This is Maverick’s first lesson when tasked with teaching a younger generation of fighter pilots. Nobody knows better than him how to cut corners in the air and skim over sand dunes. He is the master of seconds. 

Barnabé

<img src="https://illuminem.b-cdn.net/articlebody/6046e7c9367521c8adadf187143a726c46ccfe70.png" alt="Figure 1: Tom Cruise as Maverick piloting a jet, source (Top Gun Maverick 2022)">
<blockquote>Time is your greatest enemy</blockquote>
- Top Gun: Maverick 
This is Maverick’s first lesson when tasked with teaching a younger generation of fighter pilots. Nobody knows better than him how to cut corners in the air and skim over sand dunes. He is the master of seconds.
Yet throughout Top Gun, a longer scale of time overlays the narrative, where Maverick confronts age, loss, and memory. We discover a man ill-equipped for the future. Once in-flight targets are met, what comes next?
The film engages with the intense pressure of time-bound windows of opportunity, both short and long. His relationship with the younger “Rooster” deals with the consequences of missing them.
We&#x27;re feeling this tension between short and long scales of time every day in our efforts to limit planetary overshoot. On the one hand we must act now or accept to become spectators of climate breakdown. As I write this France undergoes historic fires, Spain historic droughts, China historic floods, and a glacier in the Dolomites has collapsed. Russia forces fossil fuel scarcity onto Europe and food prices spiral worldwide. Our present is warning us of our future.
On the other hand, deep decarbonisation won’t happen overnight. We know this because we’re timing the process. 1.5-degree peak in 2025, nature positive by 2030, net zero by 2050. Scenario analysis and science-based targets locking dates into corporate strategy and government policy are the promises we’re making to the future. Just like Maverick doesn’t switch on autopilot until the last second to then crack his fingers ready for action, organisations are building the skillset to fly and sustain transformation over time.
<h1>Ecological planification is an orchestration of long time.</h1>
But long time must be more than a date and a technical roadmap. The Energy Transitions Commission <a href="https://www.energy-transitions.org/publications/making-mission-possible/">says</a> &quot;it is undoubtedly technically possible to achieve net-zero emissions by around mid-century at very small costs&quot;. If we have the technology and resources to decarbonise at scale, why are all indicators going darker red? Lack of behaviour change and political will are important factors. And they lack precisely because short-termism is locked into Western practices of human organisation.
Long-term resilience is absent from the way we consume. Fast fashion, fast food, fast life. There is a complete disconnect from the simple fact that our consumption – through its social and environmental footprint – destabilises the interest of our future selves and the multitude of other members of our community, the biosphere.
Long-term perspectives are absent from our information networks. The 140-character attention span refuses subject matter complexity. At best news channels feed us simplified snippets of the future, at worst politically charged deformations. Climate scientists, meteorologists, and activists being portrayed as <a href="https://www.bloomberg.com/news/articles/2022-07-21/interview-uk-heatwave-sparks-viral-don-t-look-up-moment-for-weatherman#xj4y7vzkg">alarmists</a> are constantly resurfacing on television. Another film, Don’t Look Up, captured this perfectly.
Long-term debates are absent from our democracies, incapable of existing separate from their electoral calendars. Politicians’ rushed and highly calculated treatment of era-defining issues prevents substance from actually reaching voters. In April, contenders for the French presidency spent a mere <a href="https://www.numerama.com/sciences/930479-17-minutes-sur-2h30-la-place-catastrophique-de-lecologie-dans-le-debat-macron-le-pen.html">17 minutes</a> of a 2.5 hours debate presenting their long-term energy plans. Food, biodiversity, and climate adaptation were absent altogether. Nor do any elected officials or candidates admit the true costs and time required for an energy transition. The construction of political narratives is a game of maximal short-term gain, and the interest of future generations doesn’t enter those calculations in their current form.
<img src="https://illuminem.b-cdn.net/articlebody/b4639d861b60785c3075ebab4e902fc05ad51550.png" alt="Figure 2: Leonardo Di Caprio Screaming as Dr. Randall, source (Don't Look Up 2021)">
Reasons explaining this appetence for immediacy are numerous, but at their core lies our faith that markets and efficiency can infinitely enlarge a pie that everyone can take a piece from (some much more than others), and that eating it will bring us happiness. Happy individuals and prosperous nations. So we eat more of it, are forcefully fed more through our screens, and keep asking more from our leaders, who themselves are locked into making more. All this in the knowledge that every extra piece contributes to a future where there is nothing left to eat.
