India currently spends about US$ 2 billion per year but needs US$ 5-15 billion more to meet biodiversity conservation targets
Private financial institutions are coming forward to provide finance for BIOFIN (Biodiversity Finance Initiative), a programme started by the United Nations Development Programme (UNDP). That was the key take away from the third global conference on biodiversity finance held in Mamallapuram, Chennai on March 7, 2018.
The main agenda of the conference was to bring together various stakeholders and share their experiences and technical models of various countries that are signatories to BIOFIN. The conference was categorised under four streams: public sector implementation, private sector implementation, analysing solutions and past experience from implementing BIOFIN.
During one of the panel discussions, Rakesh Shejwal, Vice president of Yes Bank India said that biodiversity has never been the priority for banking sector from funding point of view because of lack of understanding and how finance can impact the society.
“When it comes to biodiversity conservation, it was always thought of as a government’s job. Even if the private entities want to look at financing something, they look at CSR or philanthropy work; nobody has yet thought about developing a sustainable finance model for biodiversity conservation. This is where the gap lies,” says Shejwal. He adds that Yes Bank is on the process of setting up a pilot project based on Advance Environmental Risk Management (AERM)—a flagship initiative by the National Capital Finance Alliance—which supports practical implementation of commitments made by a member nation to the NCD.
The objective of AERM is to “provide practical methodologies and frameworks to incorporate natural capital assessment into existing finance sector risk management frameworks”. It will help in understanding natural capital risk holistically, according to Shejwal. India is already a member of the BIOFIN. It was a government initiative. The Environmental Ministry held a first meeting in December 2016 to introduce the BIOFIN project to various stakeholders.
However, India has a long way to go. During the conference, Yuri Afanasiev, United Nations Resident Coordinator for India says, "India currently spends about US$ 2 billion per year but requires between US$ 5-15 billion more every year to meet biodiversity conservation targets.”
Through this conference, the UNDP has pushed to expand the range of solutions to the member countries and the solutions are wide ranging from traditional mechanisms like taxes, subsidies and payment for ecosystem services (PES) to innovative instruments like impact investing, crowdfunding and green lending.
Understanding and integrating real value of biodiversity and ecosystem goods and services, and the real costs of losing them, into markets and governmental fiscal and development planning systems is a key result of the BIOFIN.
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