Ask a Scientist: Sustainable Finance and Biodiversity
How can we encourage sustainable investments in forests that ensure biodiversity? What can science tell us about indicators and measurements, targets, and thresholds? How does all this relate to the EU Taxonomy, and other green finance initiatives?
Our ThinkForest Ask a Scientist webinar on 11 September unpacked some of these key issues, allowing the audience to tap into the expert knowledge of the authors of EFI’s From Science to Policy study on Sustainable finance and forest biodiversity criteria.
Davide Petenella, University of Padova, explained the two major drivers of the development of sustainable investment in the forest sector: on the demand side an informed civil society, and on the supply side the threat of potential loss of reputation by companies. This leads to a push for investments, including biodiversity protection. But investments in all types of forests have unique challenges, compared to other forms of investment, including long-term timeframes and disruptive factors like storms, fires, pests and floods.
Gert-Jan Nabuurs, Wageningen University and Research, explained that as financing sustainable activities has become a priority, particularly within the European Union, initiatives like the EU Taxonomy have aimed to create a common way to classify sustainable economic activities for investors. Investments will have to meet certain requirements and criteria – but those for biodiversity in forest-related activities are not fully defined yet.
Yoan Paillet, INRAE explored the interplay of biodiversity and forest management, and how Closer to Nature Management can promote biodiversity in managed forests by focusing on composition (eg tree species diversity), structure (eg allowing large and monumental trees) genetic diversity and enhancing functional aspects.
These attributes shall then be measured via criteria and indicators – a topic which was explained by Stefanie Linser, BOKU. The study sets out proposals for biodiversity friendly indicators, giving monitoring options, and how they are linked and aligned with existing international laws, goals and indicators. For example, vertical biodiversity (ie including the large and monumental trees) can be measured via management plan inventories and remote sensing.
However, Gert-Jan Nabuurs pointed out that squeezing the variety of management options and indicators into targets, thresholds and monitoring remains a challenge for legal texts. Forests are diverse, and dynamic over time and space, but some flexible thresholds could be set eg for deadwood, soil disturbance, clearcut size. And there are now novel technologies available to help with monitoring, including LIDAR and modelling.
Finally, Sophus zu Ermgassen, University of Oxford, explored the wider world of green finance and financing green. The EU Taxonomy is only one of a big portfolio of initiatives – EU, public, and private - to focus on investment in biodiversity, many of which overlap.
More information
Watch the recording: https://www.youtube.com/watch?v=wHeLm1xhj1Q
Read the report:
Nabuurs, G.J., Begemann, A., Linser, S., Paillet, Y., Pettenella, D., zu Ermgassen, S. 2024. Sustainable finance and forest biodiversity criteria. From Science to Policy 16. European Forest Institute. https://doi.org/10.36333/fs16
