Aligning G20 Industrial Policies with Biodiversity Conservation

Task Force 6: Accelerating SDGs: Exploring New Pathways to the 2030 Agenda 1. The Challenge Biodiversity loss is one of the most complex environmental challenges that the global community needs to address effectively in this crucial Decade of Action . About half a million species, ranging from large mammals to micro-organisms, are feared to disappear within the next few decades. [1] If not averted, this loss will be the “sixth mass extinction event in Earth’s history.” [2] It will escalate climate change, worsen food insecurity, increase risks to human health, and diminish means of livelihood for rural and Indigenous communities, many of whom live in acute poverty. [3] It will also significantly erode global gross domestic product (GDP), half of which is dependent on biodiversity to moderate or high degree. [4] Given such pervasive and profound implications of biodiversity loss, biodiversity conservation has emerged as a cross-cutting theme across all 17 Sustainable Development Goals (SDGs). According to a 2023 United Nations Environment Programme (UNEP) report, our ability to progress on 35 of 44 SDG targets related to poverty, hunger, health, water, cities, climate, oceans and land, depends on maintaining healthy levels of biodiversity. [5] 2. The G20’s Role Numerous initiatives, from policy instruments to market-based incentives, have been launched to stem biodiversity loss but reversing biodiversity decline has so far been an uphill battle. The Kunming-Montreal Global Biodiversity Framework (GBF) adopted in December 2022 at the 15 th meeting of the Conference of Parties (COP) to the UN Convention on Biological Diversity has indeed inspired hopes and aspirations by providing guidance to make future efforts more effective. In particular, the GBF emphasised sound mechanisms for monitoring, planning, mobilising resources, capacity building, information sharing, and enhancing global cooperation. [6] Businesses have a crucial role in translating GBF goals and targets into actionable practices. This can be conceptualised in two ways. [7] One possibility is to consider businesses as possessors of slack financial resources, a portion of which they could provide to conservation organisations to help bridge the daunting funding gap for biodiversity conservation, currently estimated at US$ 700 billion annually. A second, and perhaps more important role that businesses could play in facilitating the implementation of GBF is adopting biodiversity-friendly business practices and abandoning activities that could directly or indirectly harm biodiversity. This latter view is explicitly articulated in Target 15 of the GBF which calls for legal, administrative and policy measures to encourage and enable businesses (particularly, large and transnational companies and financial institutions) to help in conserving and enhancing biodiversity. Business entities in the G20 countries that wield sizeable influence over business practices have the foremost responsibility to show leadership in devising biodiversity-friendly business practices. Our overarching recommendation is that biodiversity-friendly business practices be guided and governed through industrial policies, with market incentives serving only as complementary catalysts. This recommendation is based on a review of the voluminous literature on business sustainability, which shows that market-based incentives fail to engender transformative changes. [8] The conclusion drawn from most studies is that at best, incentives facilitate the emergence of a handful of companies as environmental leaders pursuing substantive actions, often encouraging merely symbolic actions and opportunistic behaviour. At worst, such incentives may even engender downright deception and corporate hypocrisy. Given the need for effective and urgent action on biodiversity conservation, risking market failures is not a prudent pathway. Therefore, the recommendation is to create industrial policies that set high regulatory benchmarks and leave room for market-based initiatives.