreal Global Biodiversity Framework, halfway between its adoption and its 2030 deadline. The message so far is very clear. Countries are planning for biodiversity as never before, but implementation is still too low to reach the 2030 targets. Finance is central to closing that gap. The question is no longer whether we need to nudge the instruments, it is how we scale them with integrity. At CAF, we are convinced that if we want to mobilize financing to biodiversity and nature initiatives and close financial gaps, we must work to do it also with financial markets. The challenges, lots of them, scale financial instruments, bring to the table reliability and confidence, demystify that nature doesn't have a clear underlining economic and financial foundation, put science and nature data at the service of generating confidence and pragmatic investment approaches. And NDBs have a crucial role helping to address these matters and to reduce these market failures. Multilateral development banks have been working towards this moment in 2021 at COP26 in Glasgow, 10 MDBs signed the Joint Statement of Nature, People, and Planet. They committed to mainstream nature across their policies, investments, and operations since then. The MDBs have moved from commitment to common methodology. In November 2025, they released an updated version of the Common Principles for Tracking Nature Finance, and together with a first MDB Common Nature Finance Taxonomy. These tools give the market a shared language for what counts as nature finance. So this is basically the role that MDVs has had done until now. For this purpose, this panel is very pertinent. I think it's going to be very interesting with our four participants. So if you agree, let's start with the questions. First, Anita, Executive Director for Finance and Finance for the Biodiversity Foundation. So the Cali Fund, the Cali Fund has now moved from a negotiated mechanism to an operational fund with its first private sector contributions received. What have the first months of implementations revealed about what is working and what needs to be improved before the mechanism can operate at a meaningful scale? And how can the Fund ensure that the resources it raises reach indigenous peoples and local communities directly and accessibly, in line with the aim of locating at least 50% of its resources to their self-identified needs?

Thank you so much, and thank you for inviting me for this panel. I've been as Finance for Biodiversity Foundation, we were part of the CaliFund steering committee as an observer. And what we see that the CaliFund has just been set up, so it's a very early phase. A lot of people will say, now there's only small amounts are raised yet, but this is just the setup phase. A couple of things now need to happen. First of all, raise awareness. That is important. Many companies, and we know that, I will come in that bit later, but many companies still never heard of Calyfont. and also don't know that this has been set up and that they can give voluntary contributions. So awareness on the fund, awareness for whom it's important, and also how it works with digital sequencing information towards benefit sharing. It's a complex topic, not many people know about it, also not in these sectors that it's addressed, for instance the pharma sector, the biotechnology sector, all sectors that have innovations and take things from nature. So that's the first thing. A second thing is that the governments also need to try to facilitate the implementation of the Cali Fund in their countries. You can't expect, of course, voluntary contributions per se if this is not being incentivized by governments. So the meaning behind the Cali Fund was that in order these large companies especially will have less penalties on their due diligence and legal implementation on benefit sharing, and that in trade they can give voluntary contributions to the fund So this will come at the place most needed, and especially on local communities and indigenous peoples. I think, yeah, I bring it from, because we're here at Finance Day, so I bring it from the finance perspective. The financial sector, and especially investors, I think, have a very crucial role to play, also address the awareness among these sectors and companies in these key sectors that can voluntarily contribute. And so therefore, as Finance for Biodiversity Foundation, with our members, financial institutions, we launched the first investor guidance. What is the topic? What does that mean? Digital sequencing information for benefit sharing. And also how can investors raise the topic with these companies to see if voluntary contributions are feasible. I will stop here. Thank you.

Okay, let's go with Jacko, Chief Commercial Officer and member of the executive board of Triodos Bank. So the first question is nature-linked finance is using financial structures such as bonds, loans, and investment funds. From a banking perspective, Which elements of existing capital markets infrastructure, such as standardization, aggregation, ratings, securitization, or secondary markets, could be most effectively adapted to natural link credits?

Thank you very much, Lina. Let me first say a tiny little bit on three of those, because we have a target of investing 500 million in nature-based solutions. And I'm saying that because at the moment that we committed that, quite frankly, we didn't know whether we would ever reach it. So Triodos Bank as a player wants to be a first mover, but we realize also that it is not yet easy and that you are not going to get to scale if you ask everybody sort of to take the leap. while you are not yet fully have all the requirements that financial sector or banks will have. So let's discuss those requirements, because we should not be naive and think that for nature, different rules will apply altogether. So at Triodos, we do loans. We also invest in bonds. We issue bonds. And we also manage funds. So the first point I want to make is There is not a single instrument. We need all the instruments available to us, and we need them in different phases of the development. So let me say something about those stages, because if you talk about innovative projects, and then often you need some subsidized money or you need foundations. In the Trilateral Group, we also have some foundations that basically can step in at the moment when commercial parties are not yet ready. Now, if you have projects that have good cash flows, then obviously the bank can step in. And we do that. And I have a couple of examples if later on we want to talk about those. And so it's important, I think, to distinguish the private markets, where banks play a big role and we talk about what is needed to make a loan bankable, and then the capital markets, where a totally different set of rules apply. So just maybe some examples of what is already possible as a bank. So one of the things we do is that if there are cash flows that maybe come from governments or from other parties and are sort of in the form of a subsidy, then we often see that there is a time to bridge between the moment that the subsidy is paid out, which is often after the performance has been done. And the moment that it is needed to actually do it. So we provide that type of bridge financing. And we've already done it in Spain. We've done it in Belgium. We have a couple of examples of that. Another thing that has really worked for us is if you have a party that has a larger balance sheet and that has different types of activities, and then develops a nature activity, and we have one in Scotland, for example. Then basically you can borrow against that larger balance sheet, and then it also works. Ultimately, I guess where we would want to go is that we would have special purpose vehicles with only the nature projects that will become bankable. Today, we hardly ever see that. And if we would look at how renewable energy has developed, and renewable energy has really scaled, then we see that the stable cash flow that subsidies can provide on top of market cash flows that come from carbon credits or from nature credits, that combination can often be bankable because the stability of the subsidies helps when prices in the market are low and vice versa. Now then, let's go to capital markets. And maybe with your second question, we will talk about it a little bit more. But here, I think it is quite simple. What you need is an investment grade issuer. If there is no investment grade issuer, there is no capital market instrument. So what we see now mostly is that-- and you have to, in the capital markets, you have to distinguish between the individual projects. And the instrument, so the instrument would be a nature bond, but then you basically need parties that aggregate these projects, put them on their balance sheet, and then put them in that nature bond. And we have seen some examples of that, but it's still a bit few and far between. So we have invested in a nature bond where 10%, it was basically a green bond, climate bond, but 10% was nature-based solutions. And we have seen one in Germany, where actually a river restoration project was in there. And those are available to us now. But today, we are looking mostly at state-owned banks or DFIs, where actually these type of projects are available.

Thank you, Jaco. Very interesting. So let's go with Amelia Fawcett. Co-Chair of the International Advisory Panel on Biodiversity Credits. So the first question is, it is often said that nature credit markets are still at an early stage and fragmented. How can they help mobilize finance at scale in support of national biodiversity strategies and the global biodiversity framework? What elements, in your view, need to be common across markets, and where should flexibility be retained to reflect national and even local specificities?

Thank you, Lina. Do you have an entire afternoon for me to answer that question?

Yeah, go ahead.

It's a bit of a mouthful.

I'd like to start, because it's quite a different thing than what my colleagues were talking about, because I'd like to begin by remembering why or reminding all of us why we're here. So nature is infrastructure. Forests, wetlands, reefs, and healthy soil protect coasts and cities. They secure water and underpin the productivity of farms, supply chains, and livelihoods that depend on them. So investing in nature is central to resilience, adaptation, and transition to a thriving bioeconomy and long-term growth. And the reason I say that is this is not carbon 2.0, and we're not even anywhere near where the carbon markets are. This is project finance. And I want you to think about that as I answer the question. So yes, it's early stage. It's not nothing. The compensation oriented markets, so that's the regulatory markets, which we see, for instance, in the US, in Germany, in Colombia, or the UK biodiversity net gain. And then the voluntary markets would be Australia, New Zealand, and Brazil. The size isn't that small for compensation. It's probably 8 billion a year, which is, I suspect, more than most people think, and that comes from a few countries. So there is scope for significant growth. And to give you an example, UK biodiversity net gain was about 100 million about a month or so ago, and within the next five years, it'll be 3.5 to 4 billion. So there is a significant scope. Then there are the voluntary markets. Where you're absolutely right, they're experimental, they tend to be pilot oriented, they're philanthropically supported. And I think it reflects the challenge for private finance for mobilization for nature. And it is way beyond just nature credits. So the point you make, Jacob. is absolutely right. Nature credits are part of a bigger toolkit. The Global Biodiversity Framework mentions them in Article 19, but clearly we need more than that. But a large part of the economy clearly depends on nature. A 2019 Dasgupta report, I think, made that clear for all of us. And also, for my colleagues to my right, a significant part of assets held by financial institutions now clearly depend on nature. So, at the IAPB, we believe that healthy ecosystems create value. We think there's a compelling, there are some compelling case studies, which we've put on our website, for ag, for power, for tech, for forestry, that actually show that allocating finance to nature restoration and conservation generates positive impacts, not only on nature, but also in business. So healthy ecosystems support natural flows and services critical, as I mentioned, for resilience and the long-term performance of business. So nature credits, biodiversity credits, as a financial instrument for nature finance, we think, provide significant upside. They could have a positive effect on revenue models. and on corporate value. And we've just launched a return on investment methodology. It's open source. It's free. Companies can use it to figure out and test it and figure out for their own supply chain what is the impact of investing in the nature credit or direct. And we're moving on to the accounting side as well. But by, I think, coming to the second part of your question, Lena, by improving the link in understanding of the link with business, governments, and the private sector, we think the conditions will be better and will increase for nature credit markets to grow significantly.

Interesting, and thank you. We have lots of tools now.

I've got more for you, don't worry.

So let's go with Mariana. So Mariana, there is a founder of Terrasos. There is a growing interest in biodiversity finance, but demand is still not deep, predictable enough to automatically make sure nature projects investable. From your experience with Terrasos, what does bankable actually mean for the biodiversity project? And what are the minimum conditions a project needs to meet to attract credible long-term demand?

Thank you, Lina, and thank you everybody for being here. For those of you that don't know Terrazos, Terrazos is a company that was born in Colombia. And one of the things that led to, I guess, what Terrazos is today is that there was a problem from the private sector that we needed to solve. There is regulation that was imposed through a biodiversity offset requirement, but also a 1% mandatory investment if there was a direct capture from a water source. These two triggered demand, they triggered investment from these companies into the landscapes. except that was not, or is not, their core business. So money needed to go into the landscape. Sometimes it was going in, sometimes it wasn't going out, but what is for sure is that it wasn't delivering results that lasted, results that could really aggregate into anything. So that's where we came in and we adapted the US wetland banking model to Latin American reality. And we created alongside the IDB, the first habitat bank in the region. And what this is, is, think about it as, so the first thing that we did, because I think this is going to tie into the answer, is, we mapped where all the potential offset requirements and 1% investments were going to be in. Because the regulation establishes proximity requirements and like for like proximity requirements. So we have a full map that it says where we can say, okay, there's going to be offset requirements in this region or 1% investments in this other region. We said, okay, we can establish a habitat bank, which is a large scale conservation and restoration project. And when I say large scale, think 600 hectares. but it's manageable size. And we would establish the project, we would structure the project so that it would last for 30 years. So figure out what it would cost for this project to last for 30 years. And the premise was that these companies that had the problem would only pay once we reached ecological milestones and they got an approval from the agency. That's what a habitat bank is, with the particular, like with the detail that the way in which you manage a habitat bank is through credits, because we're trying to aggregate projects. So to keep it super simple, 100 hectares, 100 credits, each credit is one hectare for 30 years, yeah? We sold out. on credits in less than two years. Our initial financial model had a, you know, we were expecting to be able to sell between five and ten years. And I think what it comes down to is, you know, if the private sector is told that they need to invest and there's a consequence for not investing, they will do it. And also, they're not interested in doing it themselves. So, I think when we talk about what makes a project bankable, there was a million dollar investment in that followed on. Today, we've raised more than eight million for these projects within Columbia alone. We think we can reach much, much more. It's not so much about the conservation project, that is important. but it's about delivery and cash flows. So the bankability of the project at the end of the day, yes, it requires a good project, but you will be judged, and the success of the project will be judged on whether you can deliver the outcomes that you promised and whether the cash flows will come in. So if we draw a parallel with with between what happened in Colombia and what we're trying to discuss in the rest of the world is, okay, how do we build credible demand? And it's credible demand in terms of what the attributes of that have to be. In Colombia was very clear, was a hectare for 30 years of specific ecosystems that allowed us to project where to do the projects, but also timeliness. And this is where we have a big challenge, and it's the institutional capacity that our countries have sometimes makes things not be as fast as we wish for whatever reason. So in the first project, we had an amazing outcome, which was we sold everything in two years, we contracted everything in two years, and we're closing all requirements, the results and verifications in seven years, that is really, really good news. But the newer projects have certain delays because the agencies won't approve or there's some kind of delay in the approval process. And that makes investors and bankers and everybody really nervous. So again, just kind of to recap, it's capacity to deliver. on what you're promising and then cash flows. You need a good project where there's no reputational risk, that's really important, but you can't even have the conversation about reputation if you can't demonstrate on the other two things.

Thank you, Mariana. So after this first round of reflections, raise the voice, New topics, rules and conditions, clear rules and conditions, information, investor guidance, flexibility in terms of instruments, open approaches, the challenges of nature as an asset. Basically, mandatory versus voluntary, reputational risks and risks approaches. So lots of things that are part of the process of this challenge, but we are on the path. So we are very optimistic. We have to keep working on that. So let's go to the second round of questions. So Anita, how can innovative financial instruments and mechanisms help scale nature finance? and what is needed to attract institutional investment while ensuring credibility and integrity. And if you want to speak a little bit about Tropical Forest Forever Facility, please go ahead.

Great. Now, it's a great round, I think, so far with the panel, because we heard about offsetting and really looking for projects on the ground, we heard about biodiversity credits, and we heard about Triodos Bank really knitting, is the word you used, I think, yesterday in the conversation, knitting to see how a natural capital fund can be launched. And that's not easy. That means that, i think, also from our community, a community of financial institutions of 220, and now I can announce also 10 more financial institutions joined our community from today. We see that we're tracking the needs on these instruments and how easy that is. First of all, usually when I speak with governments or other stakeholders or NGOs, the first thing we always need to say that financial institutions are not philanthropic organizations. They are commercial. They need returns. And that makes it always difficult. If it's philanthropic money, it's easy to deploy money towards nature. But if you want a return, it's difficult. We've been doing a couple of surveys so far with our community. Every year we ask our community, what are your barriers and what is your appetite in financial instruments, but also nature investments? And we see it's rising. So there is a movement there. We don't see it reflected yet in, for instance, the State of Nature report from UNEP. We see that there's still way more negative, harmful flows towards financial flows than positive ones. So we have a problem. We can focus on the niche, we can focus on the small projects, but that's not answering, and that's not how we can meet the ambition of the Global Biodiversity Framework, which means halting and reversing nature loss in 2030. So that means we need to do also something else. We need to look at scale. And that's also something in our survey we asked. One of the least barriers, biggest barriers, is scale returns on these investments. And also to move these mainstream companies towards nature practices and innovations. And that's something, i think, so that's one bit. Another barrier for financial institutions, investors, banks, is also the quality and how do you know you're making impact on nature? So that's also something that we are collaborating with UNIF and WWF in the coming years. How can we, across different asset classes, create a pathway in a frameworks and guidances which can identify these impacts on the ground and opportunities through the lens of financial asset classes that can be mainstream companies, that can be real assets, It can be natural capital, but it's also infrastructure, et cetera. And that's something, yeah, we hope to change something and really help the finance community to make progress.

