A recent United Nations Environment Programme (UNEP) study revealed that, despite long-term calls for cutting off finance to sectors that harm the environment, these investments still constitute a substantial portion of global GDP. The report, which was released ahead of the COP28 climate conference in Dubai, was the first of its kind to focus on investments that are detrimental to nature.
The State of Finance for Nature report showed that private companies are responsible for $5 trillion of these nature-negative finance flows, which is 140 times more than investments in nature-based solutions. Five industries – construction, electric utilities, real estate, oil and gas, and food and tobacco – account for nearly half of these investments.
Global Canopy, a data-driven non-profit that works to address market drivers that damage nature, was one of UNEP’s collaborators on the report. Niki Mardas, the organization’s Executive Director, told UN News that many companies and financial institutions are unaware of their involvement in nature-negative investments, especially when it comes to their supply chains. He noted that, while these companies must continue to make positive investments, they need to understand how they are contributing to the problem and take action to modify their operations and behaviour.
At a press conference in Dubai, the head of UNEP’s Nature for Climate Branch, Mirey Atallah, said the report illustrates that the climate crisis is still outpacing efforts to contain it. She noted that convincing private companies to make the right investments necessitates establishing the necessary legal frameworks to support directing funds towards nature-positive solutions. Ms. Atallah added that the lack of money going towards nature-based solutions is not due to a lack of funds, “it’s just that the money is going in the wrong direction”. She concluded that COP28 must be the turning point, and that “the single biggest action we can take for nature, climate and people is to green finance”.