Business4Land: Land as an Asset Class - Action Dome, UNCCD COP17

With that transition, we are moving to a very important conversation moderated by Sarah Toomey here on and as an asset class.
Sarah, welcome.
Thank you, Charlotte, good morning, everyone.
Good afternoon.
I'm Sarah Toy and I will be your moderator for the next 45 minutes.
This session is actually a simple ask and an urgent question.
What would it take for land to be treated as a genuine asset class? Not just an environmental item, but something investors, companies and governments actively price, manage, and grow.
We will hear from science, community, government, and business on exactly that.
Without further ado, it's my pleasure to welcome His Excellency, Mr.
Buktav Bdbaya, Deputy Minister of Environment and Climate Change of Mongolia, who will set the scene from the host country's own experience.
Your Excellency, welcome.
Thank you.
Once again, good afternoon.
It is a pleasure to join us for this session on land and asset class.
The financing app for the land restoration and drought resiliency is significant.
According to the UNCCD around 355 billion USD is needed annually to meet global land restoration and drought related targets.
However, the current annual investment is approximately 77 billion USD.
Adré this gap, it requires more engagement from the private sector and financial institutions, alongside the public and development finance.
For Mongolia, this is also relevant.
Our rangeland is d and support pastural livelihoods, biodiversity, and drought resilience.
However, many of these benefits are not fully reflected in the investment decisions.
So we need to better measure, demonstrate, and finance the value of sustainable land management and restoration.
This is one of the priorities of Mongolia step action agenda, which we are advancing as a Cop 17 legacy.
The action agenda includes three flagship initiatives, the Rangeland Flagship Initiative, Water and Assment Initiative, and the Nature based solution for the Sustainable Infrastructure Initiative.
Even though they focus on different areas, they are all aimed to develop practical solutions, build partnerships, and attract investment at scale.
The finance is key part of all three initiatives.
Across these initiatives, you're working to develop strong project pipelines that are ready for investment.
In this context, the Business Land Initiative provides an important platform for strengthening private sector engagement and investment in the land restoration.
Closing the financing gap will require more capital, the better ways for businesses to set a targets, report impacts, and managing risks.
We need the innovative financial tools that can reduce the risk of long term restoration investments.
Blended finance, guarantees, insurance, and technical support can help attract more investment.
We also should ensure that investment models reflect local needs and local communities are meaningfully involved and benefit from the sustainable land management.
Throughout the step action agenda and business for land, Mongolia aims to support the development of the scalable investable approach to the land restoration and drought resilience.
I look forward to today's today's discussion and to hear from our partners on how we can further strengthen the investment case for the sustainable land management.
Thank you very much.
Thank you so much, Your Excellency, for grounding this conversation in Mongolia's own experience as host.
To show how that kind of ambition translates into corporate accountability, please welcome onstage, Craig Beatty of the science Based Target Network, who will present the SBT and Land Case Studies for Pakistan and Mongolia.
Welcome.
Thank you.
Hello.
Thank you, Sarah, and thank you to the government of Mongolia and for UN CCD's Business for Land Program.
My name is Craig Beattie.
I work for World Wildlife Fund, and I co lead the Science Based Targets Network and Hub with Conservation International.
Today, I will talk about science based targets as a mechanism for corporate action to align with global goals for nature.
So science based targets themselves support corporate engagement in our global goals for nature across all three RIO conventions.
We look for corporate engagement to support the objectives of all three conventions, and we've heard that today.
We know that land degradation and conversion is the number one driver of terrestrial biodiversity loss.
And that degradation has impacts on livelihoods, it has impacts on people, and it has impacts on countries, but it also has impacts on corporate supply chains and commodity production as well.
So I'm going to talk about science based targets today and to show how they align with specifically land degradation neutrality targets under the UN CCD.
So science based targets themselves turn our global environmental and nature goals into scientifically backed and time bound commitments from companies, and science based targets themselves are not new.
