BIOFIN Eurasia Pacific Regional Dialogue Reflections

BIOFIN Eurasia Pacific Dialogue – 10, 12, and 17 November 2020

Highlights of the Dialogue[1]

Theme 1 : How COVID-19 is changing our world: Can nature be the building block of our COVID-response?

The sixth BIOFIN EURASIA Pacific Dialogue kicked off on November 10, 2020 with the introductory theme for Day 1 focusing on biodiversity-based solutions as a COVID-19 response. Onno van den Heuvel, Global BIOFIN Manager, welcomed the participants, acknowledging the great progress in achieving finance results in several countries despite the pandemic.

“Partnerships should be maximized as governments cannot close the financial gap alone,” stated Mr. Robert Juhkam, UNDP Resident Representative of Sri Lanka. He further extolled the BIOFIN Regional Dialogue as a platform which could support strategies towards the achievement of the SDGs.

Randy Durband, CEO of the Global Sustainable Tourism Council, shared several important insights on the impacts of COVID-19 on tourism.  “Travel is going to change and we need to accept that fact and be more realistic”, Mr. Durband claims, yet, “everybody is very anxious to travel and the pressure to travel and pressure from business bleeding for money is high”. Travelers’ appetite for tourism post-COVID-19 will lean more towards remote areas with home-sharing and resort stays, sun and sand, adventure, nature-based, outdoor destinations, and rural tourism. This may, in turn, exert some negative pressures on biodiversity. Emerging trends that relate to post-COVID-19 tourism include illegal wildlife trade, health safety protocols, and fairer policies for deposits and cancellation fees.

Onno van den Heuvel provided an introduction to BIOFIN’s global crowdfunding campaign ‘Keep Conservation Heroes in their Job’  which aims to i) raise funding for people hit hardest by the pandemic; ii) raise awareness about conservation issues; and iii) highlight the importance of conservation communities’ work on the ground. Two countries in the region that began their own crowdfunding campaigns are the Philippines and Thailand. The Philippines focused on an endangered and endemic species locally known as the tamaraw, which is threatened by the loss of jobs of rangers and wardens thus making the species more vulnerable to poaching. Thailand addressed the loss of livelihoods associated with tourism closures in Koh Tao island. The campaign features a cash for work scheme where the currently unused labor is deployed to collect marine debris – a perennial problem in Koh Tao.

The Philippines team comprised of Anabelle Plantilla, Angelique Ogena, Kamille Rosales, Sheena Barrameda and Althea Roa, shared their lessons learned in executing a crowdfunding campaign including specific advise on planning, developing and communicating messages, financial management, and partnerships management. The “Together for Tamaraws” campaign is on an extended phase and to date has already amassed 112% of its target. Thailand communications expert Burin Hemthat shared details of the “Koh Tao together” campaign including the launch, communications platform, ambassadors and their use of social media to promote the campaign. The financial target is around US$ 63,000 and after two weeks, donations from global and national level have started to trickle in. Thailand has secured a sizable financial donation from Krung Thai Bank aside from in-kind technical support through the management of donation platforms.

Kazakhstan is working on influencing and improving ecotourism legislation and introducing a certification system for ecotourism. Ainur Shalakhanova, a member of the BIOFIN Team, says that COVID-19 impact on Kazakhstan’s tourism has been minor although there is an increasing trend in domestic tourism thus highlighting the need for ecotourism guidelines within protected areas. Small businesses particularly welcome the certification scheme; as an incentive, stakeholders expressed a need  for subsidies and grants in addition to a tax break that is being explored. Sri Lanka is likewise working on tourism certification in earnest, originally focusing on hotels and now adding tourism destinations. Upali Rathnayake, shared that the downtime afforded by COVID-19 was seen as an opportunity for the National Sustainable Tourism Certification system to dedicate more time for planning and preparation of the sustainable destinations.

Ann Dumaliang, Trustee of Masungi Georeserve, enabled regional dialogue participants to join a virtual tour of the georeserve, comprising several karst formations. Masungi is considered as an upscale tourism establishment with entrance rates averaging at USD 35 dollars and adhering to strict carrying capacity protocols. An initial investment of about USD 1 million was ploughed into the establishment with total investments recouped after one year. Communication and marketing focused on social media alone. Ann notes that their visitors are “largely young people belonging to the 23 to 37 age bracket. Young people in the Philippines are very much engaged and interested in participating in the conservation advocacy.”

Theme 2 : Can agriculture, climate finance and tourism save biodiversity?

Dr. Vinod Mathur shared India’s lessons on biodiversity finance and mainstreaming. To meet national and global biodiversity financing gap, he stressed the importance of mainstreaming as a potential source for biodiversity finance and fully embedding biodiversity actions within the plans and programs of non-biodiversity agencies. Dr Mathur shared the results of the survey on mainstreaming which was participated in by 22 BIOFIN countries.