Hence cultural reconciliation with the future must complement the technical orchestration of long time. We should disagree with Maverick and stop seeing time as our greatest enemy. As much as immediate action on all fronts is needed, right now, calls for it are not unlocking change fast enough. Emissions keep rising. Natural carbon sinks are being lost. Species are dying at tragic speed. But a society sick with immediacy cannot heal itself with immediacy. Surely it&#x27;s the articulation of a long-term narrative for us as a species, a common horizon, that will drive more results in the short-term. In that sense, thinking ahead is in no way a renouncement of urgent action. The time we have ahead of us should be time to see trees grow from seeds we plant today.
<h1>This reconciliation first requires a shift in perception of the timescale we&#x27;re operating on.</h1>
Recurrence of cycles has characterised human history. It was punctuated by the changing of seasons precisely because the planet ensured the stability of cycles. Climate change and species loss – consequences of our geological footprint – will make the future anything but cyclical. We are seeing processes unfold that won&#x27;t stop for centuries to millennia. Humanity has dismembered and massively elongated the timescales of its own existence on Earth.
Those who decry environmentalism as a step backwards don&#x27;t want to understand that we have changed epoch at a much deeper level, and that we are marching headfirst into it. <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3574335/">There is no precedence</a> of entire societies mobilising to meet worsening conditions that threaten collapse for future generations.
<h1>As a result, efforts must be conducted with ecological timescales in mind.</h1>
Individuals, institutions, organisations, nations, and regions do not exist independent of long time. By making demands on natural systems through consumption, transport, heating, savings, taxes, and so on, we increase the likelihood of those systems&#x27; destruction. What we do in the present connects us to the effects taking place over the &quot;deeper&quot; future. But that&#x27;s also true for the restoration side of the equation. Initiatives that restore ecosystems will drive benefits over similar timescales. Scientists, economists, and systems thinkers across the world are imagining a society where those benefits would be maximised precisely because society takes the form of the restoration process itself. According to Daniel Wahl, &quot;we have to reinhabit the places and ecosystems we live in as a regenerative and healing presence&quot;.
<img src="https://illuminem.b-cdn.net/articlebody/498ecd2fd8b18db279c0798f7cc3cfe2c8e32b6e.png" alt="Figure 3: Graph showing the evolution of areas of available for technologies in an economy and how they affect the nature of that economy. Source Regenerative Capitalism, Fullerton 2015 https://capitalinstitute.org/regenerative-capitalism/">
In this scenario, individuals, institutions, organisations, nations, and regions would find value in guaranteeing the health and balance of their surrounding systems over time. An ideal future would be one where each member has <a href="https://capitalinstitute.org/regenerative-capitalism/">unleashed full potential for true wealth creation</a>. Whereas deteriorating global commons are currently slow changes in the background of our embedded society, the restoration of the biosphere must be slow changes taking centre stage in the modus operandi of businesses, states, and individuals. Species intactness, soil biodiversity levels, water quality and capacity, and emissions reduction will be the metrics for success. The guide will be a re-alignment of our culture&#x27;s compass, away from the maxim of prosperity through instant gratification, and towards one of regeneration over time.
<h1>If there is one guiding principle, it is that the future gives meaning to the present.</h1>
The virtue of a long-term perspective goes beyond a global mission; it is the essence of individual prosperity. Do we not find fulfilment in the things nurtured over time, our family, friends, and enterprises? The joy at buying a house stems from the memories we hope to build within its walls. Imagined futures are the motor of human endeavors. We all know this already, but it lies dormant beneath the ‘stuff’ taking our energy but not improving our overall welfare. To quote Tim Jackson, “investing in the future is the best – perhaps the only – way to render our own lives meaningful today”.
Future Thought Leaders is a democratic space presenting the thoughts and opinions of rising Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.
<h3>Further Reading:</h3>
<a href="https://www.noemamag.com/the-politics-of-planetary-time">The Politics of Planetary Time – Nathan Gardels</a>​ 
 
