CFT: Joanna – Like us, you believe that “services from natural assets should be valued.” Following COP15, how widely do you think this view is shared globally?
Joanna: I certainly think there were some very positive signs to suggest that services from natural assets are being valued in decision-making. For a long time, finance and business have been focused on the relationship between nature and achieving reductions in carbon emissions, but the biggest shift I observed at COP15 is that people are now making the connection between biodiversity, the services a healthy ecosystem offers, and our own health – which is significant in and of itself.
CFT: Can you say more about what is meant by “nature-based solutions”?
Joanna: Sure. Take, for example, the City of Hamilton. To deal with recurrent flooding and the damage it caused, Hamilton’s City Council elected to restore a wetland complex. The restoration effort cost approximately $15.3 million, compared to an estimated $28.5 million for the proposed engineered solution. Taken together, the cost difference between the two solutions, flooding reduction, as well as the added value of creating recreation and other services amounts to $44.2 million on Hamilton’s balance sheet. Nature’s contributions can be valued in dollars and cents for homeowners, the government, and the insurance industry, just to name a few.
COP15 left me feeling very encouraged that awareness of nature’s services and their value is now growing and deepening.
CFT: What are the signposts you are seeing that leave you feeling so encouraged?
Joanna: Finance, business and governments, showed up at COP15 hungry for natural capital accounting data and tools to better integrate into their planning and decision-making and to monitor delivery. There is a strong desire to avoid a situation where none of the targets established are achieved this time round.
For example, the System of Environmental-Economic Accounting (SEEA) Ecosystem Accounting tool, adopted by the UN Statistical Commission in March 2021, is built on “internationally agreed standard concepts, definitions, classifications, accounting rules and tables for producing internationally comparable statistics on the environment and its relationship with the economy.” When it was globally launched last year, the goal was to onboard at least 60 countries by 2025. At COP15 it was revealed that more than 90 countries are implementing SEEA and using the tool for policy decision-making – which is great!
Here in Canada, we’ve launched our Census of the Environment, based on SEEA, and several local governments use natural asset accounting and management to make better policies and plan expenditures. From our own research at the Intact Centre on Climate Adaptation on “getting nature on the balance sheet”, I know that there are at least 100 Canadian municipalities now working on natural asset management – that’s a positive indicator for taxpayers and place-based natural assets. The media is paying attention as well. Last month, Gibsons, British Columbia and Pointe-du-Chêne, New Brunswick, Winnipeg, Manitoba and Okotoks, Alberta, were featured in a news story for their leadership with the Municipal Natural Assets Initiative (MNAI). Gibsons has the first asset management policy in North America to place natural and engineered assets on an equal footing and collect and utilize data accordingly.
CFT: What about business? Where does business fit in natural asset management?
Joanna: Target 15 of the Global Biodiversity Framework acknowledges that industry was “…responsible for a large share of the decline of biodiversity and the degradation of ecosystems,…” It calls for “…all businesses to assess and report on their dependencies and impacts on biodiversity, and progressively reduce negative impacts, by at least half and increase positive impacts.”
The encouraging news here is that business leaders are picking up the challenge – not just because it is the right thing to do or because they are being mandated to do it, but because there is a far clearer business case for including nature-based accounting in business planning. The World Business Council for Sustainable Development (or WBCSD), widely acknowledged for its global influence and leadership, has stepped up to support the Global Biodiversity Framework in this area. Last year, in collaboration with Valuing Nature, it published a report entitled Corporate natural capital accounting – from building blocks to a path for standardization. At the Conference, I was excited to hear from a WBCSD representative that the work being undertaken in Canada on natural asset valuation is seen as world-leading internationally!
I think we’ll see a lot more nature-based accounting going forward.
CFT: Did you see any areas that discouraged you?
Joanna: I would say one of my concerns is that we don’t try to shortcut some of the difficult work ahead. Several times I heard the suggestion that we can replicate or adapt climate finance approaches to biodiversity. For starters, we have not gotten a grip on a large piece of climate finance – only 10% of investment currently goes to adaptation. In terms of credits, you can offset carbon emissions to achieve net-zero targets, but you cannot replace a coastline or species when it is gone. While there is a place for biodiversity certificates or similar, we need to be thoughtful about how we frame it, which I believe those working in this area, like the World Economic Forum, fully appreciate.
CFT: What are the implications of natural asset valuation and accounting for Canada?
Joanna: The most obvious answer is that here in Canada, the vast majority of our natural assets are publicly owned, so any effort we make to value nature in tangible and intangible ways will benefit us all in a very holistic sense, short and long term.
What is perhaps less obvious but a very important implication, in my opinion, is the opportunity this work presents to further reconciliation with Indigenous peoples. Indigenous communities have been stewarding nature’s valuable assets for all time, and nature’s worth is embedded into all aspects of life in ways it has not been for the majority of non-indigenous people.
Before non-Indigenous Canadians begin setting up tables and inviting Indigenous peoples to contribute to plans for restoring biodiversity, we might ask for an invitation to participate in Indigenous ways of organizing around this effort. There is an opportunity for non-Indigenous Canadians to listen and follow.
CFT: What opportunities do nature-based investments offer Canada’s Forest Trust and its stakeholders?
Joanna: In Canada, some of our large-scale opportunities to invest in nature-based solutions are in forestry and agriculture, and while we’ve done a lot to promote the opportunities presented by the carbon credit market, we are well-positioned to make a stronger case for creating win-win-win opportunities, for carbon, for adaptation and for biodiversity. Layering on benefits will help make this approach more “bankable” – delivering economic benefit, creating equitable jobs and generating community income.
Coupled with that is the opportunity to involve people in investing in and delivering action on the ground. Canada’s Forest Trust’s ‘people and place-based’ approach to building forests provides a platform for telling important stories, supporting Indigenous conservation and helping people and businesses to directly make a difference themselves.
CFT: What’s next?
Joanna: The two words I heard echoed most often throughout COP15 were “good faith” and “ambition”. To that, I would add that I witnessed a lot of political will and collaboration, an enthusiasm for investing in nature-positive action, as well as an appetite to be more evidence-based and accountable.
If we collectively commit to delivering the goals of the global biodiversity framework, I am optimistic Canada has the ingredients necessary to turn its biodiversity loss around and be a leader in the world.
Joanna Eyquem is Managing Director of Climate-Resilient Infrastructure at the Intact Centre on Climate Adaptation at the University of Waterloo. Building on her twenty-plus years of experience in the areas of climate change adaptation and natural infrastructure design, Joanna is working to accelerate the uptake of nature-based solutions and valuing of natural assets in Canada, as showcased in her recent report “Getting Nature on the Balance Sheet”. Joanna is a member of Canada’s Forest Trust’s Science, Innovation and Policy Board.