The United Kingdom and France have joined forces to launch a biodiversity credits initiative to support companies in their efforts to contribute to nature recovery. The Environment Secretary of the UK and French State Minister announced this collaborative agreement in June 2023.
The global roadmap aims to foster international cooperation to benefit people and the planet.
A pivotal component of this initiative is establishing a joint UK-France advisory panel, which will bring together diverse perspectives on biodiversity credits worldwide. Biodiversity credits serve as instruments that enable individuals and companies to invest in environmental projects that promote biodiversity conservation and habitat restoration. These projects can encompass a range of habitats, including rainforests, oceans, grasslands, and more.
Each credit will provide a record of the location of the environmental action, the entities involved in its development, and the metrics used for measurement and verification. During the Summit for a New Financial Pact in Paris, the UK's Environment Secretary presented a plan to amplify global efforts in supporting companies that purchase credits contributing to nature recovery credibly.
The global roadmap will facilitate the exchange of best practices regarding governance mechanisms for credit funding and monitoring systems to ensure biodiversity improvements and equitable income distribution to indigenous peoples and local communities.
The initiative will work towards important international milestones, including the 2024 United Nations Biodiversity Conference (COP16), where biodiversity financing will be a prominent topic of discussion. To steer a joint endeavour, representatives from the UK and France will co-chair an advisory panel. This panel will unite experts worldwide to form diverse working groups to drive positive change in biodiversity conservation and restoration efforts.
Through its 10 Point Plan, the UK government has already emphasized the urgent need to explore the role of biodiversity credits in closing the nature finance gap. France's announcement follows the launch of the Positive Conservation Partnerships (PCPs) at COP27, which recommended the scaling up of biodiversity credits.
Updapt Views:
By collaborating on developing and implementing biodiversity credits, the UK and France are leading the way in promoting innovative solutions to address the global biodiversity crisis and achieve a nature-positive economic system.
The country's financial regulator - The Australian Prudential Regulation Authority (APRA) has been mandated to incorporate climate change risks for the first time.This decision underscores the recognition of the importance of climate risk management in the financial industry.
The updated Statement of Expectations for APRA, released by Australian Treasure, emphasizes promoting transparency and adopting climate reporting standards. The Steps towards mandating climate-related disclosures demonstrate Australia's commitment to proactively addressing climate risks and fostering sustainable finance practices.
Australia's government launched a consultation paper in December 2022 outlining plans to develop a climate risk disclosure framework for businesses and financial institutions. This paper recognized the materiality of physical and transition climate risks to the global financial system and stressed the importance of disclosure as a crucial tool in managing these risks. In parallel, the Treasury Department was entrusted with developing a comprehensive sustainable finance strategy, to which climate risk disclosure is integral.
APRA has already taken proactive steps to assess climate risk factors in the financial system. It conducted its first Climate Vulnerability Assessment (CVA) with the country's five largest banks. The assessment aimed to model the future financial impact of climate change on these banks' businesses and explore potential responses to both physical and transition climate risks. APRA's efforts demonstrate a commitment to understanding and managing climate-related risks within Australia's financial system.
In response to the government's new expectations, APRA has released a statement of intent reaffirming its dedication to promoting prudent practices and transparency regarding climate-related risks. This commitment aligns with the government's sustainable finance reforms and signifies a positive shift towards greater awareness and action in the financial sector.
Updapt Views:
Australia is making significant strides in addressing climate change-related risks within its financial sector. By integrating climate risk considerations and fostering transparency, Australia sets an example for countries worldwide. Climate change poses substantial risks to the stability of financial systems and economies, necessitating proactive measures. Australia's mandate for APRA to incorporate climate risks sends a clear message that regulators and financial institutions must understand, manage, and disclose climate-related risks.
The International Sustainability Standards Board (ISSB) of the IFRS Foundation has officially launched its new global sustainability and climate disclosure standards. These standards are expected to serve as the foundation for emerging sustainability reporting requirements by regulators worldwide, marking a significant milestone in integrating sustainability reporting into the broader financial reporting process.
Starting in January 2024, the new standards will apply to annual reporting periods, and companies will begin issuing disclosures against these standards in 2025.
The ISSB was established in November 2021 at the COP26 climate conference to develop IFRS Sustainability Disclosure Standards. Driven by demand from investors, companies, governments, and regulators, these standards aim to provide a global baseline of disclosure requirements to consistently understand the impact of sustainability risks and opportunities on companies' prospects.
Regulators in major jurisdictions, including Europe, the UK, and the US, have introduced or are preparing mandatory sustainability reporting requirements. The ISSB standards are expected to influence these regulations heavily.
The new standards are "IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information" and "IFRS S2 Climate-related Disclosures." They include disclosures related to general sustainability and climate-specific risks and opportunities, encompassing governance, processes, controls, and procedures used to monitor and manage these risks and opportunities.