Great, fantastic.

I forgot to say something on TFFF. Yeah, you want me?

Go ahead, go ahead, yeah. We have time.

We have time.

Okay. Yeah, 15 minutes. Yes.

Yeah. Okay. Maybe TFFF, I don't know if you know, Tropical Forest Facility Forever, that's a new financial mechanism. By the end of this year, we need to raise 10 billion private, of a public capital in order to, private capital to come in. This is a really out-of-the-box thinking. It's been announced by Brazil. And we also have the election outcome today, Lula won. And so that means probably, yes, applause. Voila. And that, I think it's, hopefully, it means also good news for TFFF and that we hear and see more countries will commit to capital to provide by the end of the year, the 10 billion, so private capital can come in. What is interesting on this mechanism in that it's huge, its scale, it's public-private finance. And that's something that, especially the institutional investors in our community, we have many gatherings on this fund, are very interested in, because it creates return, this mechanism, it creates impact, hopefully, and that still needs to be seen with ESG safeguards, and that it's really coming into the ground, into local communities. And Indigenous peoples, that's something we need to keep the pressure on. But it looks promising. And because of the scale, it can be very interesting for large institutional investors as well.

Great, fantastic. So I think considering that we are here, I'm talking about creating markets and/or developing markets. conversations and dialogue, permanent conversation and dialogue is essential. So I think your approach is really interesting of that because we have to talk about more into the table conversations to connect supply and demand. So great. Let's go with the second question for Jackel. Liquidity remains a major challenge for biodiversity-linked instruments, particularly when underlining projects are small, place-based, and generate outcomes over long time horizons. What would need to change in the structuring of these instruments to create sufficient scale and liquidity for institutional and commercial investors?

Thank you, Lina. If you allow me, because this, I think, is also a discussion, so I will address your question, but I want to build on some of the good things that I already heard in this panel. Because first and foremost, we are talking now about how to make nature bankable, investable. But we have to all realize, obviously, that nature is not a committed modality like any other. So it cannot be a solution that only talks about how can we bring in private finance, and that will solve everything. Everything. And some people seem to think that way. So we do need to stop destruction. That is not only through finance, that is also through government interventions and protection. We need to change the incentive flows. It's a different discussion, I know. But in terms of the hierarchy in my head, that's the hierarchy. You stop destruction. You change the incentive flows, that will make some of the projects that we are all talking about here more investable, and it will make some of this destruction less investable. So extremely important if you look at it from the broader point of view. And then the third question, it's also very important, but for me that's the hierarchy, is the topic that we are talking about here today. Second point I want to make, and I think you already talked about that, that nature is not just any other And you talked also about Target 18. I really like your contribution, because basically what you were talking about is a compliance mechanism, because we need to create that demand. And only doing that in the voluntary way will be difficult. And I don't understand your country and the situation. as well as you do. But the way I understand this, that when you run into a barrier of how do we get the projects that actually they are then going to invest in, you created a solution for that with the Habitat Bank. And that's the kind of thinking that we really need. So then we come to how do we create liquidity for investors? Well, we're a little bit far away from that now. But what the thinking has to be that we need ultimately sufficient number of projects that then end up on a balance sheet. of an actual issuer who can create liquidity for still more investors. Today, perhaps the bigger problem is how do we create more projects? That's what the Habitat Bank was trying to do. And that's also where we are sometimes investing in enablers, in facilitators. Governments should probably also think how with blended finance, they can make that happen. Because I think the question here is, what is the barrier that we should tackle first? And that project level, that's probably it.

Great. So yeah, very important, not competing agendas, pragmatism, language, expectations, clear expectations, impacts and results.

I think everything is valid, as in terms of instruments, out-of-the-box, different things, different approaches, voluntary, not voluntarily, everything counts. So let's go with Amelia again. There is growing consensus that high integrity is a prerequisite for scaling nature credit markets. How do you define integrity? And how can market governance ensure that growth does not come at the expense of integrity?

There we go. I think I should back up one minute and just explain, the panel was set up by the French and British governments. We had 25 experts. We had financial actors, policy people, ENGOs, indigenous people, local communities, academic scientists. Everything we did was based in science. And I will come back to the indigenous people and local communities because it's important to the integrity piece. Interestingly, when we started, we thought, we were told, this is getting private finance into markets, they're just going to come in and it's carbon credits to. Absolutely not the case at all. As I said, it's not. It's project finance. But more importantly, coming to your point about compliance markets. It was clear to us very early on that actually there's a huge role for governments to play, and that is to create the enabling, the high integrity enabling environment that will give people the confidence to enter the market, to stay in the market, and to invest over the longer term. So what we did in Kali is we launched a framework of 21 high level principles across three dimensions, verified outcomes for nature, an issue you both have addressed. Inclusion and rewards, which I'll come back to, and good market governments, which we developed those 21 with WEF and the Biodiversity Credit Alliance. And as I say, we co-developed them with a broad range of stakeholders. Pause. The traditional way of doing this kind of a working group, we had five working groups with another 20. So about 120 people from 27 countries involved. The traditional way is you come up with something and then you consult. with indigenous peoples. We said, "No, we can't do that. They need to be co-creator, co-- they have to share in benefits." And so, they were like every other member of the panel, and every single working group was run the same way as well. So, what we came to the conclusion was strong safeguards are fundamental. For instance, we don't believe in offsetting the way you would think about it, which is you could offset damage in Para State, Brazil by giving it to a habitat bank in the UK. We said it has to be its compensation, it's like for like, and respects ecological equivalence, and making sure that you're enforcing the mitigation hierarchy, and ensuring, really important, goes a bit to your verification point, that nature credits don't cause leakage, i.e. displacing nature degradation as opposed to actually addressing it. Safeguards are also social, so the high level principles were not only, as I say, about IPLCs being informed, they were just fundamentally part of it. And so we believe fundamentally, and our standards and the ones we've just announced demonstrate that revenue generated by nature credits should first and foremost, reward the local stewards who are stewarding the land. Since Kali, we've taken the work to the next level with effective implementation and activation by embedding high integrity within market practices and a policy framework. We have a policy forum with 20 plus governments. We had 26 at our last forum, and today it was standing room only. The policy forum is where Governments are now, at a global level, collaborating directly, knowledge partner, you know, collaborating, sharing knowledge, and helping us develop standards that can be form the foundation in every market, but they'll have to be local as well. And our role has been as a knowledge partner and a convener in helping to progress to implementation, high integrity into national policy context. So we've worked to propose global standards. We think they're the building blocks that policy makers and market actors can use to align with high integrity principles. What we are not doing is we're not prescribing what country markets should look like, but what we are doing is proposing a common vision of what the key design elements are. So the last thing I'll say, which immediately addresses your issue, is yesterday, as we say, moving from principles to standards, we announced our first three standards for public consultation. One on life cycle, so the life cycle of nature credits from project development to credit issuance, sale, claim, and retirement. Second, on additionality, where and how ecological and social additionality should be demonstrated. Most importantly, on social equity and inclusion, which is empowering indigenous people in local communities as full-fledged participants in every project. So we think this is the foundation for consistent policy makers and market actors. And I would encourage everyone to please go on our website, look at them, give us comments, tell us what doesn't work. That's the most important thing you can do.

Thank you, Amelia. Really, really interesting. I think you are giving us basically concrete tools of what a proper market needs to be developed and created. So that's what we are talking about, robust measurement, verification, rigorosity, standards, stronger rules and conditions. So yeah, it's really remarkable. Thank you. And just to close, Mariana, final question. From the demand side, what are companies, investors, and financial institutions actually looking for when they consider investing in biodiversity projects? What is the strongest appetite today? And what are the main factors still holding demand back?

I'll take this as an opportunity to talk about maybe the latest transaction that we did, which is, even though we started in a compliance market, now our buyers are coming to us because financial institutions are requiring that they go beyond compliance into a net gain. So one kind of That to say that financial institutions are not just a provider of capital to these projects, you guys are also market enablers and market makers. And I think it would be, I think that's a conversation that we need to push. But just to give you an idea, about $400 billion will be spent in infrastructure. Most of that will come from lending operations. If we did a parallel with the transaction that we did, it's more or less 1% of the transaction that will be invested into this biodiversity project, which is a habitat bank, which is going to deliver the outcomes through biodiversity credits. So here then the question is, okay, so why did they come to us to develop the project and help them with this? And it's, the buyer was looking for certainty. And it was looking for certainty that would allow them to comply with what the lenders were asking for so that they could get timely disbursements. So I think from a buyer's perspective, they need to have certainty, and this is where the principles and the standards are very useful about what is it that they're buying. So we need to come to an agreement in terms of what is it that they're buying, what is it that the client needs, and they need certainty that they will get that. And then investors, which are sometimes the clients, but oftentimes very different. In our case, we have the Land Degradation Neutrality Fund. They're an investor into our projects. The IDB is also an investor into their projects. certainty in the cash flows and timeliness, and risk disclosure. And I think here, we need to be, I mean, nature projects are risky because there's uncertainty. So I think it's not pretending that there are no risks, it's knowing what they are, disclosing them, and if they come up, how are you going to manage them? I think those certain things build trust, and then the more trust there is and understanding on how these risks are managed, then more transactions will happen. And then when we talk about investors, I also wanna mention landowners in that category. They're the ones that are putting the most critical capital to make these projects work. They also need certainty regarding cash flows and timeliness. And I think that's really important to keep in mind. We treat them as beneficiaries of a percentage of the revenue when there's no certainty when the revenues are going to come. That doesn't generate trust with the right landowners. So how do we create the models that also give certainty to those custodians, to those landowners? that we really all depend on to make this a successful market and successful projects. So again, certainty when it comes to the product for buyers, and then in terms of investors, certainty when it comes to cash flows and the timeliness and risk disclosures.

Thank you, Mariana. So basically, again, clear information, manage expectations. ongoing conversations, full disclosure. Thank you very much. This has been excellent. I think we have 30 seconds to close, but please join me thanking this excellent panel and conversation. Thank you very much. Thank you very much for the invitation again, and thank you to Anita, Emilia, Jacko, and Mariana for the insights, and thank you all for being here.

Thank you very much, Lina, and thank you to the fellow panelists. I will invite our new panelists to come to the head of the table. So if I can, please welcome you to the next panel. Key Sector Transitions, Financing Nature's Market Opportunities is going to be facilitated by Abigail Heron from FAIR. And I will invite Wendu, Global Head of Emerging Markets for Sustainability Issues at JPMorgan. Kavit Saheti, Assistant Director General for the Office of Climate Change, Biodiversity and Environment at FAO; Sue Lloyd, Vice Chair of IFRS Foundation; Shaher Bashir, Chief Sustainability Officer of First Abu Dhabi Bank; and Wang Xingping from the People's Bank of China. So I kindly ask you, for those who are in transition, to please take a seat, and we'll start in 30 seconds. All right, with you, Abigail, the floor is yours.

Right, fantastic. Thank you. Good afternoon, distinguished guests and colleagues. Welcome to the fourth panel of the Finance and Biodiversity Day at COP17. So our discussion today focuses on key sector transitions, so that's financing nature smart opportunities. I'm Abigail Herrem, I'm the new Executive Director of FAIR, which is a collaborative investor network representing more than 400 institutional investor members, many of whom it's great to see today and who have come out to Yerevan. Collectively, they have over 95 trillion of assets under management. Prior to working at FAIR, I worked for 18 years at large global investors. At FAIR, we work with investors and with companies and policy makers to understand and to address the environmental and the social risks and opportunities associated with the global food system. So that's our lens. Today reflects a growing recognition that achieving the goals of the KMGBF will be dependent on how capital is allocated throughout the economy. At FAIR, we increasingly hear from investors that nature loss, deforestation, water stress, ecosystem degradation, all of these are increasingly recognized as material financial risks. And many of our investor members have come to us because we offer them data and intelligence and tools exactly on those issues. But on the flip side of that, those issues do also represent investment opportunities, and that's something that we'll unpack a little bit today, because there are investment opportunities in these businesses and in these sectors, especially those that are able to navigate the transition towards more resilient and nature smart models. As we know, not every company will successfully make that transition towards a sustainable future, and investors want to know which ones and to identify those ones that will successfully make that transition. The good news is, we've got clues as to what the future of food and the future of finance looks like. Investors are increasingly finding opportunities across a growing system of nature smart solutions. So that's things like regenerative agriculture, landscape restoration, fertilizer innovation, alternative proteins, novel feed solutions. I could go on. So it's no longer a niche concept. And that really is what today's discussion is all about. And a particularly important part of that is Target 18 of the GBF. So I've just come from the ministerial launch of the Friends of Target 18, and that repurposing of harmful incentives and subsidies can help improve market signals, give consistency, and unlock investments into more sustainable economic models. But we've also got to make sure that financial institutions have the data and the information they need. So we're very lucky today to be joined by an exceptionally high-caliber panel, bringing together different parts of the international financial architecture. So to my immediate right, I've got Gwen Yu. So Gwen is the global head of emerging market and sustainability issues at JPMorgan. Kaveh is to my next immediate right, Kaveh Zayed. He is the assistant director general at the FAO and will be known to many of you. Down the far end, I've got Sue Lloyd. Sue is the Vice Chair of the International Sustainability Standards Board. And then we also have Shargil Bashir in the middle. He is the CSO of the First Abu Dhabi Bank. And then last but absolutely not least, we have Wen Xing, who's the Director General of the Research Bureau at the People's Bank of China. So we've got the whole of the ecosystem here. And with that, I would like to invite each of our panelists to offer brief opening remarks and if we travel down in this direction. So, Wen, would you like to start us off, please?

Thank you. Thanks for having me here. I think I see some familiar faces in the audience, so we probably all have the same comms department, and the speeches will be pretty much the same in terms of what you've heard already. But coming into this, over at JPMorgan, we had co-hosted a few convening roundtables with the UN CBD and also with IDB Invest. to really try and dig deep to figure out what are the enabling conditions that we need to make these projects finance ready, and how do we come up with this finance checklist? And so those solutions are all going to be fairly familiar to those of you who've heard this before, those of you who are working in the finance field. People always talk about public-private partnerships, de-risking tools, et cetera. The reality is, you know, blended finance has been in existence since the 70s, probably even before, and we still haven't managed to crack the nut. So I'm really looking forward to this discussion to just kind of really dig deep and figure out, well, why haven't we done it? And what are those enabling factors? What are the gating factors that we need to get over in order to get there?