<a href="https://timjackson.org.uk/ecological-economics/postgrowth-book/">Post Growth - Tim Jackson</a>​ 
<a href="https://designforsustainability.medium.com/building-a-regenerative-future-4b6bf40842b6">Building a Regenerative Future – Daniel Wahl</a>​ 
<a href="https://capitalinstitute.org/regenerative-capitalism/">Regenerative Capitalism - John Fullerton</a>​ 
<a href="https://www.jstor.org/stable/40835531">Political Short termism – Iconio Garri</a>​

Our Greatest Enemy

In March, the TNFD released a prototype of its long-awaited nature-related risk management and disclosure framework. A guide for financial institutions and corporates to measure their impacts and dependencies on nature, and risks stemming from biodiversity loss, the framework marks the emergence of nature into international financial policy. It is a sign that the right questions are being asked. 

In March, the <a href="https://tnfd.global/">TNFD</a> released a prototype of its long-awaited nature-related risk management and disclosure framework. A guide for financial institutions and corporates to measure their impacts and dependencies on nature, and risks stemming from biodiversity loss. The framework marks the emergence of nature into international financial policy. It is a sign that the right questions are being asked. Most notably, how do we address our systemic failure to price nature’s services within economic models? How do we measure a company, government or person’s impact on nature, knowing that ‘if nature is destroyed, life will <a href="https://www.gov.uk/government/publications/final-report-the-economics-of-biodiversity-the-dasgupta-review">cease to exist</a>’? And most importantly, how do we start thinking about an economy that integrates the inescapable fact that human systems are entirely dependent on natural systems?
Conservationists have been battling with these questions for decades, but now the C-suite are also paying attention. While a relief, the business case for protecting nature is fraught with complexities and limitations. TNFD will be in open consultation and development until September 2023 at least; we remain in the early depths of the labyrinth. The five questions that follow measure the temperature of current progress in aligning nature and finance.
<h1>Why do companies need to understand nature-related risks?</h1>
Anthropocentrism has led us to believe that somehow human systems have outgrown nature. Artificial and processed, everything from our light to our food and clothes points to a profoundly un-natural socioeconomic fabric. But the distance between nature and economy is a fiction mounted in misperception. We are entirely dependent on the services ecosystems house. A silent yet very active sub-structure of our daily lives, nature feeds, clothes, houses us, keeps us healthy and cures us, employs and entertains us. Water provision fed the industrial processes that built the screen I’m typing on. Wetlands protected the screen’s factory from floods, allowing its smooth functioning. Nearby forests made the air breathable for employees; pollination gave those employees lunch, and the energy it needed to grow.
Through their activities, companies have a deteriorating impact on precisely the natural capital assets they require for their activities. Pollution of air, water and soil, fragmentation of ecosystems and habitats for non-human species all reduce the diversity ecosystems need to thrive. That challenges the availability of such assets. Losing natural capital has a very tangible feel in the real economy. It <a href="https://www.ngfs.net/sites/default/files/medias/documents/biodiversity_and_financial_stability_exploring_the_case_for_action.pdf">means</a> capital destruction, volatile raw material prices, disrupted value chains, stranded assets…
<img src="https://illuminem.b-cdn.net/articlebody/4fd1b2a451c10dddcde829c94f3f9980bb7e16f2.png" alt="Figure: Biodiversity, the economy and the financial system. 
Source(https://www.ngfs.net/sites/default/files/medias/documents/central_banking_and_supervision_in_the_biosphere.pdf)">
For example, the Banque de France <a href="https://publications.banque-france.fr/sites/default/files/medias/documents/wp826_0.pdf">modelled</a> the ecosystem service dependence of securities held by French financial institutions. 42% are highly to very highly dependent. As those institutions continue to finance agriculture, infrastructure, and urbanisation practices that destroy species tens of thousands of times faster than at any point in history, they expose entire buckets of the global economy to extreme physical risk. Biodiversity and economic stability are mutually deteriorating. Climate change is the self-reinforcing feedback loop that comes on top.
<h1>How can businesses account for nature?</h1>
Understanding impact is the gateway to correctly pricing nature risk in portfolios and business strategies. To a larger extent than carbon emissions in a value chain, biodiversity impacts are spatially dependent. A mining company operating in both Chile and Australia will use similar industrial processes in both locations, probably resulting in similar emissions. But the species intactness, water and nitrogen levels, and air quality will be different because the company interferes with local organisms and ecosystem-dependent processes in opposed but also innumerable ways. This is why the TNFD’s risk assessment process encourages users to ‘Locate’ their activities as a first step. In this regard, ESG analysts can get ahead by requesting data points from their clients for each asset in their portfolio, including Scope 3.
Measuring the biodiversity impact of those assets is more complex. Two requirements – a quantifiable scope and data availability – are problematic. Metrics must ensure both complexity of analysis and comparability across different spatial and ecological dimensions. As opposed to climate reporting, an aggregate metric may not satisfy these two conditions for biodiversity, precisely because there is no nature equivalent of CO2. What to scope and at what granularity remains unclear. As <a href="https://www.financeforbiodiversity.org/wp-content/uploads/Finance-for-Biodiversity_Guide-on-biodiversity-measurement-approaches.pdf">stated</a> by the Finance for Biodiversity Pledge, biodiversity metrics measure different things to answer different questions.
