World leaders urged to back innovative nature financing at One Forest Summit in Gabon

Supporting and scaling up innovative nature finance, including biodiversity-positive carbon credits, and nature certificates or credits, could help close the significant gap in funding for the safeguarding and restoration of biodiversity and benefit Indigenous People and local communities, according to a new report launched by the Global Environment Facility (GEF) and IIED. 

The report, 'Innovative Finance for Nature and People', was developed by a 20-person high-level working group supported by an expert panel. It makes a series of recommendations to the One Forest Summit being jointly hosted by the governments of Gabon and France in Libreville today and tomorrow.

The meeting is the latest in a series of One Planet Summits, the brainchild of French President Emmanuel Macron, which bring together heads of states and governments, leaders of international organisations, financial institutions, the private sector, international non-governmental organisations, think tanks and research centres, Indigenous Peoples’ organisations, and civil society to tackle issues of environmental and climate protection alongside labour market and economic opportunities. 

The recommendations to government and policymakers include providing clear laws, policies and incentives to foster demand for and accountability within the market for these products. They also include eliminating subsidies that are harmful for biodiversity as well as clarifying that biodiversity-positive carbon credits and nature certificates are not offsets and could align with the Paris Agreement on climate and the recently adopted Kunming-Montreal Global Biodiversity Framework.

Biodiversity-positive carbon credits and nature certificates need to be piloted as part of national biodiversity and climate strategy and plans before expanding towards a critical mass of trades. Governments need to work with other stakeholders, especially Indigenous Peoples and local communities, to introduce effective governance for nature certificates and enhance the existing carbon governance to include biodiversity elements. 

“Biodiversity credits have the potential to unlock additional financing from a range of sources, including private sector companies that have made commitments to be nature-positive and support a net zero transition,” said Carlos Manuel Rodriguez, CEO of the Global Environment Facility. “We need to learn from past work on carbon credits to create a single, unified forest credit system that factors in both climate and biodiversity concerns.”

The report has a number of recommendations for the private sector, investors and others in the marketplace. These include the need to generate and sustain demand from individual buyers and private investors, and to collaborate on methodologies, certification standards and metrics.  

It also says that all those involved need to ensure Indigenous Peoples and local communities, as key custodians of nature, are contributing to the design of, and benefitting from, these innovative financial products. They should receive an agreed share of any revenues, be supported to develop and lead credit and certificate projects, and be key players in market governance by certification and managing exchanges and registries.  

“Innovative finance offers a tangible solution to the problem of funding the conservation and restoration of biodiversity, but we need to do the work early in the market development to ensure they don’t become another means of greenwashing,” said Tom Mitchell, executive director of IIED. “If implemented in the right way, they could help to preserve precious plants, animals, and ecosystems, while channelling finance to local communities and Indigenous Peoples who are the most effective custodians of biodiversity.”

The report recommends that all those engaging in the development of biodiversity-positive carbon credits and nature certificates need to come up with, and apply, integrity principles for the voluntary market, including keeping it distinct from biodiversity offset mechanisms, which should remain within the remit of regulators, and linking it to adequate policy and institutional frameworks at a jurisdictional level. 

The market will also need to build on existing networks to develop a global partnership and platform to accelerate and scale-up programmes delivering biodiversity-positive carbon credit and nature certificates that deliver equitable, nature-positive outcomes. The platform will need to help identify priority areas for schemes, help establish appropriate methodologies, as well as good-practice and cooperation, and promote financial tracking and accountability through block chain and other technologies.