Biodiversity Wrapped 2023

As 2023 comes to a close, let’s take a look at what we thought this year had in store for biodiversity. At the beginning of the year, I wrote this piece on whether 2023 would be the year of biodiversity blues or bliss, so where did we land?

In December 2022, COP15 ended with a landmark agreement to protect nature under the UN Global Biodiversity Framework. With the BGF paving the way, this year has undoubtedly been one of the biggest years for nature and biodiversity yet. We’ve seen huge shifts in how the private sector values and accounts for nature, there have been developments in regulation and policy for nature globally and we’re seeing more capital than ever flowing into the space.

Here’s what happened in 2023 for biodiversity:

Taskforce for Nature-Related Financial Disclosures

One notable development in 2023 was the unveiling of the TNFD framework, modelled after the successful Taskforce for Climate-Related Financial Disclosures (TCFD), offering companies a structured approach—termed LEAP (Locate, Evaluate, Assess, Prepare)—to assess their impacts and dependencies on nature. The framework's final version included 14 disclosures, empowering financial institutions and companies to address nature loss comprehensively, covering aspects such as governance, strategy, risks and impact management, as well as metrics and targets. The voluntary trialling of TNFD recommendations by regulators worldwide, exemplified by Australia and Canada, suggests a growing momentum toward integrating nature considerations into financial reporting standards.

Climate-related financial disclosures are now mandatory for Australian companies. Can we expect mandatory nature disclosures to follow suit? Only 2024 will tell.

Regulation for biodiversity

Simultaneously, global efforts to enact legislation for biodiversity gained momentum. From Europe to Australia, laws to prevent the loss of nature and support investment in nature repair have come into effect.

The European Union achieved a landmark deal in November, binding member countries to restore 20% of land and seas by the end of the decade, with escalating targets of 30% by 2030, 60% by 2040, and an ambitious 90% by 2050. This groundbreaking legislation marked the EU's first-ever comprehensive law with legally binding targets for biodiversity restoration, aligning with the Global Biodiversity Framework's goal of protecting 30% of the planet by 2030.

On another front, the United Kingdom introduced biodiversity net gain legislation, requiring developers, starting January 2024, to deliver a 10% biodiversity net gain in new housing, industrial, or commercial projects. Similarly, Australia passed the Nature Repair Bill in December well ahead of schedule, creating a transparent framework for issuing tradeable biodiversity certificates to landholders engaging in projects that protect, manage, and restore nature. Notably, the bill underwent amendments to restrict companies from using credits to offset environmental damage, marking a significant leap toward responsible and transparent nature conservation.

Net-zero and nature positive

The corporate world witnessed a paradigm shift in sustainability strategies, with "Nature Positive" emerging as a buzzword in 2023. Recognising the symbiotic relationship between achieving net-zero goals and fostering biodiversity, major global companies, including Google, integrated ambitious biodiversity targets into their sustainability blueprints. This transformation signifies a crucial turning point where nature is increasingly valued for its intrinsic role in sustaining the global economy.

Biodiversity startups booming, capital flowing

The burgeoning field of nature tech also experienced remarkable growth.

According to the Nature4Climate State of Nature Tech report released in October 2023, VC investments in nature tech startups have been developing fast over the past 3 years. Annual VC investments in nature tech startups increased from $1 billion in 2018 to $1.5 billion in 2022. Early-stage deals rose by 130% between 2020 and 2022 showcasing the rapid maturation of the nature tech industry.

This innovative sector, dedicated to biodiversity net gain, habitat restoration, and conservation, holds promise in contributing to global efforts to protect and restore ecosystems.

The year showcased a collective global effort, combining regulatory frameworks, corporate initiatives, and technological innovations to address biodiversity loss and propel nature conservation into the forefront of environmental agendas. All that was promised at the beginning of 2023 in the nature space has come to fruition.

Let’s keep this momentum up for 2024.