International institutions sign an IDB-led joint statement at COP26 and announce plan to mainstream nature into policies, analysis, and investments
Glasgow - Multilateral Development Banks (MDBs) led by the Inter-American Development Bank (IDB) pledged today to mainstream nature across their policies and to significantly boost nature finance for member countries. The banks' joint statement "Nature, People, and Planet" commits support for countries to define and enact sustainable strategies.
IDB President Mauricio Claver-Carone led the announcement during the World Leaders Summit event on Forests and Land Use at the UN Climate Change Conference COP26.
"Natural capital is critical in post-COVID-19 recovery for Latin America, the Caribbean, and the world. It creates jobs, generates income, leverages private-sector investment, and resiliently protects critical ecosystem services. That's why the IDB has redoubled its work on climate change and biodiversity in the last year, and why it constitutes a core pillar of our Vision 2025 for the recovery of the region," Claver-Carone said.
The MDBs' commitment focuses on five pillars:
- Leadership: Setting out institutional strategic approaches to further mainstream nature into analysis, assessments, advice, investments, and operations by 2025;
- Fostering 'nature positive' investments: Developing projects, business models and financing instruments to support economic activity that seeks to reverse the drivers of nature loss and promote its protection and regeneration;
- Fostering national and regional level synergies: Encouraging public and private sector and international organizations to work together and supporting governments to revise their National Biodiversity Strategies and Action Plans according to the post-2020 Global Biodiversity Framework;
- Valuing nature to guide decision making: Using existing and new tools for public and private sector clients to better value, sustainably manage, protect, and restore nature and its natural assets to deliver development benefits;
- Reporting: Aligning objectives and developing collaborative tools and methodologies for tracking 'nature positive' investments across portfolios and enhancing public reporting on efforts and initiatives to mainstream nature in analyses and operations.
The MDBs signing the statement along with IDB are the African Development Bank Group, the Asian Development Bank, the Asian Infrastructure Investment Bank, the Caribbean Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the Islamic Development Bank, and the World Bank Group. The statement is available here.
The United Nations estimates that global oceans and terrestrial ecosystems are each absorbing 25% of emissions, and nature-based solutions could account for 40% of the carbon emission reduction needed to limit global warming to below two degrees Celsius by 2030.
Latin America and the Caribbean have the most critical assets to nourish nature-based solutions. Besides being home to seven of the 25 biodiversity hotspots, the region accounts for 40% of the world's biodiversity, 30% of the freshwater, and almost 50% of the world's tropical forests. However, this natural asset is not being tapped, and nature-based projects in the region are not achieving their full potential, primarily due to a lack of technical knowledge, strategy, and funding. In some cases, policies still act as negative subsidies for biodiversity.
Holistic approach on natural capital
Over the past five years, the IDB has invested over $800 million in 28 projects with nature-based solutions components. The Bank implemented new financing mechanisms under a holistic approach focused on improving climate and healthier ecosystems, as well as new opportunities for green jobs and growth. One example is the Natural Capital Lab, a financing lab devoted to mainstreaming and supporting innovative finance projects across the Bank.
This year, the IDB launched a new natural capital asset class at the New York Stock Exchange. This will enable countries to convert their natural assets into financial capital, trade the ecosystem services they provide, and attract institutional investors. The Bank helped Costa Rica become the first country to offer its natural assets on this innovative platform.
The IDB also developed the Amazon Initiative, a program to support bioeconomy and regenerative activities in the Amazon Basin. In addition, the Bank secured $279 million from the Green Climate Fund (GCF), the world's largest climate fund, to fund a $600 million facility to leverage investments in support of climate change adaptation and mitigation in the Amazon basin.
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social, and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance, and training to public and private sector clients throughout the region.