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Loss of biodiversity is a planetary emergency. A report on the Economics of Biodiversity states that many ecosystems have been degraded beyond repair or are at imminent risk of reaching ‘tipping points’, which could have catastrophic consequences such as species extinction, forest-climate feedbacks in boreal regions and epidemics. Maintaining ecosystem balance and biodiversity is vital in climate regulation, carbon capture and the prevention of newly emerging diseases. Vast amounts of biodiverse land serve as home to many Indigenous peoples and traditional communities. In order to safeguard biodiversity, banks must act urgently and decisively to address the impacts linked to their financing that contributes to biodiversity loss.
Tropical and subtropical forests are ecosystems that harbour the greatest biological diversity globally and store about 70% of the carbon in forests worldwide. Yet they have been largely threatened by changes of land use caused by large-scale commercial agriculture - the main cause of deforestation (40%) - local subsistence agriculture (33%), infrastructure (10%), urban expansion (10%), and mining (7%). The planet’s largest rainforest, the Amazon, is being ravaged by catastrophic fires due to advancing monoculture plantations, mining, and illegal logging. Lake Baikal, the world’s largest and deepest freshwater lake, is suffering with the intense impacts of mining and water infrastructure. Half of Australia's Great Barrier Reef is now dead due to coal and gas projects and Ramsar Wetlands in Uganda are being threatened by construction of the massive EACOP pipeline.
Restoring and protecting these ecosystems is one of the most effective strategies for tackling climate change. Rainforests like the Amazon act as carbon sinks and are a vital regulator of climate change by removing one quarter of the carbon dioxide emitted into the atmosphere by humans. Coral reefs harbour the highest biodiversity of any ecosystem globally and provide a wide variety of ecosystem services such as protection from flooding and sustaining the fishing industry. Coral reefs are estimated to directly support over 500 million people worldwide, through providing daily subsistence food. A 2015 study by the WWF projects that the climate-related loss of reef ecosystem services will cost at least US$ 500 billion per year by 2100. Healthy ecosystems will be more resilient to climate change and so more able to maintain the supply of ecosystem services on which our prosperity and wellbeing depend.
The World Economic Forum ranks biodiversity loss and ecosystem collapse as one of the top five threats humanity faces in the next 10 years. A broad range of human rights depend on thriving biodiversity and healthy habitats and ecosystems. These include not only the right to a safe, clean, healthy and sustainable environment, but also the right to food, clean air and water, health, culture and the right to life. Conversely, biodiversity and habitat loss often result in violations of these rights. Biodiversity loss disproportionately harms those who are already subjected to the worst consequences of climate change and are vulnerable to exploitation, such as Indigenous peoples and traditional communities, women and girls, children and youth and the poor. In 2020 alone, 277 land and environmental activists were murdered for defending their land and the planet. The destruction of nature continues to worsen the situation for frontline communities and defenders of the earth.
Deforestation and land use change expose humans to new microbes. Microbial diversity is a large part of the diversity that is being lost and these microbes - bacteria, viruses and fungi, among others - are essential for maintaining healthy ecosystems. Because humans are part of these ecosystems, our health also suffers when they vanish, or when barriers reduce our exposure to them. As the loss of biodiversity continues, we are witnessing an increasing spillover of pathogens from wild animal species to humans, exposing our vulnerability to Zoonotic diseases such as COVID-19.
Role of banks
According to an OECD report, the global financial flows that are potentially harmful to biodiversity are estimated at US$ 500 billion per year, which is almost six times more than the total spending for biodiversity conservation. Economic activities require use of land and water and in most cases they cause degradation of nature, emissions of greenhouse gases and environmental pollution. Financial institutions play a key role in this field by financing these economic activities. A ShareAction report found that of 75 of the world’s largest asset managers 86% made no reference to ecosystem protection, natural capital or biodiversity in their policies.
What banks must do
The overall aim of the Banks and Nature campaign is for banks to protect nature and end bank finance for nature destruction. In order to achieve this, we demand from banks that they:
Explicitly acknowledge the urgency and severity of the biodiversity crisis and its interrelatedness to the climate crisis, and acknowledge their responsibility to ensure that the activities they finance do not lead to further ecosystem destruction and extinction.
Actively support and formally commit to align their business with the objectives and targets of the Convention on Biological Diversity.
Adopt methodologies to measure and report the impact of investments and financing activities on biodiversity, setting concrete and time-bound targets to reduce this impact.
Strengthen sector finance policies for high impact industries to ensure they adequately safeguard biodiversity, including proper due diligence impact assessments for each sector, and respect the rights of Indigenous peoples, local communities, and human and environmental defenders as custodians of nature.
Exclude finance for specific very high impact business activities and adopt No-Go policies which prohibit any direct or indirect financing related to unsustainable, extractive, industrial, environmentally, and/or socially harmful activities in or which may potentially impact high level biodiverse areas.
Not provide finance to carbon and biodiversity offset projects based on the concept of “no net loss”.