Fantastic, thank you.

Thank you so much. So I guess that the big challenge that we face, and part of it is financial, is how do you get the investments in all of those solutions that you mentioned? We've known, and we talk about around 1.1 trillion a year is needed to deliver on sort of sustainable, inclusive, resilient agriculture and food systems. And to demystify that, that basically means investments in some of the things that you mentioned, right? How do we invest in sustainable livestock? How do we invest in restoration of degraded agricultural lands that can bring food security, but also biodiversity benefits, but also climate benefits? So how do we make a convincing case for that? And I think a part of that is in conversations like here in the CBD, where you have to change a little bit the narrative. which is often, this is a sectoral conversation, so the narrative for agriculture and food systems has not always been a positive narrative in this kind of a setting. How do you change that to focus on the positives that only this sector can deliver in terms of those solutions that will bring sustainable use of biodiversity, that will deliver target 10, that will deliver on the repurposing, not just of the subsidies, but the overall agricultural investments, so they can help to address climate challenges and the resilience and the biodiversity and the food security. So that's, and it has been a tough nut to crack, and I look forward to having that conversation with you.

I think a couple of things that comes to mind to me is very important is the topic of awareness, right? We're sitting here, we want to discuss finance for nature. But some of the key challenges we face today is that a lot of companies out there, they don't know how they're impacting nature and how is nature impacting their business models. We have investors who does not know the nature risks they have in their portfolio. And if maybe I can ask a provoking question here as well to everyone is that, how many in here have some kind of working relations to sustainability? If you can just raise your hands. Probably quite a few people. How many has a relationship to finance, CFO, something similar? One, two, a few, right? I think when you want to discuss finance, it seems like it's sustainability people discussing with sustainability people, but we need to bring many more CFOs and the decision maker into this conversation because those are the critical ones who needs to understand these risks, but also these opportunities from that perspective.

Okay, it's my great pleasure to attend this panel discussions and with such a distinguished panelist. My opening remark is mainly about our some of our policy measures or tools that are most relevant to push forward the transition finance and biodiversity finance to make more fundings going to nature positive or nature smart activities. First, now the central bank played a leading role in develop and pilot the use of biodiversity finance standards and announced nature friendly activities in some most sensitive industries, also including this dedicated biodiversity finance taxonomies. And also, we developed transition finance taxonomies for 11 sectors, including agriculture, steel, cement, so on and so forth. So that's the first part, the first point, the central bank developed the taxonomy so that we can build the pipelines of the projects, and the banks and other financial institutions can use the taxonomies to support, to do the financial support. The second measure is we actually take central bank lending facilities as an important tool. Currently, the outstanding of this targeted central bank lendings amounted to 1.5 trillion RMB, and roughly 20% of this This central bank money is going to nature and biodiversity related activities. And also, central banks use the green collateral policies. And we also do green finance assessments for financial institutions. This kind of a policy incentive. And the third point I would like to make is that we take the lead in establishing green finance pilot zones. And within the pilot zones, the high level coordination mechanism has been established, and data sharing and financial instruments, developments, and so on and so forth could be advanced. And so I think that these three policy measures or tools are quite relevant or important to the development of transition finance and biodiversity finance. Of course, we also take a lot of other measures, but due to the time constraint, I only highlight these three points. Thank you.

Thanks, Abigail. So maybe opening observations in terms of the ISSB's piece of the jigsaw puzzle here. I think that the ISSB standards are ideally positioned to assist with what we're talking about here for a couple of reasons. So firstly, introducing a global language to explain the information needed for those investing capital, whether it's banks or equity investors, big investment funds or others, the information they need to make investment decisions, including in relation to nature related risks and opportunities. And I think there's a couple of particular characteristics about the standards which make this very important. to address the issue that we're talking about today. One is the coverage of the ISSB standards now, nearly 50 jurisdictions around the world where this would be required reporting, information that's required to be provided by companies to investors. Another key feature is I think it really helps with visibility. This is the first set of sustainability reporting standards that focuses not just on explaining the risks that a company is facing, but also the opportunities that are available to a company, and providing visibility so investors can understand and price risks and allocate capital, but find opportunities as well. And I think the last key point I would make in opening is these standards are designed to be part of the formal regulated set of disclosures provided for investment decision making, so often subject to assurance. So this is reliable information that's investment quality that should also assist in unlocking flows of capital.

Fantastic. Thank you all for setting the scene so beautifully. So let's start with our first round of questions. So Gwen, I'm going to come to you first. This is a two-parter. Thinking about the title of the panel today, what would you say are the most investable nature-smart opportunities out there in large sectorial transitions? And then, rifting off that, what makes them finance-ready at the scale that you look at?

Thanks, Abigail. So I'm going to go back to what I was talking about earlier, because I think that's probably the framework in how I think about it. So one, what are the enabling conditions? And then second, what is this finance checklist that we need in order to make ambition underwriting reality? So there are three things on those enabling conditions part, and if you've heard everybody here basically saying the same thing, right? One is there's a credible pipeline of projects, but what does that mean? So it's bankable, there's a commercial model, there is demand for the services or product that the structure itself is trying to sell, and that there's people that are willing to pay. Second is that the returns match the risk, and they're de-risking opportunities there in order to get to that number, and that it's scalable within a reasonable time frame so that the second and third transaction happens in time, and it doesn't take too long to get there, because then people won't do it and they lose interest, right? The second is that infrastructure is there, so that the pipes are in place. The policy is durable, the rules don't change in the middle of the structure, in the middle of the tenor of the product itself. The regulatory signals are consistent. This is especially true for higher risk markets because it's really hard to even get investors interested in that. And if the rules are changing, then that doesn't really help. And there's delivery capacity and implementation, so the methodologies are clear, there's a clear title, there's technical assistance if needed. But finally, I think that the product or the structure that we're looking at is actually fit for purpose. So it's really good to have these one-off deals because it shows that we're able to do it. If it's not rooted into kind of the bigger business strategy or operations, or it's linked to macro conditions that we're facing today on how is this making your company more secure and more resilient in the environment that you are operating in, then that's not really going to help. And for banks, you know, we're pretty risk averse as an organization. So if it's capital that's going into into projects that are already getting financing, but we're looking at it from a different incentivization point of view and adding nature and biodiversity as part of it for things like ports, shipping, tourism, coastal restoration, any sort of adaptation and resilience type projects. then that really helps. And the fact that the structure is appropriate and is investable, i.e., if it's a fixed income product, then investors already have this as part of their asset allocation, and it's not something that is a hard hurdle for them to get to in order to get capital in there.

Super, there's a lot to unpack there, so we'll come back to that. Thank you very much. And Kaveh, so I would love to hear your views on the well-known significant finance gap that there is between the transition towards more biodiversity smart and resilient production. Specifically, what financing mechanisms are proving the most effective in your ecosystem for helping smallholders make that transition and across the agricultural value chain.

Thank you very much. Big question. So I think the first piece is the risk piece. It's the ones that can manage this risk. You're quite right that the recognition is not quite there. And the recognition is not quite there about current risks, right? I mean, we can see the impacts of extreme heat, floods, droughts on agriculture. We're losing trillions every year. But it's distributed, so maybe it's less visible. It's certainly very visible for small-scale farmers, but maybe not at the conglomerate level. But what I think we're not measuring and is even more invisible is the longer-term risks, right? If soils are degrading, or if we're losing the pollinators, or if the forests are shrinking, or the areas where we can have the fish stocks, then what do we have to protect future production? And that's like a future risk that we haven't integrated very well. So to get to your question, what works? Well, obviously, ones that can build around this risk, I mean, that can understand it, and that can share it. Because, you know, I mean, i have to my left and right financiers who know this much better than I do. Too often, agriculture is treated as a risky business, right? As a risky investment. So sustainable agriculture is probably treated as an even more risky business because it might take a little bit more, the payback time might be longer, or whatever you have. So I think we have to find these financing mechanisms that can manage risk, that can share risk, and that can cope with agriculture, which is especially small-scale agriculture, that can cope with aggregation and the means of finding ways to aggregate small-scale holders. If we don't do that, we will always end up overlooking the producers of, frankly, the majority of our agriculture and food. So those are just, I think, some of the ways that we've seen that. Of course, you mentioned it. You said everybody knows that portfolio guarantees and sort of mechanisms to buy down risk. In our experience, it's sort of, i guess a lot of the financial mechanisms at the country level, they like to see the risk, the buy down of the risk, to zero. And that's not workable, right? Maybe it's a model that's worked a little bit, right? I mean, if you bring in the vertical funds, the Global Environment Facility, and others, they can take care of some of that enabling environment that Gwen talked about, but, you know, is it realistic always to design your financing mechanisms around zero risk when it comes certainly to agriculture and food systems. I think not. And so that's another one of the challenges that we need to get around. So maybe that's just a few of the ideas for how we can close the financing gap. It's not really just about finding more money, but it's just finding more equitable ways of sharing the risk and ways of getting down to the level of smallholder farmers in whatever aggregated way is possible. Otherwise, the investment is just not reaching those who are the most vulnerable, but ultimately who are producing the most as well.

Thank you. Now moving to Sue. So you had a big day on Thursday, big launch. The ISSB published their proposals for nature-related disclosure. So can you bring to life for us all how this proposed disclosure requirements will help investors identify the nature-related risks, but also the upside as well?

Absolutely. So, the proposals that we published on Thursday are adding specific disclosures and guidance on how to provide good information about nature-related risks and opportunities. And what that does in combination with our existing IFRS S1 standard is really asks companies to explain their nature-related risks and opportunities that could affect their cash flows, their access to finance, and opportunities over the short, medium, and also the long term, which is important. And I think a key thing that the exposure draft does is it really emphasises the need to be specific. So if you have particular risks or particular opportunities, you need to be really clear what exactly those are. So provide us with the location specificity. the information that enables investors to truly understand what risks they are exposed to, but also what opportunities are there. And I think that's what's incredibly important. And it's not just explaining what the risks and opportunities are, but really setting out what's your strategy to actually build on those opportunities or to manage those risks. What's your plan? so that you can really sell your story to investors and attract capital. And that's what we hope is unlocked by these provisions, this transparency, what's your plan, what's the opportunity, and what's your progress to really inform decision making and to attract capital?

Thank you, Sue. Shadil, now your turn. So we've seen the FAB moved from identification of nature-related risks into a more mature integration, and that's fantastic to see. From a banking perspective, what needs to happen next to influence the lending decisions?

I think maybe just following up from what Sue said, Important to remember that disclosure is critical, but it's just the first part of the journey, right? Because that gives you an understanding, it gives you an understanding of where the risks are in your portfolio, but we need to then act on them. And the way to act on them is to integrate it into your own ecosystem, into your processes, into your decision making, into your product development as well. And I think that's where the critical aspect comes. The way we have seen this is that when we did, and we started our journey, first of all, just to understand where, what does, how does nature impact us in our portfolio specifically, and we use the TNFD framework for that. Post that, we decided to embed this into our decision making. And the way we did this was basically, we have been working with ESG assessments back since 2022. And at that time, the E aspect was very climate focused. And as part of that, we started expanding that climate understanding to moving into nature aspect as well. So basically, when we do assessment of every single corporate transaction within First Abu Dhabi Bank, it's basically to say each transaction gets an ESG score, and the E score is based on climate and is based on nature. And that is done based through asking our clients nature-related questions specifically, and getting an understanding of where is their maturity. And of course, what is helping now is that the bigger the clients, the better understanding they're having of nature. But coming back to the point, the most vulnerable clients, probably the mid-market, the smaller clients, they're not good enough to understand the disclosure requirements at this point. They don't have a sustainability department of 5, 10, 20 people that can help them with that understanding. And that's what we're starting to see now, that the biggest of our clients, they're maturing on the topic of nature, but the most vulnerable ones are actually still not moving. And the challenge is that they might get left behind. And I think from, so that's the important aspect of it. So when it comes to the lending decision making, what is important for us is that how do we engage with these clients? It's been very important for us that we're not gonna exclude any of our clients at this point. simply because they just don't understand their risk at this point. So we have an engagement strategy where we try to engage with all our clients across sectors that are nature sensitive. We have understood, based on our own TNFD processes, frameworks, that we have roughly a third of our portfolio is towards nature sensitive sectors. So what we are trying to do is to work with those client by client, industry by industry, to say, how can we help them mature their understanding of this topic, and how can we then act on it as part of our lending processes, in our credit policies, and in our decision making. So I would say that when it comes to larger clients, we are very mature. It's being included in our decision making. We are having those discussions. If the risks on nature seems to be high or severe, we will go and ask for mitigation plans. We'll ask for specific actions by those counterparties. But when it comes to smaller clients, we simply cannot take those kind of decisions at this point. We need to have a much more engaging, and that's why I started by discussing that we need to raise their awareness on this topic first.

Super, thank you. And then, Wang, just thinking about central banks and financial regulators, we all know they play a very important and growing role in terms of the transition. So, from your perspective, where are you seeing the regulatory and supervisory policies and the tools and the standards, where have you seen them be the most effective?

Okay, thank you. This question is very close to our heart, since almost all central banks are very serious about to safeguard financial stability. It's not necessarily the case that other central banks like us can do things such as developing biodiversity finance standards or take central bank lending facilities, so on and so forth. But almost all central banks need to be very much care about financial stability. So in terms of from the perspective of central bank, we take nature and climate related financial risk very seriously. We have taken several measures. The first is the risk assessment. Compare with climate related financial risk assessments and stress test. Our assessments of nature-related financial risk is at early stage, to be honest. But as I mentioned before, we have green finance pilot zones. So we very much push in those pilot zones the assessments of nature-related financial risk using the methodologies of LIP. or IBAT, integrated Biodiversity Assessment Tool, and so on, so we can have a better picture of nature-related financial risk. And I think that we maybe, hopefully, we could do the nature-related financial risk assessments and stress test very soon. That's the first point, is the stress test. The second is that we're going to promote the nature-related information disclosure. I very much echo colleagues here who underscored the importance of nature information disclosure. And we now very much promote the TNFD land sustainability information disclosure. And currently, 57 Chinese banks participate in the TNFD land nature-related information disclosure, and including in which 45 of them already published the TNFD, around information disclosure. And I'm happy that the TNFD has been integrated into the ISSB. And I think going forward, that there's a big push for information disclosure. And certainly, we as central bank, we are not directly responsible for the regulations of insurance companies, which is the job of financial regulatory agency. And we are not that involved in developing insurance market. But as a central bank who is responsible for microprudential regulations, I think closing the insurance gap and tackle the nature and climate related risk is extremely important. So we very much advocated the developments of insurance insurance instruments, including reinsurance, catastrophe bonds, and so on. And those are insurance products related to nature risk. And that's the subpoint, which is the insurance products and some of the financial products. And last but not least, we very much are engaged with local people and provide support through a financial policy. For example, we have a long and rich experience on inclusive finance. So we actually could use a financial policy, including the central bank lending, to support farmers, small and medium-sized enterprises working in the rural areas and so on, so that we could safeguard stable transitions. And I just give you an example. We very much try to mobilize funding to support the local people and to support the local economy to safeguard stable transitions. For example, in Guizhou provinces, the GEF funding can lead to five times of local government matching funding. And which can translate 15 times of commercial loans to support inclusive finance, including the micro business of indigenous people and so on. So by doing this, we can lower the risk, the transition risk or the nature related financial risk. Thank you.