Spatial diversity makes the measurement approach data-heavy. <a href="https://www.wwf.org.uk/sites/default/files/2022-01/Geospatial_ESG_Report.pdf">70%</a> of investors cite lack of data as a barrier to investing in biodiversity conservation. On the technical side, detailed ground assessments will be key to disclosing impact metrics such as species abundance. Fortunately, interest from the private sector is emerging at a time of rapid <a href="https://knowledge.insead.edu/responsibility/biodiversity-why-should-business-care-18536">technological improvement</a> in geospatial data, AI, and eDNA. On the operational side, insights will be dependent on the <a href="https://www.f4b-initiative.net/publications-1/-open-source-biodiversity-data-platform-initiative">combination</a> of ‘asset-level data’ with ‘observational data’ to monitor biodiversity material risks and impacts of portfolios.
Absent international targets for nature conservation, scoping and measurement will remain at the discretion of individual companies and standard-setters. As a result, to cite a nature lead at UNEP FI, ‘the nature disclosure landscape is becoming as diverse as nature itself’. COP15 targets – if separated into biodiversity impact drivers and also broken down into regional drivers – would no doubt lead to a clearer selection of metrics, in turn putting order into the data infrastructure.
<h1>Is biodiversity disclosure sufficient?</h1>
The climate risk framework TCFD is becoming a disclosure standard in several high-emitting jurisdictions, United States included following recent SEC <a href="https://www.lexology.com/library/detail.aspx?g=8ce2790d-77ca-486c-9e94-cc7460b7580a">announcements</a>. Judging from this trajectory and regulators’ growing interest in biodiversity (<a href="https://www.eubusiness.com/Members/WWF/biodiversity-recommendations">EU Taxonomy</a>, <a href="https://www.tresor.economie.gouv.fr/Articles/2021/06/08/publication-of-the-implementing-decree-of-article-29-of-the-energy-climate-law-on-non-financial-reporting-by-market-players">France Article 29</a>), TNFD developments should crystallise norms over time. The hope is that five years down the line, firms globally report on their nature-related risks. But disclosure is only half the battle. Through harm-reduction strategies, organizations mitigate the deterioration of natural capital assets. But they do not provide a lasting solution to the impacts of exceeded planetary boundaries, nor do they ensure a stable development path that recognises those boundaries. To reach the CBD’s objective of full nature restoration by 2050, organizations must go further, seeking opportunities that benefit both biodiversity and business outcomes.
‘Nature-positive’ is emerging as a narrative for nature restoration. In this scenario, ecosystems and economy are interdependent and offer mutual returns; goods and services, finance, tech, and supply chains all deliver positive outcomes for nature. This requires no less than transforming the most nature-intensive economic systems, but also tackling the indirect drivers of nature loss: trade, consumption patterns, governance mechanisms and values in society. Going nature-positive in critical economic sectors could <a href="https://www.weforum.org/agenda/2021/06/what-is-nature-positive-and-why-is-it-the-key-to-our-future/">unlock</a> US$10 trillion of business opportunity and 400 million jobs by 2030.
<h1>How do we finance nature-positive?</h1>
Private finance has a determinant role to play in placing biodiversity at the heart of economic development. As already stated, the main problem is that nature’s services are not monetized. Financial products, in essence allocation of capital, must return biodiversity benefits. Within the range of products and current gaps, it is useful to differentiate direct and indirect biodiversity benefits.
For direct benefits, the creation of cashflows contributes to enhanced biodiversity, through projects that restore ecosystems. For example, offsetting implies investment into the conservation or restoration of a wetland, forest, seagrass meadow … rewarded by carbon credits and enhanced carbon sequestration. Conversely, indirect benefit concerns support for sustainable business practices. Rather than investing in projects directed at conservation, it is the activities of an organization that results in positive biodiversity impacts. One example could be a large agri-food business implementing regenerative soil management. Here, equity investments in mission-driven enterprises are only one side of the coin; engagement with existing players in the economy, and especially the harder-to-abate sectors, is the other.
Financial institutions have the capacity to allocate preferences in the real economy, even when engaging with laggards. To stimulate the creation of nature positive markets, both direct and indirect investments in nature must be co-developed. Restoration does not halt biodiversity loss if business as usual carries on at higher levels. To strike a positive balance, the monetization of pressures on nature must be drastically reduced, through investment in durable business practices (see figure below).
<img src="https://illuminem.b-cdn.net/articlebody/ca1fba8cdc58761081d358a28079fe16c5c50fa5.png" alt="Figure 2: Investment Flows
Source: Little book of Investing in Nature, Global Canopy (2021)
https://globalcanopy.org/wp-content/uploads/2021/01/LBIN_2020_EN.pdf ">
<h1>What’s the end goal?</h1>
As value creation weakens its creators, they have no choice but to adapt their understanding of value itself. ‘Nature-positive’ is not just a business opportunity, a branding tool or a line in a sustainability report. A nature-positive economy will be one that behaves like nature: nature regenerates, and it needs sufficient time and capacity to do so. In fine that means we need to systematically reduce our demand for – pressure on – natural ecosystems. Operationalising that business model is impossible under current consumption rates. However, in the attribution of value to ecosystem services, we have a chance at re-aligning the priorities of human welfare. Environmental services can rapidly become <a href="https://www.frontiersin.org/articles/10.3389/fclim.2022.855803/full">measures of output and wellbeing</a>, both for individuals and corporations. Co-benefits for climate change mitigation and Sustainable Development Goals are numerous. Measuring biodiversity impacts and dependencies in the financial and corporate sector is an essential step to reconsidering the fundamentals.
Future Thought Leaders is a democratic space presenting the thoughts and opinions of rising Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