The Science Based Targets Initiative for climate has existed for some time and is among the most successful corporate engagement strategies that we've yet devised.
There are over 13,000 companies globally that have set emissions reductions targets under the Science Based Targets Initiative, and what our mission is in the Science Based Targets Network is to translate the success of science based targets for climate into the realm of land, freshwater, oceans, and the biodiversity that's inherent in those systems.
Do that, we use a contemporary mitigation hierarchy that you see here that very closely mirrors UN CCDs objectives of reducing pressures on land, assessing and restoring land, and removing the impacts of land degradation and conversion from the world.
SBT in itself is an organization that's composed of over 80 partner organizations, including non governmental organizations like WWF and Conservation International, World Resources Institute and the Nature Conservancy, all of whom support the development of land targets, but also includes donors, financial institutions, consultancies, and a large number of partners that stand behind the corporate target setting mechanism for companies to align themselves with global goals for nature.
So I'll speak briefly about the land targets before I talk about two specific case studies of how they align with land degradation neutrality targets for two countries.
For our land targets, we ask companies to commit to no conversion of natural ecosystems, and we hear a lot about restoration during this week.
I used to work on the Bond challenge and on assessing restoration opportunities for many years, and restoration does not mean very much if conversion continues.
And so what we ask companies to do in our no conversion of natural ecosystems targets is to look at the production systems and commodities that they source that have high impacts on land and to eliminate the conversion associated with the production or sourcing of those commodities.
Our second target, which will be launched as part of our second version of SBTN land in October, is the working and regeneration and Restoration target.
And we have spent years developing the science behind how to provide companies with the specific targets that they can set to know what is enough.
And so we hear a lot about companies needing to be in the room to invest in nature, but this cannot be an open ended contribution from companies.
Companies need to know when they've done enough to meet our global goals for nature.
And what this target does is to provide the resources across natural land cover assessment to know how much natural land cover is enough, to know how much a reduction in agricultural footprint or intensity might be required in a place.
And most specifically, we have new targets for companies on soil organic carbon, on soil erosion, and on terrestrial acidification that they can use to set targets specifically in the places where they produce commodities or from where they source them.
And then finally, our landscape entagement target is maybe the most important.
Because it connects the in value chain actions that companies take through the no conversion target or working in commodity production landscapes with the landscapes that are material to them.
Our landscape engagement target asks companies to engage as stakeholders with other stakeholders in meaningful stakeholder initiatives in places that are material to them.
There has to be a place where they have a production system or from which they source and they become an active stakeholder in that landscape.
I'll switch now to two case studies.
The first from Mongolia.
Caring Group, the luxury caring group of brands, was one of the first companies to set both science based targets for land and for freshwater and they selected four landscapes in Mongolia for their landscape engagement target focused on community stewardship and regenerative supply systems.
So what we've done over these case studies is to look both at Mongolia's national land degradation neutrality targets and to align caring group and good growth companies work on those targets with the LDN targets that are set at a national scale.
The importance of this is not only that you can demonstrate that a company is contributing to LDN targets at a national scale, but it includes a monitoring and evaluation mechanism that sits outside of government.
So These companies working on their SBTN targets, we will be working on achieving progress, storing organic carbon, improving regenerative grazing practices, and our hope is that through collaboration with UN CCD's Business for Land program that these can act as reporting mechanisms for countries as they look to report on their LDN targets.
Our second example comes from Pakistan, uh, which looks at collaborative solutions for freshwater resilience.
And this is not yet an SBTN target setting, although there are many companies that have set SBTN targets who source from and operate in Pakistan.
And so the objective here is to look at Pakistan's land degradation neutrality targets, the version 2.0, which they have just completed, and to understand how working in the Indus River Delta landscape within Pakistan from companies that have set SBTN targets can contribute both to the objectives of LDN targets and to monitoring them for a environment ministries and extension services that are tasked with reporting on LDN targets.
What does this mean for you? There are three things that you can carry forward this week.
