International biodiversity framework: a new international agreement to protect biodiversity and its implications for the UK Government’s approach to the natural capital economy

On 20 December 2022, at the Conference of the Parties (“COP 15”) of the 1992 Convention on Biological Diversity, an agreement was reached by the almost 200 member states on a new Global Biodiversity Framework (“GBF”).

This document replaces the previous Aichi Biodiversity Targets (1), agreed in 2010. A core theme of the conference was that halting biodiversity declines is critical in terms of responding to the climate emergency.

In this article we will consider those aspects of the GBF which may be relevant to you, the opportunities and challenges these present, and how Freeths LLP’s Natural Capital Legal Team can help with any legal or policy issues which may arise.

What are the key details of the GBF? The GBF has four long-term goals for 2050 which are underpinned by 23 targets. The four long-term goals are:

• Goal A: The integrity, connectivity and resilience of all ecosystems are maintained, enhanced, or restored, substantially increasing the area of natural ecosystems by 2050. Human induced species extinction is to be halted and, by 2050, the extinction rate and risk of all species is to be reduced “tenfold”.
• Goal B: By 2050, biodiversity is to be sustainably used and managed and nature’s contributions to people, including ecosystem functions and services, are valued, maintained and enhanced.
• Goal C: The monetary and non-monetary benefits from the utilisation of genetic resources, and digital sequence information on genetic resources, and of traditional knowledge associated with genetic resources, are to be equitably shared by 2050.
• Goal D: Adequate means of implementation, including the financial resources, capacity-building, technical and scientific cooperation, and access to and transfer of technology are to be secured.

The full list of all 23 of the 2030 Global Targets can be found here (2). Targets of particular importance include:

• 30 by 30 (Targets 2 & 3): Parties must ensure that by 2030, 30% of areas of degraded terrestrial, inland water, and coastal and marine ecosystems are under effective restoration to enhance biodiversity. Furthermore, by 2030, at least 30% of terrestrial, inland water, and of coastal and marine areas, especially areas of particular importance for biodiversity and ecosystem functions and services, are to be effectively conserved and managed. This is already a recognised policy area in the UK. In its March 2022 Nature Recovery Green Paper (3), the UK Government said it was “committed” to protect 30% of land and sea in the UK by 2030.-
• Reducing pollution (Target 7): Parties are required to reduce pollution risks and the negative impact of pollution from all sources by 2030. This includes “…reducing excess nutrients lost to the environment by at least half including through more efficient nutrient cycling and use” and “reducing the overall risk from pesticides and highly hazardous chemicals by at least half.” This target has the potential to affect the ongoing regulation of diffuse pollution within the UK including, for example, the need to ensure “nutrient neutrality” (4) for new development in certain river catchment areas due to diffuse water pollution impacts caused by excess nutrients. It also has the potential to add pressure to resolve the topical issue of private water companies’ regular discharge of raw sewerage through storm overflows.-
• Reducing harmful subsidies (Targets 10 & 18): Target 10 requires parties to manage agriculture, aquaculture, fisheries and forestry sustainably and Target 18 requires parties to identify by 2025 and then “eliminate, phase out or reform incentives, including subsidies harmful for biodiversity, in a proportionate, just, fair, effective and equitable way, while substantially and progressively reducing them by at least $500 billion per year by 2030”. This target may have implications for the reform of agricultural subsidies in the UK following Brexit.-
• Corporate reporting on risks, dependencies and impacts on biodiversity (Target 15): Target 15 requires parties to take “legal, administrative or policy measures to encourage and enable business, and, in particular, large and transnational companies and financial institutions” to regularly monitor, assess and transparently disclose their risks, dependencies and impacts on biodiversity; provide information to consumers to promote sustainable consumption; and to report on compliance with various matters relating to the impacts on biodiversity and sustainable patterns of production. Whilst this target is not framed in a way that makes such disclosure mandatory, it is nevertheless likely that these measures will feed into the corporate “E” monitoring and reporting aspect of “ESG” in the future. This is also complementary with recent movements in the EU to require further corporate reporting on environmental factors, including on biodiversity and ecosystems. Under the EU Directive on Corporate Sustainability Reporting (2022/2464) (“CSRD”)(5), which came into force on 5 January 2023, the requirements of the previous EU Non-Financial Reporting Directive (2014/95/EU) will be expanded in relation to the social and environmental information that companies will have to report. These obligations will affect a broader set of larger companies, as well as listed SMEs, which will now be required to report on sustainability (including biodiversity and ecosystems). Companies subject to the CSRD, which includes some non-EU based companies trading within the EU, will be required to report according to European Sustainability Reporting Standards (the first set of which are expected to be adopted under the CSRD by the European Commission by mid-2023). Further details on the CSRD can be accessed via the following press release (6).-
• Financial resources for biodiversity (Target 19): Encourages parties to “substantially and progressively increase” the level of financial resources, especially from the private sector, to implement national biodiversity strategies and action plans. This is to be achieved by leveraging private finance, promoting blended finance (comprised of public and private sector investment) and implementing strategies to raise resources and energise the private sector to invest in biodiversity. Parties are called on to stimulate innovative schemes to provide financial support for payment for ecosystem services, green bonds and biodiversity offsets/credits. This will particularly be the case for projects aimed at reversing biodiversity declines as well as tackling the climate crisis. Mandatory delivery of Biodiversity Net Gain (7) from developments on land from November 2023 in England is an example of private sector funding being relied upon to help deliver nature recovery at a landscape scale. Developed countries are called upon to contribute “at least $ 20 billion per year by 2025, and to at least $ 30 billion per year by 2030” in terms of biodiversity related financial resources. A Special Trust Fund will support the implementation of the GBF (referred to as the GBF Fund).

