“We cannot tackle climate change without addressing biodiversity,” says Norsken’s Agata Freimann.
The world is on the brink of mass extinction.
Human use of the planet may be one reason why the planet is losing much of its biodiversity in the form of bacteria, plants and animals, experts say.
However, a concerted effort is emerging to prevent, or at least slow, this widespread loss of biodiversity and protect natural resources.
“The problem is obvious. We know that there is no point in talking about stopping the climate crisis without addressing biodiversity.”
So says Agate Freimane, general partner at impact venture capital fund Norrsken.
The effects of biodiversity depletion extend to the capabilities of nature that businesses and humans rely on, such as purifying water and air and fertilizing crops. In addition, there are significant business cases behind addressing the biodiversity depletion crisis.
According to a 2020 document from the World Economic Forum, more than half of the world’s GDP, approximately $44 trillion (approximately 6,600 trillion yen, exchanged at 1 dollar = 150 yen), depends on nature and its functions.
In recent years, biodiversity loss has risen to the top of public, regulatory and corporate agendas, compounded by the intertwined climate crisis. At the 15th Conference of the Parties to the Convention on Biological Diversity (COP15) held in 2022, a ground-breaking global biodiversity initiative was announced with the goal of raising $200 billion (approximately 30 trillion yen) in investment annually by 2030. This was an important milestone in that the gender framework was devised.
At the same time, says Siobhian Brewster, a partner at impact fund Aenu, “everyone realizes this is an incredibly difficult problem.” Despite a lack of tools to effectively assess, measure and report on biodiversity, climate reporting has laid the foundation, say investors Business Insider spoke to.
Problem measurement as a starting point
Biodiversity reporting depends on having accurate underlying data. The assessment involves repeated manual efforts to track everything from tiny microorganisms to large animals in local parks, in the water, and at potential housing sites.
Zoe Balmforth, co-founder of biodiversity data and analytics startup Pivotal, says:
“We take a snapshot of what we see and hear in a particular place at a particular point in time. We compare this again, say, a year later, and then a year later. Then, statistically speaking, within that range, This allows us to see changes in
Collecting local data is expensive and difficult, and the companies that need it don’t know how to do it, says Piotr Bukański, senior investment associate at Beringea. That’s what it means. Buchansky therefore sees scope for startups to fill that gap.
Biodiversity in the carbon footprint
Globally, funding rounds for startups tackling biodiversity loss have steadily increased since 2018, peaking at 69 in 2023, according to data from PitchBook. became. Investment amounts vary.
Venture capitalists poured a record $463 million into the emerging sector in 2022, following a surge in previous years. However, by 2023, it had fallen to half that amount, to $212 million (approximately 32 billion yen).
Companies that were early to the industry have adopted different approaches to biodiversity loss. VC-backed startups such as Pivotal, Basecamp Research, Nature Metrics, and Dendra Systems are using the biodiversity knowledge graph to develop information for land restoration and seeding. We are working on all kinds of fields, from drones to AI utilization.
Basecamp Research staff collect samples in Portugal’s Azores.
Meanwhile, new and existing tools are emerging to help companies track and report on their impact. This is the second piece of the puzzle.
For example, French carbon management company Sweep aims to become an all-in-one platform for monitoring sustainability data, including biodiversity. Rachel Delacour, CEO of the company, said:
“Finding universal metrics to track and manage data such as ecological impacts is difficult.”
But Delacour says climate regulation will lay the groundwork and increase transparency and trust, which will benefit the long-term viability of both the environment and businesses.
It will be more difficult to get biodiversity data right, but “we have the infrastructure rails provided by climate data and reporting, so the development curve will be more rapid.” “That’s true,” says Beringia’s Buchanski.
natural legal obligations
In France, financial institutions are required by law to monitor, report and reduce their biodiversity impacts. “This is an example of how it will affect other parts of Europe,” Buchanski said.
In 2023, the Taskforce on Nature-Related Financial Disclosure released a voluntary framework for how companies and financial institutions should report their impacts. Meanwhile, the enforcement of the EU Deforestation Regulation will change the way companies are held accountable in the supply chain.
In the UK, a requirement has also been added that urban developers must have a positive impact on biodiversity. Biodiversity credit markets have been legislated for when these requirements are not achievable, but should be a last resort.
Broader biodiversity credits have long been touted as a way to direct funding towards nature. This is like a carbon credit market where you can buy and sell CO2 emission reductions to offset your CO2 emissions.
Investors, including Norsken’s Freiman, are interested in the concept. Investors are looking for big problems and addressable markets to invest in with the potential for greater returns and impact. At this stage, Freiman says it’s unclear where the real opportunities lie, and more business model innovation is required.
[Original text]
(Edited by Ayuko Tokiwa)
Source: BusinessInsider
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