The recent COP16 exposed funding shortfalls for biodiversity but made progress with the Cali Fund and agreements on fair benefit-sharing for genetic resources.
Hurricanes, droughts, famine, and floods—climate change is reshaping our world, pushing biodiversity to the brink. At COP16, the 16th Conference of the Parties to the Convention on Biological Diversity (CBD), global leaders emphasised conservation, with a special focus on the responsibility of developed nations. But are we addressing the problem or just masking inaction with greenwashing?
Funding falls far short
COP16 highlighted a staggering financial gap in biodiversity conservation. The Kunming-Montreal Global Biodiversity Framework, adopted in 2022, estimated that USD700 billion is needed annually to protect and restore biodiversity. However, developed countries pledged a mere USD20 billion per year by 2025—just 2.8% of the required amount.
Further disappointment came with the grant-based funding commitments. A total of only USD163 million was pledged, far below expectations. By the end of COP16, only 44 out of 196 countries had submitted National Biodiversity Strategies and Action Plans, with 100 countries putting forward targets but without formal action plans.
COP16 vs COP29
Two significant environmental conferences took place in November 2024. COP16 refers to the 16th Conference of the Parties to the Convention on Biological Diversity (CBD) held in Cali, Columbia, from 21 October to 1 November 2024. The summit’s main aim is to conserve biodiversity. This should not be confused with COP29 which focuses on mitigation efforts in the global fight against climate change. COP29, or the 29th Conference of the Parties to the United Nations Framework Convention on Climate Change, took place in Baku, Azerbaijan, from 11 to 22 November.
A step forward: Compensation for genetic data
Despite financial challenges, COP16 achieved a historic agreement on Digital Sequence Information (DSI). This breakthrough establishes a global levy on products developed using genetic data from nature, like vaccines and medicines. The levies will go towards a fund, called the Cali Fund, which aims to support biodiversity conservation, particularly in developing countries.
However, the fund relies on voluntary contributions, raising doubts about its ability to meet ambitious goals. Still, it represents progress in ensuring that countries and indigenous communities benefit from the genetic resources they provide to industries like pharmaceuticals and biotechnology.
South Africa’s commitment at COP16
Since adopting the Kunming-Montreal Global Biodiversity Framework (GBF), which focuses on halting and reversing biodiversity loss, the government has further adopted the White Paper on the Conservation and Sustainable Use of South Africa’s Biological Resources. This has four main goals, namely conservation, sustainable use, access and benefit sharing. South Africa advocates the implementation of the GBF, under the authority of the COP, to ensure the fund is used to finance the gap needed to halt and reverse biodiversity loss. Furthermore, as a mega-diverse country, South Africa places the emphasis on the Digital Sequence Information (DSI) for fair and equitable sharing of benefits for indigenous people and local communities.
The role of indigenous knowledge
Another key outcome of COP16 was a renewed commitment to respect and incorporate Indigenous knowledge into biodiversity conservation. Countries agreed to preserve traditional practices and lifestyles that support ecosystems, acknowledging the critical role indigenous communities play in sustainable development.
Business at a crossroads
Biodiversity loss poses a significant risk to industries that depend on natural ecosystems. The pharmaceutical industry, worth USD1.6 trillion as of May 2024, has long relied on compounds from plants and animals to develop medications. However, benefit-sharing agreements with countries and local communities remain underdeveloped.
Consumers, too, are increasingly demanding sustainable practices, putting additional pressure on companies to address their environmental impact. Ironically, failing to protect biodiversity may ultimately harm businesses that rely on these resources for growth.
What companies can do
COP16 made it clear: businesses have a critical role to play in safeguarding biodiversity. Here’s how they can act:
1 Invest in biodiversity
Companies must allocate budgets to reduce their environmental footprint and support ecosystem restoration.
2 Ensure fair benefit-sharing
Industries that use natural resources, like pharmaceuticals, must establish transparent agreements to compensate countries and communities.
3 Align with international frameworks
Even if CBD commitments are non-binding, adhering to these principles strengthens brand reputation and aligns with consumer expectations.
4 Innovate in sustainability
Embracing circular economies and reducing waste can open new growth opportunities while protecting the planet.
A call to action
While COP16 fell short on funding and enforceable regulations, it spotlighted the urgent need for collective action. Businesses, governments, and communities must rise to the challenge, turning promises into tangible progress. Biodiversity is not just a moral responsibility; it is the foundation of our economy and society. Protecting it is not optional—it is essential.
Did you know?
Rainforests host 80% of terrestrial species, but deforestation continues at an alarming rate of 10 million hectares annually.
Countdown to COP16
Are businesses and government turning the tide on nature loss? Click to see Business for Nature’s progress report card.
Sources
Business for Nature: Countdown to COP16: are businesses and government turning the tide on nature loss?
Convention on Biological Diversity: Biodiversity COP 16: Important Agreements Reached Towards making “Peace with Nature”
UN Sustainable Development Group: COP16:Landmark biodiversity agreements adopted
World Resource Institute: UN Biodiversity talks stalled, but protecting nature cannot wait
Author: Gary Arendse, ESG advisor
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