Fantastic, thank you. And Gwen, one for you now. We're tipping into week two of COP17, we're starting to think about what that means, what do we need to engage with post-COP17, but what I'd like to ask you about is the next 12 to 24 months. So, you touched upon enabling conditions in your opening remarks. What do you think we need in terms of that to scale? And what's best solved by the private sector and what's best solved by public institutes?

That's a great question. If we stay where our competitive advantage is, that's probably how we'll get there faster, especially within the 12 to 24 months that we're looking at. So what I mean by that is within the public sector or MDB space, what's the durable policy? What's the rule book? And how do we make sure that we're protecting these titles and claims, especially in these high-risk emerging market areas? Is the technical assistance there? We don't necessarily have boots in the ground for a lot of these places, so what are the boots in the ground and how does that MRV look? And then, is there catalytic capital? And how do we get catalytic capital to projects to make them more commercial? Is it the right tool? Should we be using grants or demand guarantees or price floors like contract for difference? Is it a first loss guarantee that needs to be there? The public purse is really tight right now, so I think a lot of the times people have to make choices on where that money goes. So I think analysis really needs to be made in terms of what's going to get that public capital further in terms of the tool that's actually being used. And I agree with my fellow panelists here, disclosures are important, but disclosures for disclosure's sake isn't really going to change anything. So how does that get, how do we then, from a private sector point of view, embed that into some of the decision making tools that we're using? How do we look at data and make that decision useful? Is it at the national level? Is it at the subnational level? For these structures, can we make them repeatable? Because if we can make them repeatable, then we can scale it, and we can make it credible. There's transparency involved. We can reduce washing risk with clear design of what that product is trying to get to so that we can mobilize distribution to the right clients.

Thank you. And Kaveh, Gwen has just talked about the public purse and how it's well known that it's quite small at the moment. But how do you think public and also developmental finance can be used more strategically? And I'm thinking here about investment pipelines. I'm thinking about crowding in that sort of private capital for nature smart agriculture, rather than just financing isolated projects.

Yeah, I mean, that's sort of the dream. That's what we're trying to do, especially with agrifood, right? Because it is, you know, there are perceived high risks. It's the small ticket size, all the things that we talked about, possibly low return or slow return. So that means that this, you know, the public or development finance is critical. It's a game changer. This concessional finance and grants in many countries have been very important for us. The colleague mentioned the GEF. We also have, I think we've mobilized to date about $2 billion worth of GEF finance for countries. But is that leveraging enough? And I think in the next phase, I think that's our challenge. We have the GEF, we've mobilized a lot of money out of the GCF as well. We have the Kunming Biodiversity Fund. All of these help us with some of the enabling environment, some of the instruments you mentioned that can buy down the risk up front. But I think we need to do more. We need to trigger larger amounts of finance. 5 to 1 may no longer be good enough. It's going to have to be 50 to 1 or an order of magnitude. And I think that's where we look to a couple of mechanisms. One is that I think that we have underused the public development banks, especially the agricultural public development banks, that maybe are still lending based on an agriculture of a few decades ago, as opposed to the agriculture of a few decades that are ahead of us. But there's a lot of capital, and they're very close. to the beneficiaries, they're very close to the clients, as it were. So that's one avenue that we're exploring more of. A second one is, how can we use all of this concessional finance, not just to leverage money out of the private sector, but also, how can we use that same finance to help to optimize public investments, domestic public investments. There's a lot of investment in agriculture in countries, right? But is that investment delivering across the board, not just on productivity, but also on some of the nature benefits that you mentioned, the biodiversity, the resilience that's so important now to future proof agriculture, probably not as much as it could be. The talk here is mostly around the subsidies, but it's about much more than that. Subsidies in many of these countries is only a small part of the conversation. We'd like to have that conversation about the entirety of agricultural investments and then say, okay, if you want to invest in something that brings you productivity and jobs and biodiversity benefits and resilience, You can play with the levers, and this is the kind of investment that would really make the greatest sense. And I think that that's where you begin to see this leveraging of not just the private sector, but the domestic public sector. And we're doing that through instruments like the GEF. We have a food system integrated program. with the GEF that's working in 32 countries, who've chosen in a way to see their biodiversity, their environment challenges through the window of agriculture, right? So bringing sustainability and resilience into their agriculture, normally through a specific supply chain, and some of it is livestock, some of it rice, some of them are rice and cocoa and other things. And that's where we try to, as you say, crowd in the multiple players, the GEF and the Food Systems Integrated Programme gives us the ability to build that enabling environment, including on the information base. And as you've seen here, it's not a level playing field, right? Even with this brilliant Kunming-Montreal Global Biodiversity Framework, an extraordinary array of indicators. Most countries are still not able to measure most of that. So how do you then measure it at the granularity that makes sense for financiers, for investors? And that's what we're trying to do with this concessional finance that has been so important for helping countries shift towards more sustainable or more resilient agriculture.

Some great examples there, thank you. Sue, I'm going to come to you next. So Gwen mentioned disclosure for disclosure's sake is not what we're looking for here. So how can financial disclosure provide investors with that comparable information set to enable them to make better decisions and also capture the local context?

Yes, and let me start by saying that if people ended up doing disclosure for disclosure's sake, it will break my heart, because that's certainly not the intention here. The intention here is that the disclosure is decision useful, and for us, decision useful for investment decision making. So I really hope, our dream is that the information that's provided when people use the ISSB standards is going to help Gwen and Shargal and many others. have the information they need to allocate capital to the right places, and so that's certainly the intention. So how do we do that? So I think firstly, it's making sure actually that the information that's provided is entity specific, so that it's really explaining what a particular company is doing in a specific way. And one of the very important aspects of things to do with agriculture, land usage generally, that we're talking about today, is understanding location specificity. So where are the operations of a particular organisation, where is its value chain, what is it doing to manage the risks and opportunities in its own operations and in its value chain, and that's what the practice statement that we've put out for comment this week is one of the key things that it's emphasising. Also another really important aspect of our standards is that not only do we require that the information be entity specific, we require that industry specific information be provided. And that's because when it comes to understanding sustainability risks, including nature-related risks and opportunity, the industry that you're in really matters in terms of what information is really relevant. And so we're going through a process at the moment actually of updating our sector-specific materials on poultry, dairy, and meat. and processed foods to make sure that given everything that's changing in the agriculture sector, we're still focusing on asking the right questions and getting the right information to inform investment decision making. So we do want comparability, but we don't want every single company in every industry, you know, or across industries providing the same information because it just wouldn't be relevant. So we do include proposed metrics for companies in, say, meat, poultry, and dairy to try and get as much comparability where we've identified particular topics that we know are really front of mind for investors as they're investing in this industry at the moment. And that's really how we try to get the balance between having relevant information for a particular entity that has the comparability when it makes sense, which is often within an industry. And so things like land usage, really important for particular industries, not as important for others, and that's the balance that we're trying to seek. So I'm hoping that that will mean that Shargil and Gwen will be using the information that gets reported, and that it'll help move capital to the right places.

Well, that's a lovely segue to Shargil. My next question is for you, but, you know, just sort of riffing off what Sue said about how industry really matters. What impresses you? You know, what What makes a credible transition plan leap off the page for you? What do you look for?

I think, first of all, I would wish that we saw many more nature transition plans than we do today. I think I just need to be very transparent that there aren't many nature transition plans out there right now. There's a lot of companies who are starting to now work and embed nature as part of their processes. And what we have done is to say, we work with something called transition maturity assessment, where we go and say, each of our clients, how are they maturing from a transition perspective? Some of the things that you look for is accountability. Does the leadership of that company have the accountability when they're discussing transition specifically? Is it something that, again, is just happening at a sustainability department level, or is it going to happen at the CEO level? Is it the board level? And I think that's quite important. For us, accountability is quite key. The second part is materiality. So are they looking into the most material topic relevant for that specific industry they operate in? So if you're working in agriculture, as an example, water risks.

How are you working from that specifically? Especially in the region where we operate significantly, water is a very scarce resource. So if you're not looking into water scarcity, then it's not going to be a credible transition plan or assessment from that side. Measurable progress. How is progress being assessed is something that is important. I think those three things are key in every time we are assessing maturity. Two additional things that typically we look into is location. Specifically, when we look into nature, that is quite important for us, specifically because nature is a topic where there's a big difference where in the world you operate. While climate, there's a little bit more flexibility, while in nature, it's much more important whether the business is in India versus in Europe versus in China. So that is quite important for us. And the last point, if you are looking at a very mature company, is the time aspect. So what does the investment plans look like and how long term are those investments going to be specifically? So those are some of the things we look into to say that, you know, is this company working with the topic of nature in a credible way? That's something we can start looking into. But again, let me just start by highlighting again, it's very important right now for us is to help them on this journey specifically, to guide them that what does this look like. So for the past two years, we've engaged with multiple of our strategic clients and their sustainability departments to build their awareness. So these decision making is happening within their respective companies. And when we look into now, so back in 2022, we assessed all the public listed companies in UAE, 10% of them had done anything related to nature and biodiversity. When we look at the number in 2025, the numbers is closer to 70% of the company. So the numbers are moving, the companies are moving on these topics, but it's not going to be a quick fix. It's going to take time. And it's going to take time to make it to the agenda of the boards, the decision maker in those companies. And that's why I hope that when we are having a similar discussion at the next COP, We have many more finance people included in those discussions as well, because then it's really going to get embedded into those companies.

Thank you. And then Wang, so thinking about the transition of nature dependent sectors, we've all touched on how we're looking at longer time frames, higher perceived risks, and important social considerations for workers. So, how do you think that de-risking instruments and this whole just transition approach can help mobilize capital at scale? And what role do central banks play in supporting this?

Well, central bank obviously can play a very important role, as I mentioned before. And because PBC has been playing the leading role in establishing and improving the sustainable finance system, and by saying sustainable finance, we usually include the green finance, the typical green finance, and also the transition finance, and also the biodiversity finance. And now we also expand our coverage to include, for example, adaptation and also the circular economy, because the circular economy is also a combination of climate and nature. And when we push forward the sustainable finance system, usually they have similarities. The first is the taxonomies or standards. The second is the information disclosure which we have already discussed a lot. And the third is the policy incentive. As I mentioned before, we use central bank lending, so we do the green finance performance assessments for financial institutions and so on. So the policy at the central bank can provide an enabling environment for developments of transition finance or biodiversity finance. And fourthly, we push the developments of financial products, instruments, or services. And last but not least, we have been very much engaged in international exchange and corporations. For example, from the very beginning, we co-chaired the G20 Green Finance Study Group, and then It was upgraded to G20 Sustainable Finance Working Group. And we were the founding members of NGFS. We are one of the eight founding members of NGFS. And also, we are also involved in the bilateral and regional corporations on sustainable finance. And so basically, that's the five pillars of our sustainable finance system or framework. And in this process, we very much emphasize the capacity building through, for example, green finance pilot zones. And also, we attach importance to the AI empowerment to use new technology, including AI, to do the green projects, bankable projects assessments to push forward the information disclosure and do the financial stability risk analysis, and so on and so forth. And since China's AI model developed very quickly and is open source, and it can be used cheaply, So the AI empowerment in China in the sustainable finance arena is very evident, and a lot of financial institutions and firms actually benefit a lot from the AI empowerment. I will stop here. Thank you.

Thank you very much. And, Gwen, just thinking about commercial banks more broadly. I was wondering if you could give us some of your views on how capital markets can work with multinational development banks and public institutions to really allocate and share the risks in these nature-smart investments that we're talking about today, especially when we're thinking about currency risk, policy risk, market risks that can make it a bit trickier for pure-play commercial operations to absorb?

I think I'm going to take some of what I've heard from my fellow panelists here and then root them into concrete examples to show why it works, because I think that's probably the most useful. So first, Pivoting from what Wang was saying in terms of policy, that it's stable, that we know kind of where it's going, then here we've seen the positive side of this on what China or what Europe has done within renewable energy and really spurring that industry along. In the EU right now, they're looking at CRCF, so voluntary carbon credits that will go into the ETS. So this will also help in that space. And then if we talk about some of the catalytic capital that we were discussing earlier, there are some examples of that as well. So, for example, we've done some carbon credit developer financing where it was backed by philanthropic money, and then that's how the loan got out in the first place. And without that loan, that lending would, without that philanthropic capital, that lending would never have happened. The third one that I've been harping on kind of all afternoon was kind of this risk, return, and performance conversation, especially for populations or projects where the impact will be heavily felt, so like smallholder farms, et cetera. And for smallholder farmers, it's really too small in terms of ticket sizes for us. So one of the things that we've done, we've done this alongside Banco do Brasil and the MIGA, where The smallholder farmer loans were put into a bigger kind of, out into a bigger platform so that we were able to on-lend to that. And then MIGA helped with some of the guarantees in order to get those loans out to the smallholder farmers. And then the last thing is, well, is the product fit for purpose? Can investors buy this? So we've seen examples of outcome bonds, and the reason why that's successful is because The coupon is something that is part of what institutional investors are looking for. It's a fixed income product, it's a bond, it fits into their allocation profile. That's something that they can buy. And then the returns make sense for them, so they can go up to their CIO and have that purchase made. For structured notes, where there's a payout, for example, we have one that goes into plastic pollution cleanup. this, we can on-sell this to retailers, so private bank clients, people like you and me, we can buy this note, there's a payout that we get, a part of that payout gets then fed into the non-profit that has boots on the ground that's doing the plastic cleanup.

Super, thank you, gwen. And Kaveh, just, you know, Gwen was talking about the kind of the smallholders and thinking about the historical barriers that they've always faced in terms of financial access. When we think about sustainable agri-food systems as framed in the NBSAPs, how do you think we can ensure that new finance flows directly to families and community agriculture?

Yes, it's difficult, isn't it, because of the reason you said, the small ticket size, the aggregation needed. I think that it's more than finance, though. I think that the challenge is beyond finance. Because if you look at many of the success stories, one of the things that many countries sort of scaled back very quickly when the fiscal space was shrinking and what have you, was extension services. A means of actually reaching those very same farmers to advocate for new ways of doing things, new technologies, new drought resilience seeds, whatever it might be. Those extension services were the sort of first to be sacrificed. And then the knock on effect is that they become riskier businesses and harder to invest in. And I woke up thinking of, for no reason, woke up thinking of Brazil this morning. And when I was there last year. We were with a company that many of you probably know, Natura. And we went to visit the farmers that they're working with. And they have a very successful model, right? The business is growing. There's no problem in attracting capital, right? And that capital flows to the farmers. But they had essentially privatized the extension services. They were providing extension services as part of their business model. And that made a huge difference. And they were then guaranteeing the market. They were buying from the producers who were producing in the way that they were advocating for, right? In a nature positive way, as you say. And I think that's a little bit of, maybe that's the enabling piece that you're mentioning. It's not just enabling at the sort of legislative level, at the government. It is the enabling for us also at the scale of the small holder farmers. And that's where a lot of our projects are designed to do, to try to bring in that, sort of bring back some of those elements, including through the repurposing conversation we have, you know? It's actually a critical investment to reinvest in your extension services. That is the means of reaching the farmers, convincing them about new ways of doing things, new technologies that are so critical now to make it climate smart or regenerative or whichever terminology we want to use.