Herve Barois, Technical Advisor of BIOFIN, provided a brief overview and shared lessons on identifying and addressing harmful subsidies. Herve also shared some  basic steps to reform environmentally harmful subsidies and mentioned that three BIOFIN countries have started along this process. A poll earlier conducted amongst Regional Dialogue participants showed more than half of the attendees (N=43) perceived that work on addressing biodiversity harmful subsidies is feasible (Chart 1).

Joan Manda shared reflections and ideas on climate finance and how it can save biodiversity. Joan explained the global architecture of climate finance and its complexity and highlighted strong linkages between climate change and biodiversity.  Specific examples on the role of biodiversity in climate change include REDD+ and Nature-Based solutions that play pivotal roles in climate mitigation.

Dr. P Krishnan shared insights into how India is mainstreaming biodiversity conversation in the development schemes of agricultural sector. The study recommends key focus areas for intervention including; organic agriculture, conservation of traditional varieties, community seed banks, integrated pest management, crop wild relatives, natural resource management, agrobiodiversity and climate change.

Chart 2 shows the results of the poll conducted among the Dialogue participants to assess which sectors offer the greatest opportunities for mainstreaming with agriculture ranking first, closely followed by the finance sector.

Theme 3: Can the finance sector be a catalyst in biodiversity financing?

Day 3 of the BIOFIN Regional Dialogue was ushered in by a Board Talk with Mr Payong Srivanich, President and CEO of Krung Thai Bank of Thailand. Among some of the points raised by countries include tips on how to promote CSR for biodiversity in the private sector; support to nature-positive business; aspirational and regulatory functions of the Central Bank;  and the role of FinTech. For an effective CSR engagement, the purpose should be associated with the core business of the firm and must appeal at macro level, i.e., sectoral contribution to GDP.  Lowering interest rates is one way  of supporting the transition to biodiversity-positive enterprises. Central banks can promote sustainable finance by setting the overall tone for the banking sector such as engaging with the global sustainable finance community; assessing whether credit policy is embedded with sustainability principles; or extending soft loans to biodiversity positive investments. Fintech could connect the dots in terms of enabling biodiversity-positive but smaller scale projects which lose out due to logistical and marketing challenges and market information asymmetry.

Ms. Mutumboi Mundia of the Securities and Exchange Commission (SEC) of Zambia presented on the role of capital markets in supporting and filtering biodiversity positive investments. She explained the functions of the SEC as the apex regulator of the Zambian capital markets, executing a dual mandate to promote market development and ensure effective supervision of capital markets. As part of its mandate and in leveraging a consultative process that was coordinated in partnership with BIOFIN Zambia, SEC developed guidelines for green bonds in 2019 and this step has facilitated for issuances of green bonds in the Zambian capital markets. Ms. Mundia emphasized the need for raising awareness about biodiversity and the broader sustainability agenda targeting all, including financial markets practitioners. She submitted that “capital markets, if well-functioning, are well positioned to allocate capital to deserving green projects for as long as the aspirations and objectives of society are well communicated”.  

Bruno Mweemba, BIOFIN lead consultant for Zambia, followed through on the green bond framework for Zambia and pointed out issues such as the current debt stock of Zambia which will dissuade any sovereign issuance. There are ongoing discussions with the Ministry of Finance to let the private sector take the lead; however, incentives such as removal of withholding tax on interest income need to be discussed.

Continuing on the subject of bonds, Mr Bayuni Shantiko, announced the approval of a 2.8 Million USD investment of a parrot conservation center in Maluku, through a sukuk (Islamic bond) facility. Unlike conventional bonds, sukuk is shariah-compliant and thus, does not pay interest. Instead, the modality for earning returns are through profit sharing or through shares in the underlying asset.

Jan Kellett, UNDP Special Advisor on Insurance Risk Financing, presented UNDP’s programs. Human – wildlife conflict is an area where insurance talks are rife. The presentation highlighted the ability of the insurance sector to employ risk modelling technique, pricing, and develop the policy architecture for claims. Another example that hews well to the biodiversity space and the inherent value of natural capital is the development of parametric insurance for coral reefs as applied to Quintana Roo, Mexico. Payments are triggered by extreme events, deposited to a trust fund, and used to fund rehabilitation efforts.

The last presentation was delivered by Sebastian Gärtner, one of the co-founders of Greenstand, an NGO that works in an open space community to provide data that can measure the veracity and impact of reforestation activities – a criteria that will assure finance inflows. Greenstand has developed an App to allow tracking of trees and verify growth and other ecological attributes that can result to a measure of value. This value can then be stored in electronic wallets and ultimately be traded as tokens or be traded in carbon markets.