Biodiversity and Nature-related Disclosures

BIODIVERSITY AND NATURE-RELATED DISCLOSURES

4.1 RELEVANCE OF BIODIVERSITY FOR BUSINESS IN THE LATIN AMERICA AND THE CARIBBEAN REGION

A ccording to a UNEP-WEF report from 2022, 12 Latin America is the region with the lowest Nature-based Solution (NbS) project capital expenses in USD/hectare, globally. This means that developed countries with the resources to spend on NbS and biodiversity targets, might instead choose to invest in nature-related projects in lower cost sites such as Latin America, where they get a better bang for their buck. This holds true, says the report, for different categories—i.e., ecosystems—including wetlands, tropical forests, and others. Latin America and the Caribbean (LAC) holds a quarter of the world’s total forest cover, almost half of the tropical forests, and over 25% of mangrove cover. 13 The region also houses roughly half of the world’s terrestrial species. 14 Simply when looking at blue carbon, we find that 11 out of the 25 countries with the largest mangrove restorable area, are in LAC. For instance, Mexico, the country with the second largest restorable mangrove area, at a carbon price of US$60/ tCO2, would have an expected financial return of restoring such coverage of $US1.19 billion (per an Earth Justice 2020 analysis). 15 As such, the region is in a prime position to attract investment for biodiversity conservation and natural capital protection in forms of international climate finance, both private and public, and other bilateral forms of carbon trading and compensation mechanisms. These opportunities will only increase as investors grasp the benefits of integrating NbS approaches to their portfolios, as they add value by increasing resilience to climate change. 16 In that sense, governments and regulators across the region shouldpromote theadoptionof disclosure frameworks such as the TNFD and implement their own regulations, fiscal frameworks — such as green and sustainable taxonomies — and blended finance schemes to unlock the potential of the region through leveraging the private sector and capital markets.

12 UNEP, “The State of Finance for Nature in the G20 report”, (2022), Link: 13 Global Forest Watch, Link.

14 Ardila, A, et.al, “Latin American and Caribbean forests in the 2020s: trends, challenges and opportunities”, IABD (2020), Link. 15 Earth Security, “Financing the Earth’s Assets: The Case for Mangroves as a Nature-based Climate Solution”, 2020, Link. 16 Ibid. February 2023

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