Sue, looking ahead as we come to the end of this session, it would be great to hear your thoughts on where we see the major trends are. When you look out to the horizon, what do you think will affect the reporting landscape in terms of nature-related financial information?

Yeah, good question. I think one of the key things is going to be, I think there's increasing demand from investors for nature information because it's financially relevant. So I think that push has a big effect. I think a major determinant in terms of the trajectory will be the adoption by governments around the world of requirements insisting on this reporting because it's so important for the financial system as well as for broader purposes. So I think the decisions made by jurisdictions are really important here, including using the practice statement that we've just put out for comments. I think that's important. I think another really important determinant in terms of the quality of the information provided and whether it unlocks the system is a point that Shah Gil's made a couple of times. It really strikes me that once you get beyond the smallish number of companies that are really engaged in this space, there's a blank face when you talk to people about what a nature-related risk or opportunity is. And so I think there's a lot of education about what that means. before we get to the reporting, because if you don't understand what we're talking about, you can't provide information about it. And so our document talks a lot about that and the use of TNFDs, LEAP, to help that. So I think that's important as well. I think the last thing is, at the moment, there's a lot of focus on how hard the reporting is, and I understand it's not easy. I'm not pretending it is easy, particularly when you're talking about value chain information. I think there's a lot of concerns about the pressure that could be put down the system. to the small farmers at the end of the chain. So I think it's really important that this global system that we're building from a reporting perspective should help, not have lots of different requests for different information, it helps. The flow of information will, i think, reduce the burden on the end providers of information. But things that help with free access to information, which you mentioned, and also I think technology will help to unlock, you know, satellite imagery, this type of thing is helping to make it cheaper and more possible to collect data to inform reporting, and I think that's also going to be important just to reduce the cost of the gathering of information needed for decision making, that will help unlock as well.

Fantastic. Well, conscious of time. I wanted to bring this session to a close and thank you all for the fantastic case studies. I can only see this bit of the room, but I saw lots of people scribbling with all the different case studies that you brought to life. I think for me, just three messages really stand out. First of all, biodiversity is increasingly a resilience and finance issue, and I think each and every one of you has done a great job in unpacking how protecting nature is not just an environmental imperative, but the economic one as well. Secondly, the sheer volume of opportunities across the real economy and the challenges in scaling them and the importance of the right enabling conditions. And thirdly, the information that surrounds all this, so the need for addressing the hidden risks and shining a light on them through strategic disclosure. So today, this discussion has really reminded us that we can't finance our way to a nature positive future with the economic incentives that continue to reward nature loss. So it's been really great to hear the examples of mobilising new capital. and how we need that to go hand in hand with aligning the existing financial flows. So I'd like everyone here to help me thank the panel in the usual way, and then we will move to coffee.

Thank you very much for the panel. We'll go to coffee break, and we'll reconvene. 1540. And if the panelists can hear for the picture, please.

Okay.

Hold tight, please.

All right, everybody. We're going to start in five minutes, so if you can start getting settled, I'll appreciate that. All right, we're going to go with the next panel, panel number five, insurance, climate risk, and resilience for finance for nature. This is the first time that we do an insurance panel since we had finance day at the convention. So we are very happy to see this group coming together. I will pass it on now to Verena Kraus from UNIPFI who will lead us on the facilitation, and then the floor is yours.

Thank you so much, Johan. Distinguished delegates, dear colleagues, good afternoon. It is my pleasure to moderate this panel today on insurance, climate risk, and resilience finance for nature, and to welcome our three speakers. First, we have here on my right side Fatoumata Boire, who is the Vice President and Chief Risk Officer of the European Bank for Reconstruction and Development, which finances businesses and public infrastructure in more than 30 countries. from Central Europe to Central Asia, the Mediterranean, and Sub-Saharan Africa. Fatumata will bring to us today the Development Bank perspective on this issue. Then I have here Deborah Halberstadt, who is the Special Advisor on Biodiversity and Inclusive Insurance to California's Insurance Commissioner, whose department regulates the largest insurance market in the United States and is among the first to bring nature into the work of a regulator. Deborah brings the supervisor's perspective today. Also welcome to you, Deborah. And for now, we have Thomas Viegas here, Group Lead of Nature at Aviva, who will step in for Claudine, who will join us any moment. Claudine is also chairing the UK Flood Action Coalition, which builds an investment market for nature-based flood and drought resilience. And Claudine or Thomas will bring the insurance perspective today. World Finance Day opened this morning under the heading "From Risks to Resilience." When nature declines, risk rises, and someone carries these risks: a household, a business, a lender, or a public budget. Understanding, sharing, and reducing it is the business of insurance. And moving from risk to resilience is the insurance task of this decade. This panel asks what part nature plays in that risk, how that understanding can become finance for nature and resilience, and what it takes for nature to become part of how insurance works itself. Insurance exists so that no one carries the risk of disaster alone, but that risk is changing in pace and scale. In 2025, natural catastrophes caused economic losses of around 200 billion US dollars. after 380 billion the year before. Only about half of that were insured. And in emerging economies, 80 to 90% of such losses carry no cover at all. That gap is already wide, and as the risk rises, it is growing. Where cover is unavailable or unaffordable, the loss falls on households, businesses, and public budgets. And the evidence shows it is that unusual part of a disaster that can set an economy back. Climate change and nature loss are not two separate risks. They are two drivers of the same loss. A warming climate makes storms, floods, droughts, and fires more frequent and more severe. The degradation of nature weakens the buffer between those hazards and the people exposed to them. Healthy ecosystems, on the other side, regulate local climate and take the force out of the hazard. A reef breaks the wave before it reaches its shore. A forest slows the rain on the hillside. A floodplain gives the river room to spread. So intact ecosystems can make the same storm less damaging. Degraded ecosystems can make it more costly. The households, the businesses, and the public budget never see two risks. They see one flood and one bill. Yet those who assess these risks, insurers among them, have lacked a practical way to bring the condition of ecosystems into their risk assessment. That is the gap the working group for nature that I lead at UNEP-FI set out to close. 15 insurers, reinsurers, and brokers, brilliantly chaired by Thomas Viegas, who is the group nature lead of Aviva as well. Last week here at COP17, actually, we launched a climate-nature nexus atlas. It brings the science of how ecosystem extent and condition shape climate-related perils into form that for those who assess, carry, and finance that risk can act on. Nature is an environmental asset with many benefits for the people who depend on it. Nothing here changes that. What the evidence adds is that nature is a critical infrastructure in our changing climate. And resilience is built in layers. Addressing the drivers limits future hazards. Adaptation and engineered defenses reduce exposure and vulnerability, and insurance carries those losses that remain. Nature really works across all of these three layers. It complements them, but it does not replace them. Seen that way, protecting and restoring nature is also an investment in resilience. And one that can deliver benefits in several places at once. For a country, fewer losses, lower cost of recovery, and of disaster risk financing, more predictable budgets, and steadier sovereign positions. For insurance, risk that stays measurable, less volatile, so that cover can remain available and affordable and reach further. And because insurability also carries through to lenders and investors, homes that stay mortgageable and projects that stay bankable. Delivering the global biodiversity framework is therefore not only a nature agenda, it is a resilience agenda, a fiscal and financial stability agenda. It pays a resilience dividend. One investment in a protected or restored ecosystem can deliver for biodiversity, for adaptation, and for smaller bill after the next disaster. And that dividend is local. An ecosystem protects the coast, the valley, or the city where it stands. So the first dividend of protecting nature is paid at home. Infrastructure gets financed. Nature so far largely does not, and the gap is wide. Investors fund what they can measure and value. And nature's protective value, counted in losses that never happen, has been invisible to most of them. Insurance can make it visible in each of its three roles, as risk manager, by showing what restored wetlands is worth in avoided losses, so that value becomes a return. A risk carrier, as risk carrier by ensuring the restoration and the protection it provides, so that the lender can finance it. And as an investor, with long-term capital of its own, by investing in that infrastructure as it already invests in roads and ports and other infrastructure. So, let us explore this in practice. I'm very happy to see you here, Claudine. So, Thomas, you're a relief. So, let us start with you. Good replacement, though. Claudine, let us start with you. So, insurers have long understood and managed the risk of natural catastrophes. How is that risk really changing for Aviva, particularly as we see ecosystems being degraded? And where do you see a role for insurance in making nature as this critical infrastructure really visible?

Thank you very much, and good afternoon, everyone. I think we're already seeing the impact on customers, on communities, on people on the ground. This isn't something that's coming in the future, it's happening today. And it's only going to get more and more intense as we see The data coming through, some of the climate data, particularly in the UK where the Climate Change Committee did some analysis on that, and if people haven't seen that, is showing that heat is going to increase, flood risk is going to increase, and so on. So I think the role of the insurance is increasingly to understand how to provide resilience. not just to be there, as you mentioned, when the catastrophes happened. And that's a good business reason, because if we don't do anything, something about this, and that's just in the UK, I think it's happening all over the world, then insurance becomes difficult. And when that happens, it means that assets lose their value, and we have then a huge economic problem. So, to be able to create a market, to be able to invest in resilience and provide that for customers and communities, I think is absolutely imperative. We have to do this. One of the things I was going to mention is actually PSI, which is co-chaired by Thomas from Aviva, have launched the Nature Aware Underwriting Toolkit. Now, I think this is really important, because this brings together some data that gives the underwriter a structural evidence base for asking whether degradation or restoration of nature changes the physical risk they are underwriting, and therefore whether nature needs to feature in that risk assessment. that's a massively important change, and that's only just happened, I think it was October that was released. So I think hopefully we'll see some of that information being used, some of that data being used, to actually understand the impact of these things when we're assessing risk.

Thank you so much, Claudine. And just from the understanding of these increasing risks and where the role of insurance comes in moving to the role of bank and how you experience those increasing risks. So you invest in businesses and public infrastructures in economies where risk cover insurance is predominantly thin as well. How are the risks that Claudine is also describing affecting your bank's investment and how you are integrating climate and nature-related risks in your investment decisions?

Thank you, and I'm happy to be here among yourself and colleagues. To be clear, climate and natural risk are part of investment risk, so it's really embedded into it. And if insurance coverage is not sufficient, that means that the loss remain with the clients that we have, and ultimately with us, the lender. So it's a very important aspect of it. If we look at climate risk, we have moved beyond just assessing the risk or just recognizing the issue. We get more beyond that. Actually, physical climate risk is already embedded in our decision. So we make this assessment when we look at the risk management angle, but also on the due diligence that we are doing. We always assess what are the effects of hazard, like heat, flooding, or water stress, and we see what are these impacts on the asset of our clients and also on the business of our client to see if it may have an impact in their ability to operate and also to repay, of course. So this is really already an established approach. Now, if you move to nature, we have the same goal, we have the same ambition, but we are not there yet, because the tools that we have are not mature enough. It's very early stage. But we see that natural impact and dependency are localized. They are sector oriented, sector focused. very specific, and it's very difficult to reduce them to just one metrics, like we have the CO2 emission, but we don't have something like that to assess the impact of nature. But that say does not mean, because we don't have a metric, that we should not track them, report them, and monitor them. So for us, our starting point is to have a strong environmental and social safeguard. So when we do our due diligence, we assess as well the biodiversity impact, and we work with our client to see how we can mitigate this impact to avoid And increasingly, we also look not only at the risk aspect of the risk implication, but we also are looking at opportunities. What are the opportunities that we can find to have a positive biodiversity gain? And we have some example of projects at EBRD that we have financed. For instance, we have a solar project in Romania. The Dama Solar Project in Romania is quite a significant renewable energy project. And we look at this in different angles. Like I said, we look at the risk. We did our due diligence. But let's say the interesting thing about how we looked at this project was that we designed it by including habitat restoration. also include preservation of the species, and we also look at a biodiversity set-aside area. So it's a combined assessment that we have done. This example shows that we can go beyond only looking at how can we avoid risk or mitigate risk, but really how we can make the investment itself more interesting. We are also working, but it's a very early stage to see how we can assess this at a portfolio level. And one thing that is important is that the NDBs are working together, so we are collaborating together, and last year we have issued the the nature finance taxonomy, which is a common guidance that we share among MDB. And it's a good way to showcase and to see how the impact of natural investment looks like. So it's a good signal that we are sending to the market.

Thank you so much. We will come back to some of those activities that you are working on, but my understanding is that you are quite advanced in terms of climate risk assessment. Nature is like an ambition in terms of nature risk assessment that you want to bring in, but there is some data methodology kind of work that needs to be done. But I found it quite interesting when you also mentioned that you look at the impact side and biodiversity impact, environmental, social assessments, and restoration and local sites where we hear a lot from the insurers where the impact and the risk. Today's impact is tomorrow's risk, so there's a lot of kind of connection that's coming through this. But I will come back to this. I do want to move on to Deborah. So great to have you here as well, Deborah. From the lens of an insurer to a bank to a little bit of a macro level now, California obviously has seen some devastating climate-related, climate-nature-related losses, I would argue, who have been felt widely by insurers' households. What has brought, like, an insurance regulator now to pay attention to nature and how you're taking this forward?

Thanks, Verena. It is such a pleasure to be here today. So, as you mentioned, California has experienced its share of catastrophes, and I think one of the themes you're hearing from each of the speakers is both the interconnectedness of the risk and the interconnectedness of the solutions. So, climate change, biodiversity Biodiversity loss, ecosystem and habitat degradation, catastrophic disasters, and economic volatility are all increasingly interconnected forces whose impacts extend across communities and governments and businesses and financial institutions. As these pressures intensify, they really require a fundamental shift and a fundamental reassessment of how risk is understood and managed and financed. And I think California is particularly well positioned to lead that sort of paradigm shift. We have long served as a global leader in environmental stewardship and climate innovation, consumer protection, and insurance regulation. The California Department of Insurance under Commissioner Ricardo Lara has identified this confluence of nature and insurance as a top priority. As a consumer organization, consumer protection organization, and the regulatory agency overseeing the largest insurance market in the United States, we recognize that insurance is a critical piece of the system for funding and financing both climate adaptation and biodiversity and nature protection. And our intent is really to demonstrate through innovation and collaboration and practical action how nature, resilience, and insurance can be integrated in ways that strengthen communities and nature while supporting long-term economic security. So last week, California released its fifth climate assessment, and for the first time, it included a statewide report on adaptation finance. And the Department of Insurance spearheaded both the creation and the inclusion of the report as part of the fifth climate assessment and co-authored the document. And one really critical message that we included in there is that economic prosperity and ecological resilience are not in opposition. They really are synergistic and reinforce one another. And so we need to keep that in mind as we look to nature and the economy. And I am also, I don't know if we have the slide, but I'm thrilled to announce today that Commissioner Lara has officially announced and launched the California Green Ribbon Commission on Nature, Biodiversity, and Insurance. And this is a first of its kind initiative that is designed to better understand how biodiversity and ecosystem health influence risk, economic security, and the future of insurance in California. This commission really positions California among the first in the world of insurance regulators to examine biodiversity through its lenses of risk management, insurance markets, and economic security. It brings together leaders in insurance, conservation, indigenous stewardship, engineering, and public policy to develop practical recommendations that advance our understanding of these emerging connections and identify opportunities to better integrate nature into risk management and insurance decision making. So in this commission, we'll be examining how biodiversity and ecosystem health influence risk, we'll be identifying opportunities for nature based risk reduction. We'll be exploring the role of indigenous stewardship in resilience planning, and we will be developing recommendations that strengthen both ecological and economic outcomes. Thank you.

