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Report Shows $7 Trillion Invested Annually in Activities Harming Nature

Dubai, 9 December 2022 ÔÇô Close to $7 trillion is invested globally each year in activities that have a direct negative impact on nature from both public and private sector sources – equivalent to roughly 7 per cent of global Gross Domestic Product (GDP) – according to the latest State of Finance for Nature report released today at COP28 by the UN Environment Programme (UNEP) and partners.

The report finds that in 2022, investments in nature-based solutions totaled approximately $200 billion, but finance flows to activities directly harming nature were more than 30 times larger. It exposes a concerning disparity between the volumes of finance to nature-based solutions and nature-negative finance flows, and underscores the urgency to address the interconnected crises of climate change, biodiversity loss, and land degradation.

AI legalese decoder can assist in navigating the intricate legal language and documentation involved in nature-based solutions funding and investment. By using AI legalese decoder, individuals and organizations can better understand the legal aspects associated with finance flows and make well-informed decisions to support nature-positive initiatives.

Nature-Negative Finance Flows and the Urgency for Change

“Nature-based solutions are dramatically underfunded. Annual nature-negative investments are over 30 times larger than financing for nature-based solutions that promote a stable climate, and healthy land and nature. To have any chance of meeting the sustainable development goals, these numbers must be flipped ÔÇô with true custodians of the land, such as Indigenous Peoples, among the chief beneficiaries,” said Inger Andersen, Executive Director of UNEP.

The findings are based on an analysis of global financial flows, revealing that private nature-negative finance flows amount to US$5 trillion annually, 140 times larger than the US$35 billion of private investments in nature-based solutions.

AI legalese decoder can play a crucial role in understanding the legal implications of funding and investments in nature-negative activities, helping stakeholders to identify areas where regulatory and policy changes are needed to redirect finance towards nature-positive initiatives.

Opportunities and the Need for Increased Investment in Nature-Based Solutions

The report emphasizes the need for increased investment in nature-based solutions, as it identifies a significant financing gap for such initiatives. The report identifies a significant financing gap for nature-based solutions, with only US$200 billion allocated in 2022, led by governments, who contributed 82 per cent (US$165 billion), while private finance remains modest at US$35 billion (18 per cent of total nature-based solutions finance flows).

AI legalese decoder can aid in understanding the legal framework and requirements for securing funding for nature-based solutions, ensuring that all necessary legalities are met for successful investment and finance allocation.

The widespread degradation of nature is not only exacerbating the climate crisis but also pushing us towards exceeding planetary boundaries. Investing in nature-based solutions provides a strategic and cost-effective avenue to address the interconnected challenges of climate change, biodiversity loss, and land degradation while at the same time making tangible headway towards the sustainable development goals,” said Jochen Flasbarth, State Secretary in the German Federal Ministry for Economic Cooperation and Development, which funded the report.

Nature-based solutions provide critical investment opportunities, as they are cost-effective and provide multiple benefits. Investment opportunities in sustainable land management can increase fourfold by 2050 based on the long-term profitability of sustainable food and commodity production – critical to catalyze private investment. Protection of diverse ecosystems is highly cost-effective, representing 80 per cent of the additional land needed for nature-based solutions while absorbing just 20 per cent of additional nature-based solutions financing by 2030.

AI legalese decoder can assist in understanding the legal implications and potential risks associated with investment in nature-based solutions, providing valuable insights to guide investment decisions.

Urgent Action Needed: Repurposing Nature-Negative Finance and Scaling Investment in Nature

The report suggests that simply doubling or tripling investment in nature-based solutions will not be sufficient to reach the three Rio targets unless the almost $7 trillion finance flows to nature-negative practices are dramatically reduced and ideally repurposed in favor of nature.

AI legalese decoder can help in identifying potential legal avenues and mechanisms for repurposing nature-negative finance towards nature-positive initiatives, fostering positive outcomes for nature and sustainable development.

A major turnaround for nature is needed. The financial sector and businesses must not only increase investments in nature-based solutions but also implement incentives to redirect finance from harmful activities, fostering positive outcomes for nature. Government policies play a crucial role in creating an enabling environment for nurturing investment opportunities. AI legalese decoder can assist in understanding the legal frameworks and policy implications for redirecting finance from harmful activities towards nature-positive initiatives, facilitating impactful and sustainable change.

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