Why saving the planet is more than just reducing carbon emissions

Staci West 19/05/2022 in Sustainable investing, X Millennials

All life, and all economies, depend on healthy ecosystems. Why? Because nature loss contributes to climate change, endangers human health and affects livelihoods. Without biodiversity, we cannot have the healthy ecosystems that we rely on to provide us with the air we breathe and the food we eat. So, ending environmental decline and restoring our planet is fundamental to sustainable development.

“Humanity is waging a war on nature, this is suicidal. Making people with nature is the defining task of the 21st century. It must be the top priority of everyone, everywhere.”
— Antonio Guterres, UN secretary-general

The UN’s Sustainable Development Goal #15

The goal of Life on Land – the UN’s Sustainable Development Goal #15 – is to protect, restore and promote sustainable use of terrestrial ecosystems. The twelve related targets include the sustainable management of forests, combating deforestation and desertification, reversing land degradation, the halting of biodiversity loss, combating poaching and trafficking of protecting species.

Spotlight on biodiversity

Protecting our planet doesn’t begin and end with tackling carbon emissions. It needs to address biodiversity loss and the preservation of natural resources. Human activities are causing biodiversity to decline faster than at any other time in human history. The main drivers of species loss are agricultural and urban development; unsustainable harvesting through hunting, fishing, trapping and logging — or in other words, people.

Such huge biodiversity loss puts us all at risk. While it may be a stretch to argue environmental degradation directly led to the pandemic, multiple studies have shown a link between environmental change and increased risk in ‘zoonoses’, or diseases transmitted from animals to humans.

It’s crucial that we distinguish between biodiversity loss and climate change and recognise them as distinct and separate problems. Encouraging biodiversity and the preservation of habitats is likely to prove as important to the health of the planet as halting climate change. There are significant financial risks for companies associated with inaction, as well as real opportunities for those that can seize the initiative.

Read more about why biodiversity matters

How can investors help?

Biodiversity and the protection of natural habitats is increasingly being incorporated into ESG analysis by fund groups. Nonetheless, measurement remains difficult, not least because of the lack of adequate tools and metrics to measure biodiversity performance. Neville White, head of Responsible Investment Policy and Research at EdenTree – the company behind Elite Rated Edentree Responsible & Sustainable UK Equity – first talked to us about biodiversity back in 2019. Federated Hermes engagement and stewardship manager Sonya Likhtman also talked us through the challenges of biodiversity loss in a recent podcast.

Specifically investing to preserve and protect life on land can take several different forms. Investors could focus on opportunities across sustainable agriculture and sustainable forestry, for example. Forests help to regulate the water cycle and mitigate climate change. They’re also a direct source of food, income, shelter, and energy for some 1.6 billion people** Yet despite all that forests do for us, they continue to be sacrificed in favour of unsustainable human consumption.

Investors can also look to invest in funds that have biodiversity as a theme, such as BMO Responsible Global Equity and even Polar Capital Global Insurance. Nick Martin, manager of the Polar Capital fund, explained how insurers and governments are working together in this podcast.

Interconnected goals

Life on land, similarly to climate action (SDG 13) and life below water (SDG 14), is interconnected with a number of other sustainable development goals. The pandemic has reminded us that threatening biodiversity interlinks with well-being (SDG 3), access to work (SDG 8) and, as biodiversity loss disproportionately affects those in low income or rural areas, the influence on poverty (SDG 1) and reduced inequalities (SDG 10) is significant.

*Source: UN Sustainable Development Goals, 2021 Report

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