Thank you so much, Deborah, and congratulations to the launch of the Green Ribbon Commission. Very exciting to see, and I think we're going to dive into this a little bit more after. But I'm going to come back to you, Fatoumata, if that's okay. I think I heard a lot about risk, the resilience case of nature, natural infrastructure, but at the end of the day, investment in nature is still not fully flowing into natural infrastructure. It is below what it is needed. So from DBRD's experience and perspective, Do you think that this particular resilience case that we are hearing now, resilience for supply chains, for operations, could be this additional driver to bring finance into nature?

The short answer is yes, definitively, yes. I think that resilience case are can be a driver for investment into nature-based solution, definitively. And we see this on our investment that we are doing and the interaction that we have with our clients in different country. But it's also, we need to be also realistic about the financing challenge that this can face because Avoiding loss is economically valuable, for sure, but to show it and to see the value behind this is not that easy. It's more easy when you can show direct revenue, but avoidance of loss is not that visible. And I think that we need to do more about explaining how it works. But that mean that to make the resilience project viable, not only we need to have a good structure, but we also to put in place some incentives, incentives for our client, but also incentives for the investor. So we need to find the right balance. I can give a practical example of how EBRD is seeing this. We had a project in Chisinau, it's the River BIC project. And this project is a combination of conventional drainage improvement, but we also add to this project some natural system like using rain garden and tree pits that really show that we can combine both. And this has brought a lot of improvement in the project. So we have improved in terms of the quality of the water, we have improved also the management of water surface runoff. And on top of that, we have created a green area. So it's all going together in the same project. So that means that we should not see investment in nature separately from infrastructure investment. They should go hand in hand, and they are not one against another. They are going together. We can take this into account. Now, the challenge is that we are able to demonstrate on the case by case, on the project by project level, but the next move will be to scale. So we have shown that it is working, but we need to go to the next level and to scale it. And to do that, we need to have a concrete pipeline that will be able to attract investor to invest with us. And there, it's where the multi-development banks can help, because we can use grants, we can use technical assistance to work with our client for the preparation of a project. And when we do that, after that, we can also de-risk the investment with a guarantee, with a first loss structure as well to make sure that we can cover part of the risk ourselves. We can also use green bonds or sustainable linked debt or loan to support the investment. But we can't do it by our own, so insurance also are very much welcome to join. And I think that the value of insurance is to show the evidence of risk reduction, to make them more visible. That will be important. For EBRD, we are also working with mobilizing private sector. It's a very important thematic that we have and strategic move that we have decided to do. So we can make investment more attractive for private capital. We have some instrument like risk participation that we have launched. find an opportunity to use those instruments also for biodiversity or nature financing. But again, we have to work also with, of course, with the government, because even if we join forces, we won't be able to do it by our own. So we also need to work with governments to work with them on their plan in terms of what they want to do in terms of diversity.

Fantastic. I picked up three things that I hear a lot and have conversations with the insurance with. First, the avoided loss perspective, and that's exactly what we have been working on with the insurance working group for nature on, really understanding how the ecosystem condition can contribute to risk and also could contribute to avoided losses, to really define this kind of standardized methodology that hopefully will bring the visibility. That was my first kind of thing that I thought about. Then the second one that I really like is where you talk about this kind of hybrid infrastructure project, where you think about infrastructure for adaptation, but also with a nature component. And when you mentioned rain garden, I had in my over here, Hiroko from MSID, who is working very heavily on rain gardens also in Japan. So there's a lot of that thinking as well from the insurers, how they can bring in that lens. And then the third part that is going to bring me back to you, Claudine, is really about the kind of structures that will be needed and where insurance could also play a role. Claudine, I know you're very passionate, I think, about the UK Flood Action Coalition that you are chairing. Would you like to kind of explain it a little bit, where exactly those different stakeholders come together for a structured approach for nature-based child and flood resilience?

Yes, I'm very happy to. This is my pet subject. So I think finance can't solve this on their own. We're dealing with a systemic problem, so you've got to bring the system together. And that's what we've done in Flood Action Coalition. We've brought together large landowners in the UK, we've brought together the insurance companies, the banks, but also large infrastructure organisations, as well as those who can put together a really good data platform. So bringing that together means that we're working on our goal is to invest £1 billion in the UK by 2028 to make UK a water resilient place. So this isn't just about flood, I know it's called Flood Action, but it's about water resilience. It's also about drought and et cetera, because when you solve the water issue in a region, you're solving for all of those things. So we are creating a market to make nature an infrastructure asset. When you build hard infrastructure, you build a wall for flood risk, you know how much that's going to cost, and you can invest in that. At the moment, nature is not seen as that kind of infrastructure. So to make that happen, we need to create, well, I may say, who's the customer? Who's going to buy this product, product being really wetlands? And in order to scale that, we need to think about it at very, very regional level, not just very local river catchment. So the catchments across a whole region, and the people who benefit from that, or the organizations that benefit from that, are infrastructure organizations. are regulated organisations who are able to invest in things that will reduce the risk for them. So by that I mean water companies, for us, the Highways Agency, Network Rail, National Grid, all of these organisations at the moment are individually paying for infrastructure to reduce the risk for them, because if they don't do that, their rail floods or the roads flood, and that costs money to deal with. So what we're saying is by creating the right policy framework, all of these regulated organisations can invest in nature-based solutions at regional level, together in a pool, which means that they're reducing the risk for all of them, not just one of them at a time. So this makes sense. We've created two demonstrator projects now, one in Greater Manchester, that's a flood risk project, and then one in Cambridge, and Cambridge is a drought issue. So they're very different issues, but dealing with the same water resilience. They're both 100 million each at the moment. So hopefully by the end of this year, we'll be able to show that finance is actually flowing and actually creating those sponge cities, if you like.

I think also a bit of Our Ramsar wetlands, our accreditation is planned for one of these activities, right?

Yes, that's a separate thing, but it is dealing with the same issues. Yeah, Bristol will hopefully be the first UK Ramsar accredited wetland city.

Oh, fantastic. I'm going to watch a little bit of time because we have...

That's the model, by the way, that shows you what I've just described.

Fantastic. We have 10 minutes left, so I'm gonna be a bit smart about the questions. I'm gonna quickly stay with you, Claudine, before we kind of move through the rest of the panel. My kind of next question would have been for you a little bit around the mainstreaming of nature in insurance then, right? So we have spoken a lot about, as we in the working group often define it as insurance for nature, and then nature, we are practices for nature. Insurance aware, nature aware practices for nature. So how can you really start integrating nature in your core businesses, investments, and underwriting businesses? How are you approaching this? And where is like really accounting for nature in those processes helping to transition?

Yeah, good question. And I think the operative word here is core, right? It's got to be, nature can't remain a separate sustainability conversation. It's got to be integrated into informing how businesses make decisions. And to do that, I think, really understanding the dependencies, the impacts, the risks, and the opportunities really matters here, and ultimately informing our underwriting and our investment decisions. C, being able to get that information from organisations becomes really important. So I think transparency around those is important for us as an investor and as an insurer to be able to do that. I also think that the nature of transition is not only about risk and constraints. Addressing those drivers that nature loss will require change across the whole economy, creating risk, but also there are so many opportunities, one we've just described, in terms of making nature a critical asset. I think that's what will change things, not looking at nature as something that we need to value and fund, but it is something we just have to make sure is a part of all our business decisions. And creating models like this helps us do that.

And I also wonder, and I'm prone to kind of get into this a little bit too much because I'm very excited about insurance and nature, like how the close relationship that insurer has sometimes with customers and also how how insurers are valued in many ways in terms of the protective measures that they give customers, how that could also help with engaging customers on risk reduction resilience. I don't have time for the question, but I will pick it up at a later point. But moving on to Deborah also with the consumer protection resilience lens a little bit, you just announced the Green Ribbon Commission, right? And I know it has multiple pathways. Can you just explain those three pathways in two minutes? and really focus also a little bit on what Patumato mentioned earlier around where regulators really can play a role in kind of bringing those stakeholders together in the convening aspects.

I have three minutes.

You can have three minutes.

Okay, so we do have three strategic pathways in our Biodiversity, Nature, and Insurance Green Ribbon Commission. The first pathway is focusing on the relationship between ecosystem conditions, biodiversity, and the long-term stability of insurance markets. So in that, we're going to be exploring how nature loss, economic ecosystem degradation, and declining ecological function influence risk exposure, insurance availability, and financial resilience. So we're going to be identifying opportunities in California to better recognize and account for nature's risk reduction benefits within the risk assessment, underwriting, and resilience planning frameworks. The second pathway recognizes that Indigenous communities possess generations of experience in stewarding landscapes and in maintaining ecological health. And so the Commission will be exploring how Indigenous approaches to stewardship and the ecocultural economic principles of respect, relationship, reciprocity, and responsibility can inform risk reduction and community resilience. And our goal here is to really promote meaningful dialogue with Indigenous communities and co-create opportunities for pilot initiatives that integrate Indigenous knowledge, ecological stewardship, and risk management. The third pathway focuses on identifying opportunities to strengthen resilience through investments in ecosystem protection, restoration, and stewardship. So in this pathway, we'll be exploring how public and private capital can support strategies that simultaneously advance nature, reduce risk, strengthen resilience, and support long-term economic stability. And here again, we're going to be focusing specifically where in California. California, investments in nature could generate measurable benefits relevant to insurance markets, disaster risk reduction, public safety, and economic security. Our goal is to help decision makers better understand where and how investments in California's natural systems can produce the greatest resilience for communities and for economies. As far as the So these are the pathways that the state of California has opted to take and the approach that we have chosen to follow for integrating nature and insurance. But there are a multitude of ways that an insurance regulator can accomplish this. So the UNDP and the Sustainable Insurance Forum today are launching a roadmap for insurance supervisors to navigate nature-related financial risks and opportunities, and through this roadmap, They are providing guidance for insurance supervisors to understand the connections between everything we've been talking about, ecosystem degradation and insurance investments, underwriting, and claims. And they're providing really practical steps for insurance supervisors through these five flexible phases that can be adapted to different mandates, different markets, different resources, without creating any kind of supervisory requirements. These are just kind of approaches, and they say supervisors can start from where you are. You can assess your internal capacity, you can assess the existing climate work you're already doing, they could be linked, existing supervisory processes that could be leveraged. And so this is a new opportunity for insurance supervisors to kind of have a vision of where they could go and what they could do.

Thank you, Deborah, for making all the links to this like third piece here. Please have a look, there is also a QR code to download the report. I was told I might be able to run over three minutes, so I do want to give the last words to Fatoumata, please. There is one area that I think is very important, sometimes even in the conversations that we have in the insurance sector, still a little bit underlooked in terms of really the underlying transition of the sectors that are ultimately also contributing to nature loss, right? And I know this is a challenging question for the last two minutes for you, but maybe you can shape it into a quick response. After all these decades that you have been financing economic transition, what are the learnings that we really can take away to finance the transition to a more nature-positive economy?

In summary, I will say that the important point when we want to see changes is that we need to have a policy, economic, finance, and capabilities line up. This is very important if we want to make some changes. From experience, we have seen that for the climate, for instance, We have seen an acceleration of impact, a negative impact of climate. At the same time, we have also seen that the investments have accelerated. We have seen that the cost of renewable energy have decreased significantly. So this has been a factor that helped because the policy environment has been put in place because the investors were there. this in parallel was a good way to increase the pace of investment in renewable energy. For nature, we are expecting that it will follow the same path, but hopefully it will be more quicker because we can learn from what happened in the climate side. So hopefully, we will reach the tipping point more quickly. quickly than we have done for the climate. But we also see that our clients are very keen to invest and to move in the right direction if they have the environment, so if the policy environment is there, if they have the financing, so if the investor can help them there, so they will move in this direction. And I think that's event like the COP here, who is bringing business, policy maker, finance institution together. It's a good opportunity also to interact and to see how we can accelerate the path.

I really appreciate that, doing this in two minutes, and I'm going to be wrapping up now. Thank you so much to Fatumata, Deborah, and Claudine for your contributions today. I think how we set up the three themes for this panel, it was very much confirmed for me today. Three things. First, nature is a critical infrastructure. We do need to put a value on that critical infrastructure. Second, insurance can contribute as risk managers and risk carriers, and we see evolving examples where really there is a financial flow that can be brought together by an insurer. And then also, thirdly, insurance has really begun integrating nature into business decisions. But what really is needed is ambition needs also enabling conditions in terms of the policies, the regulation that will need to be there. So I began with insurance as, you know, the business of moving risk to resilience. So taking action for nature is also taking action for resilience for all of the economies that are present here today. So thank you so much for the speakers and the organizers of the Finance and Biodiversity Day.

Thank you so much. Thank you very much, Verena, and thank you to our fellow panelists. As we get ready to the next panel, I would like to call to head of the table our facilitator for the last session for the day. Thank you very much for holding with us today, Ms. Suprabha Bhattacharjee, Forest Stewardship Council International Director. I would also like to call Mr. Gabriel Acevedo, Head of the Unit of the IDB, Pierre Bourdeau, Director of the UN Global Coral Reefs, Jennifer Tully-Corpus, Resource Mobilization Working Group Co-lead, Dr. Anthony Nyong, Director of Climate Change of the African Development Bank, and Karin Herzberg, TFFF Board Co-Chair and Senior Advisor to Norway's International Climate Forest Initiative. So our last panel will touch on financing critical underfunded ecosystems and biomes. I will pass it on to Subrata to kick us off.