5 questions on the interplay between biodiversity and finance

Biodiversity degradation is an under evaluated knock-on effect of trade liberalisation. Today, Europe ‘imports’ 90% of its deforestation. There is a clear need to integrate beyond-the-border impact into accounting practices.

Biodiversity degradation is an under evaluated knock-on effect of trade liberalisation. That’s because enhanced demand through free trade agreements (FTAs) <a href="https://www.europarl.europa.eu/RegData/etudes/IDAN/2020/603494/EXPO_IDA(2020)603494_EN.pdf">increases</a> land clearing, whether that be due to agriculture, mining, fishing or hydrocarbon extraction. Costs on climate, linked to energy-intensive industrial production and freight transport, are also <a href="https://www.wto.org/english/res_e/publications_e/trade_climate_change_e.htm">enormous</a>. Since 2019, opposition to the <a href="https://www.euractiv.com/section/climate-environment/opinion/the-eu-must-not-greenwash-the-future-destruction-of-the-amazon/">EU-Mercosur deal</a> has been rooted in the weakness of commitments against deforestation in Brazil. Conversely, biodiversity-related provisions were completely absent from CETA. These practices demonstrate the incompatibility between domestic engagements and Europe’s presence abroad. Today, Europe ‘imports’ 90% of its deforestation; there is a clear need to integrate beyond-the-border impact into accounting practices.
<img src="https://illuminem.b-cdn.net/articlebody/e9d1b3450c794018a8c96410a69673f1259840b1.png" alt="Figure 1: Map of imported deforestation. Source: Our World in Data​ 
">
Aligning conservation and liberalisation stands high on the European Union’s trade agenda. On 19 May, the European Commission released a methodology for quantifying negative net impacts of trade on biodiversity. Through the methodology, FTA impact assessment will comprise of three core steps: 1) screening and scoping priority impacts, 2) choosing a method to measure the impacts, and 3) presenting the wider context for interpretation.
Application of the proposed method to the EU-Colombia FTA, for example, found the horticultural sector to be a priority impact area, due to immense pressure on land use conversion from coffee and cocoa production. Measurement of biodiversity impact was conducted through estimations from previous FTA land use change, as well as geospatial modelling (see picture below). Calculations found that FTA-induced output change resulted in 3,500-4,000 hectares of land being permanently deforested (0.5% of total agriculture-related deforestation). The step-by-step approach emphasises flexibility to accommodate FTAs with all countries, irrespective of both biodiversity intensity in a given geography and level of protection.
<img src="https://illuminem.b-cdn.net/articlebody/1b808f3852c8ea63b2c98f33c7ce88df9a93fd86.png" alt="Figure 2: Spatial analysis of FTA-induced deforestation in Colombia. Source: European Commission​ ">
Trade is one of Europe’s primary economic policy instruments. Immense market size allows for an unequalled power of attraction, facilitating conditionality practices in bilateral or regional EU trade agreements. Trade tools integrating physical risk align European transition engagements at the domestic level with the bloc’s engagement in global value chains. They also serve as a diffusion lever, incentivising reciprocal uptake by trading partners. Most trade agreements today prioritise material factors over environmental ones. Without an adequate measurement of environmental effects and potential trade boundaries, European Green Deal commitments will fall short.
This latest methodology joins a host of proposed policies that seek to internationalise European Green Deal principles. Others include the border adjustment carbon tax and the sustainable finance taxonomy for third party investments. Europe must keep building momentum towards these potentially global norms; trade is of paramount importance in this regard.

