Reflection on COP 16 and its significance for companies

The 16th Conference on the Parties (COP16) to the Convention on Biological Diversity took place from October 21 to November 1, 2024, in Cali, Colombia. The conference brought together global leaders and biodiversity experts focusing on global biodiversity goals and action plans to protect ecosystems and address biodiversity loss. After roughly 12 hours of meeting through the night, the conference concluded with a significant outcome for the use of genetic data from nature while failing to reach consensus on other key issues. We have compiled some core takeaways and their implications for companies:

• Digital Sequence Information: Currently companies in industries such as pharmaceuticals, cosmetics and agribusiness use genetic data collected by academic researchers free of charge for their product development. Under the agreement these companies which benefit from genetic data should contribute 1% of their profits, or 0.1% of their revenue to the “Cali Fund”. Even though these contributions are not mandatory, the agreement can put reputational pressure on companies.

• Integrated Approaches: Discussions at COP 16 have highlighted the need for integrated approaches to tackle both climate change and biodiversity loss, emphasizing that addressing these issues together is crucial for achieving sustainable and resilient outcomes.

• National Monitoring and Implementation: There was a strong push to enhance national monitoring systems to track progress towards the Kunming-Montreal Global Biodiversity Framework targets such as the “30x30” target, effective protection and management of 30% of the world’s terrestrial, inland water, and coastal and marine areas by the year 2030. Even though there was no consensus on a new monitoring framework within COP 16, the pressure on companies to be aligned with frameworks like the Taskforce on Nature-related Financial Disclosures (TNFD) is likely to increase.

• Biodiversity Finance: The conference highlighted the need to accelerate biodiversity finance from both public and private sources. Businesses are encouraged to contribute to and benefit from biodiversity finance mechanisms, such as blended finance and biodiversity credits, mobilizing resources to support biodiversity goals.

• Protected and Conserved Areas: COP 16 agreed to create a new body focused on the rights and interests of indigenous people. The conference also stressed the importance of ensuring that protected and conserved areas are effectively managed and equitable, recognizing the contributions of Indigenous Peoples and local communities. Companies can enhance their reputation and build trust by engaging in biodiversity conservation and supporting these communities.

As we move forward, it’s clear that businesses must play a pivotal role as biodiverse, resilient ecosystems are the foundation of our economies. Businesses should adopt a holistic approach in protecting nature and integrating it into their overall sustainability strategies. For example, by considering climate change and biodiversity together, as interconnected challenges. Frameworks like TNFD will be instrumental in guiding companies through this transition, ensuring transparency and accountability: By identifying and monitoring nature-related risks and opportunities and integrating them into enterprise risk management, sourcing decisions and non-financial reporting, companies will be well prepared to maintain business continuity and market access in an era of increasing sustainability related risks.