Why nature finance needs more trust and transparency
Channeling more investment to local stewards of nature can help address biodiversity loss. Image: NARI Women's Beekeeping Group, Wild Survivors UK
- Inequality is among the biggest drivers of biodiversity loss because there are often few non-extractive alternative livelihoods for many of those in rural communities living close to nature.
- To halt and reverse this trend, we need to drive the equitable distribution of wealth towards the millions of nature stewards across the globe.
- By embracing recent advances in geospatial technology, companies can now track their environmental impacts and channel more wealth towards nature-positive sustainability initiatives that help these communities.
Nature is our life support system, but it is under extraordinary pressure. Over the past century, increased human activity has largely come at the expense of nature. The resulting biodiversity loss threatens our entire planetary system, reinforcing threats from the climate crisis to global pandemics and chronic food insecurity.
Addressing biodiversity loss remains one of the most complex challenges of our time. However, in recent years, a growing body of evidence has revealed that the degradation of nature is inextricably linked to the inequitable distribution of wealth. This inequality gives rise to disproportionately large footprints of the super-rich. It also leaves billions of people – often those living in close association with nature – with few non-extractive alternative livelihoods.
On top of this, the environmental movement is suffering from a crisis of trust, as mis- and disinformation give rise to greenwashing that further limits the flow of wealth towards rural communities.
If inequality is the driver of environmental degradation, it follows that the equitable distribution of wealth has the potential to drive environmental recovery. If our financial and political mechanisms are able to distribute wealth more equitably, it could go towards the local stewards of nature that live in these rural communities.
There is a lot of room for hope and informed optimism here because addressing this challenge will not require a transformation – the infrastructure is already in place.
Supporting local nature stewards
Millions of local farmers and indigenous populations already live in direct contact with nature across the globe. Now, recent technological advances in artificial intelligence (AI) and geospatial data are making it possible to see and engage with a massive bottom-up movement in which people and nature are thriving together.
Thriving nature can support local livelihoods, which in turn drives further protection and restoration of nature, creating powerful change. For example, When Kenyan farmer Leitoro Adrian protects patches of local Kenyan Forest with NGO the NaPO network, the vegetation traps moisture so that his cattle can graze. By protecting nature, Leitoro is securing sustainable food, livelihoods and medicines for the Rendille tribe that he belongs to. Like the farmers in the Centro De Estudos Rioterra community in Brazil, or the community conservationists of Lemo Nakai Village in Indonesia, Leitoro is one of countless people across the globe whose livelihoods are inextricably linked to the health of local biodiversity.
For the first time, research has begun to show how the equitable distribution of wealth towards these land stewards can revitalize ecological integrity on a national scale. By distributing wealth towards local land owners, Costa Rica’s Payment for Ecosystem Service programme has revitalized the lost ecological soundscapes of forests across 200,000 hectares of land. These payments provide a supplemental livelihood to local landowners who work to protect local forests rather than cutting down trees to grow corn for income. As a result, the programme has helped to recover the cacophony of birds, mammals and insects that characterized the beauty and uniqueness of this region.
Using transparency to halt biodiversity loss
Achieving this at a global scale will require another level of engagement from both the public and private sectors. According to a recent report about the cost of biodiversity loss, we need to distribute $700 billion per year more towards these stewards of nature in order to avoid ecological collapse – not to mention the trillions of dollars that would result from such an event.
Organizations need access to information about community-led projects that they can support to help mitigate biodiversity loss. They must be able to display where their existing products are sourced and require updates to track their environmental footprints for reporting purpose. These capabilities will go a long way to restoring confidence in the sustainable development movement and help redistribute wealth to where it's most needed.
For this reason, Restor’s network of local community-led projects is now joining forces with existing networks of corporate actors such as 1t.org, and national governments through the UN Food and Agriculture Organization's Framework of Ecosystem Restoration Monitoring (FERM), to build Restor Enterprise.
Restor Enterprise aims to support organisations, financial institutions and governments on their journey to better understand their impact on nature. By mapping their supply chain, or the local community projects they are investing in, Restor Enterprise brings visibility to these networks, enabling trust, and provides scientific data showing how nature is being impacted. This tool has been developed in collaboration with governments including Costa Rica and Ethiopia, businesses including Salesforce, Manulife, Nzatu and Community Climate Solutions, and organisations including the WWF, UBS Optimus and The Earthshot Prize.
Transparency might worry companies with the biggest environmental footprints. But this level of honesty is desperately needed to restore trust into our economy and in our environmental movement. It is critical to developing the financial and political mechanisms that drive the distribution of wealth towards the local stewards of nature.
If nature provides us with everything that we need to survive, then we collectively have the power to influence the environmental movement with every product we choose. By embracing transparency, we can unlock our collective decision-making power to tackle biodiversity loss so that people and nature can thrive together.
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Gill Einhorn
December 5, 2024