Section J of the GBF stipulates the need for national biodiversity strategies and action plans to be revised or updated in line with the GBF and for national targets communicated in a standardised format. While this does not oblige parties to set specific national targets, it may, for example, feed into Defra’s approach to its Environmental Targets (8) required under the Environment Act 2021.

 What does the GBF mean for the future of biodiversity protection?

Although the GBF has been hailed as the “Paris Agreement for nature” (9), substantial concerns remain about the weak wording of the targets and that they are not legally binding. It is also an alarming precedent that none of the Aichi Biodiversity Targets (10) agreed in 2010 have been fully met.The key difference with the GBF ought to be that by establishing funds for the delivery of targets as well as stimulating private finance investment in conserving and enhancing habitats and species, the means will be there to start making a real difference. By linking nature recovery to national and international responses to the climate emergency, there will also likely be more opportunities for funding.

What does the GBF mean for the UK?

The GBF is not legally binding and there are no country specific targets. However, it is likely that the GBF will have the following implications:

• the Government will likely come under pressure to translate the GBF targets into tangible policy, for example around the 30 by 30 targets or the elimination of harmful subsidies;
• the GBF is likely to lead to further initiatives involving blended and private investment in biodiversity schemes; and
• the inclusion in the GBF targets for greater levels of corporate monitoring and reporting on biodiversity impacts is likely to drive the trend towards the more active regulation by Government of the “E” aspect of “ESG” for companies (for example before it offers contracts) and customers may take more interest in the ecological sustainability of corporate supply chains. This is particularly likely in view of the parallel emergence of similar stronger legal requirements within the EU under the CSRD to report on corporate sustainability, including in relation to environmental factors such as biodiversity and ecosystems.

With regards higher levels of investment in biodiversity, the Government has already said in its March 2020 Nature Recovery Green Paper (11) that it has set itself the target of raising at least £500 million in private finance to support nature’s recovery every year by 2027 in England, rising to more than £1 billion by 2030. It is also “committed to building clear, long-term policy frameworks to help stimulate and guide these investments” and that the legally binding targets for nature under the Environment Act 2021 will “provide the clear signals that investors need to help mobilise capital at scale”. The GBF targets may further help mobilise capital at scale. 

How can Freeths Natural Capital Legal Team help you?

Freeths LLP is a leading law firm in provision of legal advice for Natural Capital projects. Freeths LLP’s team can assist you with the following:

• Entrepreneurial companies and landowners creating and delivering nutrient credits and biodiversity units: Freeths LLP can assist you with all aspects of the legal work associated with the creation of habitat schemes, either to conserve and enhance biodiversity or to reduce the impacts of development associated with pollution. For example, Freeths’ Natural Capital team can advise entrepreneurial companies and landowners on:
  • on how to create nutrient credits and biodiversity units to sell to developers, including advice on the future use of conservation covenants;
  • the appropriate land acquisition strategies and vehicles for entrepreneurial companies or organisations looking to create habitat banks from which credits and units are derived; and
  • the corporate structuring and finance leveraging for new emerging companies in the natural capital arena.-
• Biodiversity Net Gain units and Nitrate / phosphate credits needed by developers: Freeths LLP can work with you to draft and / or negotiate the legal agreements to purchase of Biodiversity Net Gain units or nitrate / phosphate credits. This includes carrying out the due diligence on the s106 (and other) agreements underpinning these schemes to ensure that the units or credits, once purchased, would be acceptable to Natural England.-
• Ensuring that habitat creation or payment for ecosystem services schemes conform with existing regulatory requirements: Freeths’ Natural Capital team can advise on the regulatory constraints associated with the creation of habitats or the financial support for payment for ecosystem services schemes. This includes, for example, the potential impacts on statutory protected sites and species of these schemes. It is vital if these schemes are to be viable and sustainable that they do conform with the requirements of the Conservation of Habitats and Species Regulations 2017, and similar regimes.-
• Advice on the ESG implications of biodiversity schemes: Freeths LLP can also assist you with legal queries associated with the “E” monitoring and reporting duties of corporate ESG strategies. It can do this, for example, by helping you negotiate for more sustainable and ecologically sensitive supply chains.

Please speak to Penny Simpson or Richard Broadbent of the Natural Capital Legal Team for any further information.

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(1) https://www.cbd.int/sp/targets/ 

(2) https://www.cbd.int/article/cop15-cbd-press-release-final-19dec2022

(3) https://consult.defra.gov.uk/nature-recovery-green-paper/nature-recovery-green-paper/

 (4) https://www.gov.uk/government/news/government-sets-out-plan-to-reduce-water-pollution#full-publication-update-history

(5) https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en

(6) https://www.consilium.europa.eu/en/press/press-releases/2022/11/28/council-gives-final-green-light-to-corporate-sustainability-reporting-directive/ 

(7) https://www.local.gov.uk/pas/topics/environment/biodiversity-net-gain-local-authorities

(8)https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1125278/.pdf

(9) https://www.ft.com/content/5edf7c0b-f399-4d85-8c89-324e8caae2a0

(10) https://www.cbd.int/sp/targets/

(11) https://consult.defra.gov.uk/nature-recovery-green-paper/nature-recovery-green-paper/