Good afternoon, everyone. Thanks for staying. It's a long day you've had, and thanks to UNFBI and our organizers for creating this space today. So, this session is about financing of critical and underfunded ecosystems and biomes. At its heart, the problem we are looking to solve is that one of financing biomes and ecosystem services by socio-ecological systems when markets for a lot of them don't function well And then markets don't exist for some of these ecosystem services. How do we finance these ecosystem services without going into over-extraction and also without shutting out the indigenous peoples, local communities, and others who are very critically dependent on these ecosystem services? So ultimately, we will be talking about multiple gaps. We have a very distinguished panel here bringing to the table multiple perspectives, and I hope for a very detailed discussion here. To our speakers, I will go in order addressing a few gaps. To you, Gabriel. The question is the gap between standardization, which the investors are demanding to go to scale, and access. Over-standardization means that the local communities, indigenous peoples, they are shut out of those systems. They just cannot access. So from your experience in the Amazon bioeconomy, how do we get the ecosystem services funded? without over-extraction, and how do we bridge the gap between standardization and access? Four minutes, and then we'll come back to you.

Thank you, Suvira, and thanks everyone for dying hard, staying until the last session. So this is fantastic. I want to address the questions in two aspects. I think the first point I want to make is quite general and not really objective, but it brings a lot of our own experience. I think we have been talking too much about standardization, which is necessary, it's important, but many times I feel that we use the need for standardization as an excuse not to advance with action. In other words, that

The very good becomes, the perfect becomes the enemy of the good. We do not have time, the luxury to wait. So we need to work with the tools we have, move ahead, and continue to fine tune those instruments, the KPI, the measures, as we learned. And that requires taking risks. That requires first comers. And I hope there will be a premium, I am sure there will be a premium for first comers. As MDBs, multilateral development banks, we want to position ourselves much more as market creators in this space and financial conveners as opposed to only providers of capital. If we limit our activities as provider of capital will be falling short. So market creators and financial conveners is really important. Now, back to my first point, scaling biodiversity or bioeconomy finance requires some level of standardization, but even more so, credible financial frameworks. So I think we need to play with that duality. Thirdly, the scales depends on connecting international capital with financial institution and viable investment pipelines. We need to move away from the project by project conundrum and think about financing ecosystems. Fourth, and I still have a couple minutes, financial innovation must translate into direct access and equitable benefit for indigenous people in local communities. And this may sound like rhetoric. It is not. There's very good examples out there, and I can speak from our own experience. We finance a program called Minga. Minga means in the Kichwa language from the Amazon, collaborative work. And we are the first MDBs that created a fund, 10 million dollars, that disburse directly to indigenous communities. There's no middle man. No, the money flows directly to indigenous communities, and I can elaborate later. Does it require taking risks? Yes. Does it require a lot more hand-holding and capacity building? Yes. But if we want to advance this agenda, we need to put our money where our mouth is, right? And finally, my final points to be within my time. The next frontier, I believe, is moving beyond, as I said, individual by economy investments towards financial ecosystem as a whole that can benefit an overlay of different beneficiaries. It has public good benefits from governments and regions, it has benefits for private companies which can be large, medium, small, but it also brings direct benefits for local communities and beneficiaries. And more than benefits, local communities and indigenous communities need to be part of the decision-making. They need to be seen as part of the economic process. not simply as beneficiary of the process. They need to be involved, and if we want development to be equitable, it requires that we make that change in our own approach to dealing with these projects. Thank you.

Thank you, Gabriel. That is our some, right there, you have some very, very key points packed into four minutes. Very well done. And there are several threads that I want to pull on a little bit here, but just as a heads up, Jennifer and Karine, on the issue of direct access, we will pull these threads together with your interventions. But coming to you, Pierre, on marine ecosystems. Now, Gabriel already told us that for him, standardization is not as big a barrier as we make it out to be. Your problem is slightly different because you're working with very tailored solutions in different, say, in case of an ocean, compared to a coral reef and other marine ecosystems. How are you bridging the gap, the need for standardization and the need for tailored solutions and instruments.

Thank you, Subha. Yesterday, we held here a coral reef roundtable. And one of the message that came through clearly was that coral reefs are tipping now. They are the first part of the Earth ecosystem, Earth system to cross a climate tipping point. And the second message that was that coral reef are assets, and we have to change the way those assets are valued. That makes reef different. Instruments built for forests or for carbon don't simply transfer to reefs. If we take blue carbon, mangroves or seagrass store carbon, but coral reefs don't. So blue carbon alone will never finance a reef. We need instruments that pay for what reefs actually do. They feed people, they protect coasts, they support tourism. Every reef faces its own mix of pressures. A reef in Indonesia is not a reef in Belize. So in Indonesia, for example, we use a debt conversion. In the Mesoamerican Reef, a guarantee facility and parametric insurance for small-scale fishers. Or in Papua New Guinea, a credit line to a local bank. So I don't think the choice is really between tailoring and standardizing. develop the instruments, but standardize what we measure. That's where comparability comes from. For example, an investor doesn't need every deal to look the same. What they do is they compare results, they compare risk, and financial returns. What institutional capital needs, it's one shared picture of the priority reef, or intervention and investment ready needs that are tied to verified results. So at the Global Fund for Coral Reef, we use the same reef indicators across 22 countries, such as live coral cover or fish biomass. We now hold data for for 354 reef sites, and we report against at least 11 targets of the global biodiversity framework. Now, my second point is also that institutional investors don't buy small deals. They buy portfolio. So the answer is aggregation. Many small, tailored, local deals pooled into vehicle big enough for institutional capital, and that with the right derisking stack. So for example, our last investment with the Global Fund for Coral Reef was in a junior tranche of the Outrigger Impact Fund. So our money takes the first risk, and at least 25% of the fund will go to reef-positive business in the Pacific Island states. So one lesson from the GFCR portfolio is that using grant alone cannot get us where we want for color. If we need tools that can de-risk investment and re-amassable finance so that every dollar can be recycled into the next opportunity. And that's why we are building an accelerator with a flexible capital base that can grow over time into a revolving investment vehicle. And so just to conclude. I think that the architecture that is needed is that it's for public and philanthropy money to take the first risk, have common metrics to give comparability, and then pooled vehicles to give the scale. And if risks are assets, then let's finance them like assets. And that's really, I think, the way with the Global Fund for Coral, if we are trying to go forward.

Very interesting. So we already heard from both Gabriel and Pierre that standardization, that we've made our bugbear, is actually not the bigger problem. The way you're dealing with it is standardize what you measure, the outcomes, and deal with the larger demands of the larger institutional investors through aggregation, building portfolios. So important points, both. Jennifer, before I even come to you, I want to ask Dorsuma to bring in your experience from African Development Bank, especially with the Green Wall project and other initiatives around the bioeconomy. How do you bridge that gap between extraction, the economic part of the bioeconomy without just enabling the funding of those ecosystem services that have markets? In other words, how are you approaching ecosystem services that don't have mature markets?

Thank you very much, Subra, for inviting us first and for the question. First, we recognize that an ecosystem or biome can have significant economic, social, and environmental benefits, but yet they cannot deliver cash flow. As you may know, let me just provide a context to what I'm saying. The African Development Bank operates in the African continent, and as you know, Africa is very rich in biodiversity. including forests, wetlands, rivers, drylands, mangroves, coastal ecosystems, etc. But yet the continent is what we used to say in the African Development Bank, cash poor. And this is because there is a, we consider first, you know, investing in ecosystem as a public good. And for us, financial returns must be viewed from that perspective of providing of public goods that those ecosystems deliver. So the question for us is, can we monetize everything nature provides? And how can we match our ecological and development needs with the right financing structures? So let me maybe share a couple of examples of projects or programs that we have at the African Development Bank to illustrate that. You mentioned the Great Green Wall Initiative, which is actually the largest ecosystem restoration program in Africa that aims to restore 100 million hectares of land, sequester 250 million tons of carbon, and create 10 million jobs. And in 2021, we have committed $6.5 billion to the initiative. As I speak, 3.3 billion has already been deployed to large scale ecosystem restoration programs across Sahel, Horn of Africa, Southern Africa. And the lessons we learned from this experience tells us that you first need to provide concessional finance grants because of the public good nature of the investment I mentioned earlier. And you also need to provide some technical assistance resources in the form of project preparation resources, but also to build country implementation capacity. And we came to recognize that across the Great Green Wall corridor, there are also significant value chains that are yet to be fully harnessed, including baobab, honey, moringa, and also agroforestry and non-chamber forest products. And those value chains generate significant, have the potential to generate financial returns. They also have the potential to create a market where businesses can deliver restoration services. There is an example of project we have been implementing in Togo and Burkina Faso to support the share communities in those two countries. to link income opportunities with community-led park land management. And this experience also has been for us a way of helping businesses to deliver restoration services. And for us, it's a good model to use grants and also as part of public goods functions, supporting public good functions. while also using enterprise finance to generate revenues, especially in the credible value chains that I have mentioned earlier. We also learned some experience from another program called Congo Basin Ecosystem Conservation Support Program in Central Africa. And through this program, we have provided grants and concessional financing to both national governments, but also local communities. And we believe that This experience could help shape some emerging global initiatives such as the TFFF, which is aiming to reward standing forests and also with dedicated financing to indigenous peoples and local communities. We have been also very active on adaptation at the African Development Bank, recognizing that adaptation projects have significant economic returns. but limited financial returns. So to conclude that, I must say that to bridge the gap, we need to provide first resources as part of public goods, and then also to leverage additional financing to support enterprises that are working in that space. And we have launched, just to finish on that, we are also exploring innovative instruments such as the park bond model, building on existing experiences such as the 150 million rhino bond in South Africa, aiming to mobilize 300 million to support West African protected areas. on their agenda on delivering ecosystem restoration services. So moving forward, we need really financing structures that last beyond project cycles with fair benefits to reward local stewardship. And as I said earlier, we need to strategically use public funds for public goods functions and leverage private capital where credible financial returns exist. Thank you.

Thank you. Starting where you left off, about this mix of using public funds, but then leveraging private capital where it makes sense. We heard Pierre talking about them taking the first risk, and you asked for starting with concessional finance, while Gabriel mentioned being a market creator and a financial convener. So what I'm hearing across speakers is the need for these different mixes to come together and build a whole ecosystem within the financial architecture. With that, I actually want to go to you, Karim. The TFFF is one really interesting, innovative initiative after a long time within the sphere of public finance? Mainly, it is a shift from project-based short-term finance to the longer-term outcome results-based finance. What are your lessons learned from earlier initiatives, for instance, the REDD+ with results-based finance? And how do you, if in your intervention, you could reflect on the points that have come out from the other speakers as well?

Over to you.

Thank you, and thank you so much for the question, and thank you for inviting me to be at this panel. I think it shows a lot about how you need to put together different elements to deliver as a whole. You cannot just pick one solution or one instrument. Now, as you said, the TFFF is innovative in particularly the approach to raising finance and creating a long-term mechanism, but in terms of being results-based, we actually have a lot of experience. And I think it goes back to what was said earlier, standardize what you measure, the outcome, and this is really the premise for both REDD+ and the TFFF. REDD+ having been developed as a mechanism under the Climate Change Convention that rewards tropical forest countries for reducing deforestation, calculated as emission reductions. And I think the most important strategic element in that results-based approach is that When you pay for the results at a higher level, it is a much more strategic form of finance for the tropical forest countries. The results have been delivered, deforestation is reduced, but the use of those funds can then be in a much more strategic and flexible way than if you go project by project. They can be used to support the more long-term national strategies that can really underpin a change. from more deforestation-driven economies to more forest-protective economies. And we have seen a lot of examples of this in the bilateral cooperation that Norway has had with different countries, with Brazil, Indonesia, Colombia, and so on, as well as others having worked in the same sphere. Under the Brazilian Amazon Fund, for over a decade, support has been provided to local and national communities, institutions, and actions, such as the forest monitoring, building new economic opportunities, supporting land rights, land management issues, but based on the overall national strategies. In Indonesia, based also on receiving results-based finance, they are investing in the actions needed to meet what is called the 4LUNET sink, which is Indonesia's overall nationally determined contribution under the Paris Agreement, which really is very comprehensive. It addresses forest management, landscape management, and forests as well as ecosystems such as mangroves. And through the National Environment Fund, which receives results-based finance, they are supporting community forestry, mangrove restoration. Those are just a few examples. Similarly, in Costa Rica, results-based finance has been the basis for Costa Rica to be able to introduce and implement a system of payment for ecosystem services towards landowners. And so you see very different uses of results-based finance, but they're all based on the same model. They receive finance for having achieved a result and outcome in reducing deforestation. And it is managed and channeled through national institutions, a national environment fund, which is what Brazil and Indonesia have. Costa Rica has a similar model. by being results-based, by investing in these solutions, they can also maintain and propel forward the actions that they implemented in the first place. And the same logic, in a way, applies to TFFF because it will be based on finance for the area of tropical moist forest that is protected. So I think there are a lot of Similarities, under TFFF, because it is the area of forest protected, it is much, you could say that it's more directly related to biodiversity protection, and it is a reward for the standing forest, not for reducing deforestation. So it's very complementary. But I think a lot of the experiences around how do you manage the funds? Do you channel this through an existing environment fund, a national fund, similar to the models that we have seen in some countries? Do you establish new institutions? So there are some differences in the institutional setup that the TFFF will be delivering, but I think a lot of the strategic element will be similar and is an area where tropical forest countries can really build on what they have achieved so far, the national systems and institutions that they have put in place, and to be able to complement, for example, red plus finance with TFFF, with other types of financial instruments, such as the one we have heard about from the African Development Bank. I'll stop there. Thank you.

Thank you, Karin. So, What's really interesting is, on one hand, Pierre talked about aggregation. The examples you gave totally upends the model and changes the very incentives for policymakers. And it's not a bottom-up aggregation, it's a totally different way of initiative management. It's not even project, so very interesting. Jennifer, you've now heard from multiple speakers about the examples where communities, local communities, Indigenous Peoples have received direct funding. And yet we know that it's this overlay of governance and finance is the hardest and most complex when it comes to the rights of Indigenous Peoples and local communities. How would you like to think through this issue in the context of scaling finance?

