Why are biodiversity and critical ecosystems so important?
Protecting biodiversity, critical ecosystems, and wilderness areas is a worthwhile goal in and of itself. Safeguarding the survival of endangered species and some of the last natural, wild places on the planet for future generations is priceless. In many ways, their well-being reflects the current conditions of our planet. Humanity depends on having a healthy planet – without it, we can’t grow food, breathe clean air, drink clear water, and live healthy lives.
Even one species can have a dramatic impact in helping to re-balance the health of an ecosystem. When gray wolves were reintroduced into Yellowstone National Park in the US, researchers found that the wolves helped stabilized the once languishing ecosystem by thinning out the large elk population, which in turned allowed for over-grazed vegetation to grow back, fostered the growth of bigger trees, attracted more migratory birds and other animals such as beavers. According to the US National Park Service, the re-introduction of gray wolves will likely increase the biodiversity of the park.
As the world struggles to address new global challenges like climate change and zoonotic diseases, however, protecting biodiversity and critical ecosystems becomes even more urgent. Even as climate change threatens biodiversity and critical ecosystems, solving climate change in part relies on ensuring functional ecosystems to effectively absorb carbon and greenhouse gases. For example, tropical rainforests and peatlands are well established as important carbon sinks. However, increasing deforestation not only reduces the capacity of existing carbon sinks in the world, but their disappearance in fact further exacerbates climate change. Studies report that about 17% of the Amazonian rainforest is now gone. Since mass deforestation started, about 46% of trees have been cut down. Wilderness areas are disappearing at an alarming rate. We have lost one-tenth (3.3 million km2) of global wilderness areas over the last two decades, particularly in the Amazon (30%) and Central Africa (14%).
The ocean and coastlines also help regulate and maintain carbon storage and oxygen generation. According to the International Union for Conservation of Nature, coastal ecosystems like mangroves, salt marshes and seagrasses “sequester carbon faster and far more efficiently than terrestrial forests”. The ocean and its coastal ecosystems are already suffering from the effects of climate change such as changes in water temperature, ocean acidification and deoxygenation, not to mention rising sea levels. However, our ability to successfully stop climate change depends on ensuring the health of critical ecosystems on both land and sea.
Furthermore, as the world continues to grapple with the long-lasting effects of COVID-19, it is becoming clear that there are public health consequences for biodiversity loss. Zoonotic diseases have become increasingly more prevalent, coinciding with biodiversity and habitat loss over the past 50 years. In addition to COVID-19, global diseases such as AIDS/HIV, Ebola, SARS, MERS, H1N1, West Nile virus, among others, can all be traced to zoonotic origin. Although the origins of each of these diseases are complex, known drivers of zoonotic diseases include increased human activity in previously remote areas, habitat loss and fragmentation, and in fact, biodiversity loss itself, as reducing the diversity of animal host species increases human risk.
Rapid biodiversity loss does not bode well for ensuring a health food system. According to the 2019 global biodiversity assessment by Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services, “Globally, local varieties and breeds of domesticated plants and animals are disappearing. This loss of diversity, including genetic diversity, poses a serious risk to global food security by undermining the resilience of many agricultural systems to threats such as pests, pathogens and climate change”.
Even more importantly, most of the world’s domestic and wild biodiversity resides in areas traditionally managed, owned, or occupied by indigenous peoples and local communities. It is well established that biodiversity and sustainable land management is more robust in areas with traditional and indigenous communities. Roughly 25% of global land is traditionally used, owned, or managed by indigenous peoples. However, as conflicts caused by unsustainable, extractive activities in remote areas rise, both short-term and long-term risks to biodiversity and local communities increase as well. In many cases, indigenous and traditional communities depend on natural areas to procure materials for housing, as well food, traditional medicines and non-timber forest products for family use and sale. Loss of these areas can have catastrophic impacts on the livelihoods and survival of these communities.
How do banks impact biodiversity and critical ecosystems?
As upstream, enabling actors in project and development financing, banks play an essential role in accelerating, slowing, or preventing key drivers of biodiversity loss, both directly and indirectly. The banking sector’s involvement (or complicity) in ill-conceived infrastructure development, urbanization, energy, agricultural production, and extractive industries are root economic drivers of environmental degradation, habitat loss, and biodiversity loss. Conversely, when banks withhold financing based on environmental, social or biodiversity risks, many harmful projects become unviable.
Although some banks have adopted policies that prohibit financing in well-recognized areas such as World Heritage sites, the international banking sector writ large has yet to fully explore how biodiversity policies can improve the quality of their lending portfolios, while simultaneously avoiding negative health consequences and improving public confidence. Banks play a natural role in “screening out” high risk, low-quality investment proposals, and so developing policies and due diligence practices which prohibit investments in or near sensitive or inherently controversial areas, such as World Heritage sites or land with sacred or archaeological significance, can help banks protect their lending portfolio from financial losses and public backlash.
Historically, banks which lack policies prohibiting financing in or near iconic ecosystems and other sensitive areas have faced significant financial losses, in addition to intense criticism for both perceived and actual involvement in financing environmentally and socially harmful activities in those areas. Financing or investing in projects which are located in iconic areas, such as World Heritage sites or protected biodiversity hotspots, is particularly notorious for high financial and reputational costs to all involved.
For instance, banks who were involved, or perceived to be potentially involved, in financing controversial coal and gas projects in the Great Barrier Reef faced a public relations nightmare in 2015 and 2016 , causing at least nine banks to announce that they would not fund any projects which would degrade the iconic coral reef system. In another example, activists in thirteen countries protested Bank of China for financing a dam which would likely doom the newly discovered Tapanuli orangutan species to extinction.
Banks provide the funds which can enable both good and bad projects. It’s high time they take responsibility for any potential, negative impacts to biodiversity and critical ecosystems.
Case Studies
Banks and financial institutions need to be held accountable for their role in driving biodiversity loss, fragmenting critical ecosystems, negatively impacting indigenous and traditional communities, and harming wilderness areas.
These campaigns from our partners exemplify why we need banks to adopt our proposed No Go areas.