IFRS S1 mandates companies to disclose information about sustainability-related risks and opportunities that could reasonably impact their cash flows, access to finance, or cost of capital in the short, medium, or long term. These risks and opportunities arise from interactions between the entity and stakeholders, society, the economy, and the natural environment throughout the value chain, including direct and indirect impacts on business operations.
IFRS S2, designed to complement S1, outlines specific climate-related disclosures. It requires reporting on greenhouse gas emissions for Scopes 1, 2, and 3. The ISSB has granted an extra year for reporting on Scope 3 emissions. Additionally, companies must disclose the percentage of assets and business activities vulnerable to climate-related risks and opportunities, the allocation of capital expenditure and investments towards climate-related factors, and how climate considerations affect executive remuneration.
The ISSB plans to collaborate with jurisdictions and companies to support adopting these standards. It will establish a Transition Implementation Group to assist companies in applying the standards effectively.
Updapt Views:
The standards will contribute to enhanced decision-making, accountability, and the integration of sustainability considerations into financial reporting, ultimately promoting a more sustainable and resilient global economy.
The World Economic Forum's Global Gender Gap Report 2023 reveals that progress towards gender parity has slowed, with the projected year for closing the gender gap remaining unchanged at 2154. While the overall gender gap has closed by 0.3 percentage points compared to the previous year, the rate of change has significantly decreased. The report examines four key areas: economic participation and opportunity, educational attainment, health and survival, and political empowerment.
The 2023 report highlights some positive developments. The educational attainment gap has improved, with 117 out of 146 countries closing at least 95%. However, the economic participation and opportunity gap have only closed by 60.1%, and the political empowerment gap by 22.1%. Achieving gender parity in these areas would require 131 years for overall parity, 169 years for economic parity, and 162 years for political parity.
The report emphasizes that women continue to face challenges in the labor market, especially amidst converging crises such as the COVID-19 pandemic. Although more women have entered the workforce, the gaps in the labor market persist, with women experiencing higher unemployment rates than men. In senior leadership positions, women are underrepresented, accounting for only 32.2% globally. Furthermore, women's participation in STEM must be higher, hindering their access to high-growth and high-earning sectors.
The report also provides regional highlights. Iceland is the most gender-equal country for the 14th consecutive year. Europe surpasses North America in gender parity, with 76.3% parity. Latin America and the Caribbean have made incremental progress, while Eurasia and Central Asia experience stagnation. East Asia and the Pacific have experienced a decline, and Sub-Saharan Africa's progress has been uneven. Southern Asia, the Middle East, and North Africa still face significant challenges in achieving gender parity.
The report calls for collective and bold action from both the private and public sectors to address these gaps. Increasing women's economic participation and achieving gender parity in leadership positions are highlighted as crucial steps towards broader gender equality.
Organizations that prioritize gender strategies attract top talent and perform better economically. Gender parity is also vital for financial stability and overall economic performance. Initiatives such as the Gender Parity Accelerators and the DEI Lighthouse Programme bring together governments and businesses to advance economic parity and share successful diversity, equity, and inclusion initiatives. These collaborative efforts accelerate progress and create more inclusive and resilient societies and economies.
Updapt Views:
The World Economic Forum's Global Gender Gap Report 2023 highlights the importance of gender equality for sustainable development. Achieving gender parity contributes to environmental sustainability, social equity, and effective governance. It calls for collective action by government and business leaders to accelerate progress towards gender equality and foster inclusive, sustainable economic growth.
Norway has taken a significant step towards expanding the use of solar power by mandating the installation of solar panels in all new government buildings from 2024.
The agreement specifies that new government buildings must incorporate solar power or locally produced energy, except in cases where project-specific circumstances prevent their inclusion. The requirement will also extend to more considerable upgrades and refurbishment projects. Furthermore, the government plans to introduce legislation in 2024 to enforce the same rules for more significant commercial buildings.
The budget deal also aims to streamline the permitting process for new commercial solar power installations and remove barriers to local distribution of solar-generated electricity. These measures are expected to facilitate the wider deployment of solar power in Norway.
To further bolster the country's solar power capacity, Norway has set a target of producing eight terawatt hours (TWh) of solar power annually by 2030. This target represents approximately 5% of the country's annual electricity output, primarily from hydro and wind power sources.
Solar power contributes only around 0.3 TWh per year in Norway, according to the energy regulator NVE. In comparison, neighbouring countries like Sweden generate 1.2% of their power from solar energy, while Denmark's solar power meets 6.1% of its energy demand.
Updapt Views:
Norway aims to diversify its energy mix by adopting solar power and achieving a more sustainable and resilient future. And starting with the government buildings sets an excellent example for the private owners and influences other countries to look at the advantages of solar power.