Future Thought Leaders is a democratic space presenting the thoughts and opinions of rising Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

Measurement of the trade-biodiversity nexus

It’s imperative that the recovery from Covid-19 be compatible with climate and nature. That’s why a growing number of voices in policy and finance have called for approaches that endorse sustainability-oriented debt instruments. With $281 trillion total active sovereign debt globally, this can be a great avenue for advancing natural capital principles.

xFalls in FDI and trade imposed by lockdowns, concurrent with the need to manage unstable health and economic systems, has plunged low-income countries (LICs) into a debt spiral. Globally, sovereign debt has increased by around <a href="https://www.ft.com/content/289a2570-f8f4-47e7-9004-36f1649f93d3">$10 trillion</a>. Not to say that it was stable before the pandemic; in fact, the IMF <a href="https://www.imf.org/en/About/FAQ/sovereign-debt">signalled</a> half of LICs were in debt distress in January 2020. But the emergency fiscal stimulus packages being deployed globally show countries are going beyond rationales of debt vulnerability, instead investing in much needed social infrastructure. Mass sovereign debt restructuring is around the corner.
<img src="https://illuminem.b-cdn.net/articlebody/0a93dcd5fc4123380b51071ae8133b22bffe83ed.png" alt="Figure 1 source: https://blogs.worldbank.org/opendata/what-pandemic-means-government-debt-five-charts">
It is imperative that the recovery from Covid-19 be compatible with climate and nature. That’s why a growing number of voices in policy and finance have called for approaches that endorse sustainability-oriented debt instruments. With <a href="https://barnabecolin.com/2021/05/01/reconciling-sovereign-debt-and-natural-capital-in-low-income-countries/value%20that%20nature%20delivers%20to%20the%20economy">$281 trillion</a> total active sovereign debt globally, this can be a great avenue for advancing natural capital principles. Natural capital represents the value our economies derive from nature, and on which they depend. As climate change and environmental degradation intensify, we lose natural capital, with knock-on effects on financial and economic stability.
More and more people now recognise the interoperability between economic and ecological systems, the fact that agricultural output needs pollinators, or that our cities depend on the provision of natural resources and ecosystem services. LICs are home to large portions of the world’s critical biodiversity. Neglecting its conservation will have severe consequences for these countries’ wealth, but also global repercussions. In the current context, debt restructuring appears as a means of safeguarding natural capital. First introduced by conservationist Thomas Lovejoy in 1984, debt-for-nature swaps have never reached sufficient sums, due to the inherent challenges of debt restructuring negotiations. Thus, new frameworks should be envisaged.
<img src="https://illuminem.b-cdn.net/articlebody/910cd094ef454cacc5974854a34a7093e226f14e.png" alt="Figure 2 source: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/909202/ncc-terminology.pdf">
For nature to have its rightful place in debt portfolios, incentives must be provided on both sides. Attaching <a href="https://www.eco-business.com/opinion/greening-sovereign-debt-restructuring/">green-performance-linked</a> interest rates to securities or local currency swaps would better enable sovereigns to protect their natural assets. For creditors, natural capital could serve as a condition for a debtor’s <a href="https://a1be08a4-d8fb-4c22-9e4a-2b2f4cb7e41d.filesusr.com/ugd/643e85_021432a338a34c3e92237ffdd128404c.pdf">creditworthiness</a>, informing their investment decisions. According to the <a href="https://www.f4b-initiative.net/publications-1/-recapitalising-sovereign-debt%3A-policy-briefing">Finance for Biodiversity Initiative</a>, the priority is twofold. First, multilateral financial institutions must support a common framework for green sovereign debt relief. Second, investors need the guarantee that green debt serves their needs, can be easily priced, and provides adequate liquidity.
One <a href="https://www.lse.ac.uk/granthaminstitute/news/how-could-sustainable-finance-help-avoid-an-emerging-market-sovereign-debt-crunch/">idea</a> put forward is the creation of a designated fund connecting investors with SDG-related market debt. Refinancing would be geared towards nature conservation projects or simply infrastructure development respective of natural capital. Green bonds would then be phased in progressively. The Green Economy Coalition <a href="https://www.greeneconomycoalition.org/news-and-resources/how-debt-for-climate-and-nature-swaps-can-support-a-green-recovery">notes</a> that this approach does not erect barriers to sectors like health or education. In fact, nature conservation can go hand-in-hand with systemic SDG pursuit.
Gathering political momentum around this issue will be of utmost important in 2022, as a post-2020 Global Biodiversity Framework is established at the CBD15. Multilateral development banks in particular will seek to converge private capital with their own sustainable bonds. States will need to endorse such a reward-based debt framework, with precursors able to draw from the experience of green bond issuance; France, for example, has so far issued <a href="https://www.bloomberg.com/news/articles/2021-03-16/france-offers-second-green-bond-to-cement-status-as-top-issuer">$40.7bn</a> worth of green sovereign bonds. The momentum among industrialised countries must diffuse across the lower-income bracket, so as to avoid yet another fossil-intensive round of debt restructuring.
Future Thought Leaders is a democratic space presenting the thoughts and opinions of rising Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