Thank you very much, and it's great to come last in this sequence of speakers because then I can reflect on what has been already presented. But I wanted to start with saying that, of course, From the presentations, it's clear that Indigenous Peoples do have something to contribute to the work that we're trying to accomplish here. The science is clear that Indigenous Peoples, and of course Indigenous peoples and local communities are very diverse. We do not also make claims that all Indigenous peoples conserve. There are also some that have made their decisions through their self-determination to engage in other kinds of activities. But in general, the science is clear, and I think from the presentations it's clear, that Indigenous peoples are partners in this work. I would like to say that many changes are already happening, as is evident. And as we know, well, there is a program of work on Article 8J of the Convention that is being implemented by the newly established subsidiary body. And element eight of that program of work includes increasing access, including direct access to finance by Indigenous Peoples, to funding, sorry, to be precise. And we had a very interesting in-depth dialogue at the first meeting of the SB8J that identified the different pathways and the different changes that need to happen in the global financial architecture in order to make sure that more finance flows to Indigenous Peoples. Increasingly, we see philanthropy engaging in trust-based philanthropy. working with indigenous peoples at large scale. 1 million a year, some even with 6 million a year in the case of Aman in Indonesia. And they have been able to deliver good results. So this is one thing that needs to be recognized. There are indigenous peoples who have established their indigenous peoples and local community led funds that now have the capacity to absorb large amounts of money and implement properly and deliver results. So that's something that was, the proof of concept was through philanthropy, through trust-based philanthropy. Now, increasingly, we see bilateral money also investing directly with Indigenous peoples organizations. And like the Podong initiative that was funded by Canada through IUCN in partnership within the International Indigenous Forum on Biodiversity. And maybe the field of most exciting changes comes with the multilateral system. So the Green Climate Fund had its first global conference with Indigenous Peoples this year, and they articulated some pathways to increase the profile of Indigenous Peoples and the resources flowing directly to them, including readiness investments to ensure that Indigenous-led funds are ready, but also including accepting an implementing agency that works exclusively with Indigenous Peoples and local communities. So potentially, this is an entity It's the International Land and Tenure Facility that could facilitate direct access at really high levels. And then, Maybe I'd like to end with saying the GEF 9 replenishment had also very important decisions this year. They increased the dedicated window for work by indigenous peoples and local communities from 25 million in GEF 7 and in GEF 8 to 100 million under GEF 9. And in order to deliver that, they have opened GEF agency expansion, basically, and potentially there could be one or not more than three agencies that would have expertise on indigenous peoples and local communities. And we're hearing that the indigenous-led funds that have this big capacity are interested in applying for that GEF agency expansion. We also heard a portfolio-wide aspirational target. So now it's no longer just the GBFF, the entire portfolio of the GEF has committed to 20% for actions led by indigenous peoples and local communities. So it will require partnerships with government, partnerships with GEF agencies, and partnership with this potential GEF agency that focuses on indigenous peoples. So maybe I'll stop there, and maybe the last message is that it's important to recognize that these changes have been happening, and that we're interested in continuing to see these changes happening, and maybe to relate it to the discussions here, the negotiations, the call is to the parties not to stifle or prevent this kind of evolution from happening. Thank you.

Jennifer, thank you for sounding that voice of hope and showing that change is happening. Can I go back to this point you made about the proof of concept that trust-based philanthropy has brought. Now there are Indigenous peoples who have the capacity to both absorb and deliver, and there are multilaterals who are willing to work with implementing partners who work exclusively with Indigenous peoples. What should be done to extend these benefits? avoid the potential of them being concentrated? How do we make sure that more and more grants don't go to the same communities, same groups, through the same implementing partners, but we really spread the benefits?

Thank you for the question. I think this is one question that the GEF 8 Heart of Conservation initiative is trying to answer. So this GEF 8 dedicated window is looking at supporting indigenous-led and local community, indigenous peoples and local community-led funds to build their profile so that they become trustworthy, they become recognized as an important player in the ecosystem. And the idea of indigenous-led funds is that they disburse the money further to communities who may not have the capacity, the same capacity as indigenous-led funds to fulfill the reporting requirements, the fiduciary requirements, and so forth. So this is the model actually that is being tested out, indigenous-led funds, and the idea is that these funds would bring them down now to more communities that need them.

Thank you. In this context, I want to go to you, Gabriel. You talked of market creation, very different from market making, as in creating a market where there wasn't any. Can you elaborate on how you would go about doing this in the context, say, something that Pierre might be facing or something that Jennifer might be facing? Because, like she said, indigenous communities are very diverse. We know marine ecosystems are very diverse. He mentioned how different one was from another.

Sure. I'll try to elaborate. But before I do that, if you allow me 30 seconds on the last point, your question to Jennifer. We need to be very careful, and I want to be provocative here. I'll get to my answer, but it couldn't help me. When we say that we need to make sure that certain communities do not receive one or a second or a third grant, my experience shows that do not fully subscribe to that principle, and I'll tell you why. I think the first generation of projects, be it for philanthropy or ourselves in the development world to serve these communities, they were developed with the lenses that we have, with the experiences we have in other markets. In my general sense, my own experience, many projects that we were overly optimistic with respect to how soon can we get to certain points. And if we simply say we don't give a second grant or a third grant, we may leave potentially good projects mid-term. So, So we need to be careful with that. We need to ask ourselves, is it a problem with the project, or is it a difficulty of our own overly optimism in achieving results? So I know that was not my question, but I couldn't help because I think it's a dangerous trap when we say we shouldn't, no, we need to, and that's why I like the idea of direct dispersing funds and all of that. On the market maker. And I think it relates to many of the things that were said when, you know, Karen mentioned not like a multitude of instrument, and Pierre mentioned also, for instance, institutional investors, you know, don't buy project, they buy portfolio. I would add a challenge to that. The big institutional investors today, they have certain rules, like we've been talking to some about the Amazon, they want a minimal ticket of 200 million. but they cannot have more than 20%. So mathematically, this means at least a billion dollars plus, right? So how do we achieve that? And I think the question there is, number one, you need to have Specificity, but at the same time, flexibility. And I'll cite an example. We're the first ones looking at bioeconomy in the Amazon. And we felt that we needed a dedicated financial instrument for bioeconomy. So we created, in partnership with the GCF, the Global Climate Facility, a $600 million fund for biodiversity in the Amazon. So that's very specific. where the flexibility comes into play, what can be financed under that specific. So we need to combine something that is specific to certain aspects that currently are underfunded, that need incentive, like Pierre says. Now, who takes the first loss? Who pays for the technical assistance and the capacity building? Where could the commercial strengths come into play? But at the same time, If on underdeveloped sectors, you open the scope too broadly, no, the easy, low-hanging fruits are going to get all the money. I'll give you an example. Let's go to climate, right? You say, well, we've been very successful in climate finance, and there's nothing wrong with what I was going to say, but energy has captured most of the value. How much blue environment has captured compared to energy. There's nothing wrong, but it happened because energy is the low-hanging fruit for the commercial sector, for markets and stuff. It makes sense. So how do we incentivize the taking of the fruits that are not hanging so low? So that's the specificity that I'm talking about. And I think regional Development banks or multi-development banks have the role of inducing that kind of thinking and be the agents of promoting these arrangements. To finalize, one other thing that I want to say, when you do something like this, Sometimes we can be successful even tapping into secondary objectives. I'll give an example. This fund that we created, we embedded a performance-based component of resilience for NTPF process, so non-timber forest projects. Because we not only want to incentivize, but we want those markets to be resilient. So depending on your resilient component, you can have other incentives. So this was a secondary objective that we're able to achieve in some point. So long story short, I think being a market convener means forging partnerships, being innovative, taking risks, right? And understanding the sector or the geography that you work with. For us, for instance, within the IDB, which is Latin America and the Caribbean, so it's not global. We have the Amazon, which is very specific. And what we try to do, we try to have boots on the ground. We try to have permanent contact with indigenous communities, with governments. We try to understand the landscape in which we operate so that we can be a convener to others. We can help others. Our goal is not only to develop lending opportunities for the IDB Group. Our goal is to open doors for everyone who share our vision, in this case, towards the Amazon.

Thank you, Gabriel. Karine, can I ask you to build on what Gabriel said and talk about how you're thinking about implementing direct access? tools, what measures you would take for this commitment to actually land with the right people at the right scale, building on what Jennifer and Gabriel have said.

Thank you for the question, and it's a big question. I think I would start out with two things, and just coming back to the TFFF, because One of the criteria under TFFF is that at least 20% of the forest payments are canalized to indigenous peoples and local communities. And this has been an integral part of the development of TFFF, and indigenous peoples organizations, local communities organizations have been participating in actually designing the TFFF. And I think that makes a change from other programs and approaches in terms of the depth of engagement and working together, basically, to develop what the TFFF should look like, including how it can establish a system that can give direct access to those groups. Having said that, It doesn't mean that the job is done, but it does reflect two very important issues, that more funding needs to go to the local level, to the implementation of the measures and strategies and opportunities, and that it should also be managed by those communities. The approach taken is perhaps, when, perhaps the difference is that when you, design a system from the start, based on the inclusion of indigenous peoples and local communities, on the establishment of governance structures that can channel these resources directly to the local level, it changes how you develop the overall structure. And so there is a requirement for a governance structure at local levels with a national steering committee consisting of the organizations of indigenous peoples and local communities, they will set the priorities for their allocation. This is hugely important. Not to say that it's easy, and it was said that, you know, there are large differences within countries, between countries. This is not sort of a one-size-fits-all, but these communities and organizations for indigenous peoples, local communities, depending on the context in each country, need to come together and find out what does it mean to be in the National Steering Committee? How do we set this up? How do we develop the procedures to enable this to move forward? And there are also some experiences with that through the territorial funds, through some of the REDD+ programs where Not in the same, perhaps, systematic manner that this has been directed to local communities and indigenous peoples through direct access, but there are experiences out there. I think we need, perhaps, more systematic understanding of what those experiences are to be able to learn and to be able to share those lessons more broadly. To my impression, it's a little bit fragmented. Some people know these experiences and examples really, really well, and others don't really know them that well. I am hoping, and I do believe, that in the further development of this system under the TFFF, this will happen because there will be a range of consultations, there will be and advisory council for indigenous peoples and local communities. So it's built into the structure from the start. I think that's the main issue here. Thanks.

Thank you, Karin. It makes me think almost of an Elinor Ostrom kind of a study of governance practices, bringing that together to build a figure out where the patterns are. But that brings me to you, Darshuma. You talked about leveraging local initiative, business initiatives, be it in the NTFP space, non-timber forest products, or other businesses, and using that to drive restoration. Has there been any thinking on actually using the local communities to build that governance, how they will engage? Like Karin mentioned, it's not just at the last step, but engaging the communities and indigenous peoples to decide how it will be done, that process and governance discussion.

Yes, I think the governance discussion is very critical in what we are discussing here. As far as direct access to indigenous peoples and local communities is concerned, I think we need to ensure that they are part of the conversation at the outset. They need to have their voice in the use of the funds, actually, that are going to be provided to them. We have had the discussion, an event last week, where we've looked at indigenous peoples and local communities, where most of them said, They don't want just to be beneficiaries of the funds, but decision makers. They want to be part of the governance structures of those funds. They don't want that the allocation of funds is dictated by the governance structures at international level, but rather at national level, at local level. There was an issue around their capacity to absorb large funds. the point that, you know, some, many of the indigenous peoples or community groups do have capacity to deploy resources on the ground. There is an issue of trust, trust to that capacity to deliver the resources to the people on the ground. So I think while addressing the governance issue, we need to also assure that we trust the capacity of those communities to do what is important for them in their communities. And also, I believe, and coming to the discussion on the TFFF, I believe context matters, because what works in Latin America or Asia, for instance, we're not necessarily working in Africa. So we need to bear that in mind also in devising structures and new funding arrangements for local communities, but even also for national governments taking into consideration the context in which those resources are being delivered. And just to conclude on this issue around access by local communities, I believe we need also to keep in mind the issue of transparent benefit sharing. especially when it comes to results-based instruments or carbon markets and so on, how are we ensuring that the benefits are shared fairly to the people, especially communities that are actually sustaining those ecosystems we are talking about here? And finally, I think we also need to take into consideration issues around land rights. land security, because at the end, it is about their lands. It's where ecosystems are being restored and where we are leveraging opportunities to support them. But at the end, it is the ecosystem, and we need to ensure that we are aligned with the country in rules, regulations regarding land issues. Thank you.

Thank you. Here, I want to come to you with one question, but I also want to give a heads up to our panel. We are out of time almost. Rather than me summarizing, because this audience has heard with a lot of patience and attention, I want to come back to the panel and ask you, what is your one wish? fairy godmother gave you a wish, what would it be in terms of scaling finance for nature? But so I'm just giving you the question up front so you have time to think while Pierre, I come to you. So you talked of aggregation, you talked of first risk, using and creating that accelerated recycle the funds. How are you thinking of access to communities and engaging them in designing, say, a new instrument or even the operation of the accelerator.

Thank you. So our biggest lessons at GFCR is that protection lasts only when people can earn a living from practices that sustain risk rather than degrade them. And local institutions are what make that happen. So we have, with the GFCR, we make this work in three ways, and I'm gonna give a specific example of the depths in Indonesia. I mean, first, communities are central in our delivery mechanism. We run, we don't want our programs from headquarters. We run them to our local partners. We have more than 300 local partners in 22 countries, and that includes local community organization, local NGOs, but also local banks and local businesses. And if I take the example of the debt swap in Indonesia, which we help unlocked, and this was a 35 million debt swap, that money is not sitting in a ministry. It's sitting in a private fund, and it's delivered through direct grants. And they have delivered already 57 grants through 50 community managed conservation organizations, and building on communities traditional practices. So it's really money a sovereign debt swap, has been able to unlock money directly for community implementation. And that grant and that funding is used to support local livelihood, like seaweed farming, sea cucumber, octopus farming, and also marine tourism. We have also a similar model in the Philippines and in Tanzania with our partner Blue Alliance. So they have a network of marine protected areas that are co-managed with communities. And they also have a portfolio of local reef positive businesses. And those businesses, which we have invested in, are paying dividend straight into the MPA budgets that are run by local communities. In the Philippines, we hope to reach more than 1 million fishers and coastal people as direct beneficiaries of this model. In the Pacific, we are also working in Fiji with the Blue Lending Facility, and they are lending directly funding to community-owned businesses. So those are two examples. I would like to just conclude by the last point is really what we are trying to do now is to pay communities for results. So we are trying to establish mechanisms where communities that deliver healthier reef or that can showcase that through their action there is more fish, there is more living corals, can be eligible for a direct payment. And we are trying to really strengthen the monitoring systems and then work with biodiversity credit, for example. And we are trying to link that to an outcome payment mechanism, who can be based on a debt swap or debt conversion. Then we then value verified biodiversity credits or verified results or major outcome that are linked to a reef system, and with payment directly to communities. This is something that I think we would like to push as our next generation of financial mechanism after the one we did in Indonesia.

Thank you. We are out of time. I wish, I mean, you've asked me to wrap up. Let me just hand the floor to our speakers, 30 seconds each. Would that be okay? Gabriel, go.

My wish is less talk, more action, implementation. Let's make the money we have flow, and then we can talk about gaps.

My wish is to be able to leverage as much as possible. and go at the scale of the 1 billion.

Well, my message is to use the different pathways we heard about to deliver money directly to the stewards of biodiversity.

Thank you.

For me, that issue needs to be sorted out while addressing the nature crisis. And finally, I believe Africa has the lowest access to global climate finance, while deploying those innovative sources of finance. Let's ensure that we address that issue. Thank you.

My response is to focus on building an integrated approach between the local and the national level, where public finance nationally drives, gives the right incentives for the private sector and local communities participate.

Thank you so much. You are such a lively panel to have. I'm really lucky to have had this conversation with you. Audience, our colleagues here, thank you for taking the time, sitting through this, and thank you for.

Thank you for the great moderation, and thank you to the panelists as well. I just want to say, thank you, everybody, for staying the whole day. This concludes our finance day. We look forward to continue working with you. The work starts now, continues now, and then we look forward to working together with you. Also, thank you to the logistics team that help us with this, UNEP F5, the technical on the background, and the interpreters who were keeping with all the different languages as well. Thank you very much and looking forward to continue and stay in touch.