Emergence of the Natural Capital & Biodiversity Asset Class

As part of its mission to make green and sustainable  finance  a driving force  in developing the Paris Financial Center and positioning Paris as the leading financial centre on these issues,  Finance  for  Tomorrow  has  structured  a  working  goups  in  Natural  Capital  and Biodiversity.  Its  objective  is  to  coordinate  the  actors,  to  amplify  their  ambitions,  and  to reinforce their leadership internationally.

– Report 2018

 
The more we lose it, the more concrete the concept of Biodiversity becomes. In October 2018, the WWF disclosed a report revealing that in the past 40 years, more than 60% of wildlife populations have disappeared. It is the same trend for ecosystems all around the world. In reaction to these terrifying prospects, the concerns are growing: how long shall we be able to enjoy a prosperous environment?
It is proven that this downfall can be traced to human activities that destroy natural habitats and overconsume global resources.
However,  our  economies  heavily  rely  on  Natural  Capital.  Ecosystems  provide  around
$100bn  of  free  economic  services  per  year.  Generally,  every  good  we  produce  and consume is the transformation of a natural product – even through complex supply chains. We  also  critically  need  healthy  ecosystems  to  absorb  carbon  emissions.  Therefore,  it  is essential that economic players improve global resources management.
In the face of the challenges posed by the protection of our planet, academics and policy makers have realized that economic actors and capital suppliers have a concrete impact on Biodiversity  and  can  become  drivers  of  positive  changes.  We  do  have  the  technical knowledge to protect Biodiversity, to produce responsibly and preserve soil fertility, and to restore damaged ecosystems. What we need are the economic rationale and the financial methods to scale these techniques and to effectively build global sustainable supply chains.
Experienced professionals aknowledge the trend they recently witnessed in sectors like renewable energy: it takes a collective process to build an asset class. It requires common ground and understanding, it calls for a risk-reward partnership. At Finance for Tomorrow, with our dedicated working group, we conducted this “Mapping of the French Stakeholders” to support the emergence of the Natural Capital asset class, a much-needed breakthrough in the financial sector. We hope to help fasten this process and to showcase to the world the pioneer expertise of the French financial stakeholders.
In the next years in France, we will be extremely well positioned to be a hub on Biodiversity issues, as France will take the Presidency of the G7 and will host major international events on the topic. Based on the experience of the Paris Agreement, we must prepare well for the Conference Of the Parties 15 (COP15) on Biodiversity in China in order to create the political momentum needed to preserve our common environment.
As Chair of Finance for Tomorrow, as an investor in sustainable infrastructures and Natural Capital, I hope this collective work will allow an improvement in the way we invest in Nature.
 
Philippe Zaouati,
Chair of Finance for Tomorrow & CEO of Mirova
 

Discover the Report (EN) here

Discover the Report (FR) here