Reconciling Sovereign Debt and Natural Capital

Much of the ongoing global extinction is taking place underground. Soil, the most biologically diverse material on Earth which feeds us and protects us , is a cornerstone of life driven to irrelevance by our mechanised understanding of nature.  To maintain its ecosystem services, soil needs to be as diverse as possible.


Much of the ongoing global extinction is taking place underground. Booming metropolises of biological production and exchange crumble in silence, at a rate of <a href="https://www.nature.com/articles/s41467-017-02142-7">75 billion tonnes</a> per year. Soil, the most biologically diverse material on Earth, is a cornerstone of life driven to irrelevance by our mechanised understanding of nature. Soil feeds us, its small inhabitants providing nutrients necessary to grow food. Without healthy soils, land agriculture – a foundational human invention that’s shaped commerce, guided empires, and sustains contemporary economies – becomes impossible. Soil protects us, as a natural flood manager and the <a href="http://www.fao.org/fileadmin/user_upload/soils-2015/docs/EN/EN_Print_IYS_food.pdf">largest</a> storage capacity for carbon on land, capturing our emissions to limit climate change. Without healthy soils, surface biodiversity and all plants, including forests, would stay in the ground. To maintain these ecosystem services, soil needs to be as diverse as possible.
In <a href="https://www.researchgate.net/publication/226818886_The_Representation_of_Soil_in_the_Western_Art_From_Genesis_to_Pedogenesis">Western art</a>, soil has always been represented as a surface, a mere channel that carries the weight of life and hides the dead, devoid of an existence of its own. This lifeless understanding of soil perpetuates today; we suffocate land with chemical fertilisers, disrupting the eco-systemic relationships required for soil to thrive. Our mono-cultural approach to growing food, streamlined for industrial optimisation, has left land in dire condition. Our status quo is thus the very antithesis of biological diversity and resilience.
<img src="https://illuminem.b-cdn.net/articlebody/0a9b50f0b9a96c439a7c28d8026cb8eb2d494b98.jpg" alt="The Last Judgement, van der Weyden">
<h6>The Last Judgement, van der Weyden</h6>
Protecting soil biodiversity is not only a farmer’s problem, who must abandon eroded land and search for new livelihoods, but an essential pathway for food security, political stability, and climate change mitigation. Yet attention given to soil is slim relative to its weight in the climate and nature puzzle. A combination of decarbonisation-centric governance structures and <a href="https://www.bloomsburycollections.com/book/thinking-with-soils-material-politics-and-social-theory/ch5-knowing-earth-knowing-soil-epistemological-work-and-the-political-aesthetics-of-regenerative-agriculture#b-9781350109568-ref5_2">assumptions</a> that soil sequestration capacity will remain unchanged, has relegated agriculture in climate summits. In particular, small-scale farmers in low-income states asymmetrically hit by drought, are at the heart of innovative solutions but continue to feel overpowered by <a href="https://www.devex.com/news/small-farmers-say-they-re-overlooked-in-climate-talks-101567">top-down agribusiness practices</a>.
Connecting the dots between agriculture and biodiversity starts at the local level, on the farm. Incentives must exist for farmers who work on low profit margins, and who find it hard to shift production processes. Subsidies can accompany the uptake of ecosystem-based management and even regenerative practices, which boost profitability in the long run. But it’s performance-based compensation that can really convince a move away from mechanised tillage and fertilisers. For example, Soil Capital prices the carbon sequestration capacity of a farmer’s land in the form of a direct payment. 157 European farmers have so far subscribed, with an average of €25 per tonne of carbon. This type of Payment for Ecosystem Services (PES) quantifies the importance of land for agriculture and makes it easier for a farmer to transition away from a rationale of short-term productivity. In <a href="https://www.annualreviews.org/doi/10.1146/annurev-environ-033110-092827">China</a>, users of residential and industrial water pay farmers who limit soil erosion. Linkages between upstream land use and infrastructure can be better understood by bringing the work of farmers into the spotlight.
