Is It Time To Appoint A Chief Nature Officer?

The Role of a Chief Nature Officer in Driving Sustainable Development Goals

Nature and the Triple Planetary Crisis

Nature plays a crucial role in the triple planetary crisis, which encompasses climate change, pollution, and biodiversity loss. Global policy developments, such as the EU Deforestation Laws and COP15’s target to protect 30% of nature by 2030, emphasize the importance of prioritizing nature in investment and private sector agendas. Lombard Odier Investment Managers’ appointment of a Chief Nature Officer highlights the need for nature to have a seat at the decision-making table.

The Decline of Natural Capital

The Dasgupta Review describes nature as our most precious asset. However, biodiversity loss has led to a decline in the stock of natural capital by nearly 40% between 1992 and 2014. Sir Partha Dasgupta emphasizes the need for a financial system that channels investments towards activities that enhance natural assets and promote sustainable consumption and production. Governments, central banks, international financial institutions, and private financial institutions all have a role to play in achieving this.

The Financing Gap for Biodiversity Loss

Despite calls for action, the transformation and adoption of nature as an asset class have been slow. The Taskforce on Nature-related Financial Disclosures (TNFD) has helped organizations report and account for risks of biodiversity loss, but there is still a significant financing gap. The Paulson Institute estimates that addressing global biodiversity loss will require $598-824 billion per year by 2030.

The Roles and Responsibilities of a Chief Nature Officer

Advocating for Nature and Building Momentum

The appointment of a Chief Nature Officer is a crucial step in putting biodiversity and natural capital at the heart of the investment agenda. The Chief Nature Officer is responsible for advocating for nature, generating momentum among stakeholders, and understanding how environmental risks can impact different economic sectors. Marc Palahí, the first Chief Nature Officer for a bank at Lombard Odier Investment Managers, aims to make the case for nature-based solutions and transform economic sectors to be climate-neutral, circular, and biodiversity-positive.

Building Strategies and Mobilizing Capital

A Chief Nature Officer works with sustainability research teams to develop nature-related strategies and roadmaps. Platforms like holistiQ, a collaboration between Lombard Odier Investment Managers and Systemiq, help identify and invest in critical themes of the environmental transition. The Chief Nature Officer also identifies risks for future investment strategies and engages with potential clients and corporations.

Collaboration with the Chief Sustainability Officer

The Chief Nature Officer collaborates with the Chief Sustainability Officer to integrate nature-centric strategies into a company’s operations or investment strategy. This collaboration ensures that the biodiversity crisis receives the same level of attention as the climate crisis and enables the development of cross-cutting solutions and policies.

Bridging the Skills Gap for Nature Conservation

The Unique Skill Set of a Chief Nature Officer

The role of a Chief Nature Officer requires a unique skill set that combines finance and nature. Identifying the right skills and expertise can be challenging, as these two worlds have been traditionally separated. Attributes valuable to the role include the ability to connect complex information, empathy, curiosity, and a science-based understanding of nature. There is a need for universities to develop new degrees on nature finance to meet this demand.

Harnessing Data for Biodiversity Performance

Data Challenges in Biodiversity Conservation

Data management and interpretation are crucial for improving nature-related performance. Historically, there have been knowledge barriers surrounding nature-related data, such as the unavailability of granular asset-level data and difficulty in setting baselines and monitoring biodiversity impact over time. Platforms like RS Metrics’ ESG Signals and AssetTracker provide asset-level environmental data to inform decision-making, set targets, measure performance, and communicate efforts to stakeholders.

The Role of Investors in Valuing Natural Capital

Shifting Incentives and Closing the Biodiversity Funding Gap

Investors and the financial community play a significant role in driving the benefits of natural capital valuations and recognizing the value of the circular bio-economy. By shifting incentives away from activities that deplete nature and towards practices that restore and rejuvenate, such as regenerative agriculture and forest conservation, investors can help close the biodiversity funding gap. Taking a longer-term view and considering natural capital in investment decisions is crucial.

The Role of Governments and Policymakers

Governments and policymakers have a responsibility to facilitate the transition towards valuing natural capital. They can reduce risk through policy reform, capacity building, and catalytic early-stage investment. Rigorous natural capital accounting practices are also essential. The total cost of subsidies that damage nature globally is estimated to be around $4 to 6 trillion per year.

The Importance of Collaboration

Public and private sectors must work together to account for biodiversity and natural capital effectively. Cross-collaboration ensures that investments have a multiplier effect and create a greater impact. The role of a Chief Nature Officer is expected to become mainstream in reputable banks, asset managers, and corporations by 2025.

SDGs, Targets, and Indicators

1. SDG 15: Life on Land

   • Target 15.1: By 2020, ensure the conservation, restoration, and sustainable use of terrestrial and inland freshwater ecosystems and their services, in particular forests, wetlands, mountains, and drylands, in line with obligations under international agreements.
   • Indicator: The article mentions COP15’s target to protect 30% of nature by 2030, which aligns with the target of conserving terrestrial ecosystems.

2. SDG 12: Responsible Consumption and Production

   • Target 12.6: Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle.
   • Indicator: The article discusses the role of the Taskforce on Nature-related Financial Disclosures (TNFD) in helping organizations report and account for risks of biodiversity loss and ecosystem degradation, which aligns with the target of integrating sustainability information into reporting.

3. SDG 13: Climate Action

   • Target 13.3: Improve education, awareness-raising, and human and institutional capacity on climate change mitigation, adaptation, impact reduction, and early warning.
   • Indicator: The article mentions the need for universities to develop a new degree on nature finance, which aligns with the target of improving education and capacity on climate change.

Table: SDGs, Targets, and Indicators

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Source: forbes.com

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