<img src="https://illuminem.b-cdn.net/articlebody/c57bc579409b93340ff2dc9a7f6945b3c273fa2c.png" alt="Soil Capital">
<h6>Soil Capital</h6>
On a more generalised level, reliable accountancy is a requirement for investors and farmers looking to enter this space. However, harmonised methodologies don’t yet exist for measuring soil carbon stock changes. As with much related to nature, soil is a complex system, requiring different practices based on which climate zone, country, region, or even square metre in a field you farm. Data collection can be tricky and accessibility to smallholder farms undermined. Developing industry-wide frameworks, where scientific expertise, farmers’ experience, and reliable datasets are made readily available, can help diffuse norms faster.
On a society-wide level, better representation of soil in our minds, consumption patterns, and politics comes first and foremost through a better understanding of food systems. ‘People don’t know where their food comes from, it’s all theoretical’. Richard Heinberg aptly labels how our hyper-globalised economies have engrained a disconnect between farm and fork; we eat food without questioning the capital – both natural and human – within it. Through our blinded eating habits, we sustain destructive industrial and commercial processes. Processes that annihilate biodiversity, the condition for life. Processes that damage our immune systems and make us more susceptible to developing disease. Processes that waste resources on a gargantuan scale, with harvest the equivalent land size of India and Brazil combined thrown away every year. Exacerbated by pressures from climate change, our food systems are destined to fail, with immense repercussions on human lives. Madagascar’s ongoing famine is testimony to our immense dependence on stable agriculture, directly challenged by our climatic predicament.
David LeZaks highlights health as an emergent axis to address soil erosion and land degradation, for it concerns us all. Better soil treatment can improve food’s nutritional quality, transfer microbial benefits to humans, and eliminate the damaging presence of agrichemicals. Changing what’s in our plates, holding our governments accountable for land protection, supporting local farmers: these decisions are about healthy bodies as much as they are about healthy land. From the individual to the state level, links between nature and survival must increasingly be unlocked.
During a speech connecting nature and geopolitics, UNEP director Inger Andersen succinctly <a href="https://www.iucn.org/news/secretariat/201903/nature-fertile-ground-geopolitics-and-sustainable-development">argued</a> that one of the main causes of disaster is our ‘siloed mentality’. Each discipline, institution, or expert drives their solution in a compartmentalised fashion when what’s needed is transversality. Opposite nodes must meet for impactful ideas to emerge. Approaching soil as a financial opportunity, a geopolitical metronome, a doctor, and a bastion of innovation – all at the same time – will expand debates around a material that remains underappreciated. If more biodiverse farming practices become commonplace, our crops will be more productive, more resilient to coming shocks, better for our bodies, they’ll empower local communities and reduce the probability of interstate resource conflicts.
Future Thought Leaders is a democratic space presenting the thoughts and opinions of rising Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

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Barnabé Colin

Barnabé Colin

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