The first is that SBT is already a mechanism that you can use that provides companies with a credible, flexible, and validated way to act on land that is already mapped to LDN indicators.
Soil organic carbon is included, soil erosion is included, and these are important things both for SBTN as well as for LDN.
We talked we saw earlier today on this stage that there is the request for a bridge between governments and the private sector.
SPTN can play a role as that bridge as companies commit to the global goals for nature under SPTN land, freshwater, and oceans, and it will provide spatially explicit corporate data and can be used as evidence for LDN progress.
And then Finally, it would be fantastic if delegates can use this as a policy signal.
We know that companies respond to policy signals.
We've seen this over and over.
National support for both disclosure and target setting from companies in the places that you represent would be massive in allowing us to be able to accelerate the progress of companies in setting validated science based targets for nature and achieving LDN at the same time.
Again, my name is Craig Beattie from WWF, and I thank you all for your attention today.
Have a great cop, Sarah.
Thank you so much, Craig, for that presentation.
To bring in the Museum and Market Lens, please welcome doctor Amanda Hansen, Senior Manager for Environmental Markets and Policy at Accounting for Nature.
Thank you, Sarah.
I've got good morning here on my paper, but I guess it's good afternoon at this stage.
I wanted to talk about two topics that I think are really relevant for today's session, but also really relevant for COP in general, and that is nature financing and how nature financing relies on us being able to measure nature.
We've heard people speak about bridges and we really need to also build a bridge between conservation and finance if we want to achieve the U turn we so desperately need for land degradation.
So let's start talking about measurement.
There's a persistent myth in the conservation space that nature can't be measured.
Ecosystems are complex, there are a lot of different indicators, and there's a lot of different nuances out there.
Yes, it's true nature is complex, it is hard to measure.
Neither soil, vegetation, ecosystems, or biodiversity behave like a balance sheet.
However, it doesn't mean that it's impossible.
We are measuring nature today.
We can measure nature at scale.
It's critical if we want to create that bridge between finance and conservation.
So why does nature data matter so much? It's because it's not just a nice to have.
It is the essential data that governments and businesses need to be able to make informed investment and policy decisions.
Without credible data, we can't know and we can't communicate if a project, a piece of policy, or an investment decision is actually delivering real outcomes for nature.
Instead, we end up relying on good intentions.
But good intentions and activity metrics are not enough if we want to safeguard that what we're putting in place is delivering real outcomes for nature.
That brings me to my second point, financing.
So we've heard from everyone at this stage today that there is a desperate gap in funding for financing to conservation and restoration and to halt land degradation.
So in order to close that gap, we need to bring conservation and finance into the same room.
And to do that, we need to also make sure that they can speak the same language.
Right now, we don't speak the same language.
Conservation talks in hydrological flows, species list and ecosystem indexes, and business is talking in profit and loss, material risks, and impacts.
Until those two languages meet, capital will continue sitting on the sideline for conservation.
Breaking down that barrier requires quite a simple concept, and that is that we need to dare to quantify nature.
Not just describe it, not just add it as a nice to have and allude to it in a sustainability report.
We need to quantify it in a way that is rigorous enough for a scientist, but also legible enough for an investment committee to make a decision.
Environmental accounts, simple condition metrics, and verified baselines.
These are all things we need to turn nature from a place to an asset that can be invested in.
The asset needs to have a measurable, a measurable trajectory, which can also create a measurable case for investment.
This isn't about reducing nature to an item on a balance sheet.
It's about giving nature the chance it really needs to compete in a very competitive investment and finance market where everything is decided by numbers.
It can be done.
Currently, over 9.5 million hectaas of land is measured in Australia under the accounting for Nature framework.
That means that an area that's close to the size of South Korea or Denmark is currently being measured and we can tell whether land covered by that area is actually improving or if it continues to degrade.
That really shows that measurement is possible.
It is possible at scale, and it's what we desperately need to bridge the gap between financing and conservation.
And so what I want to leave you with today is that we don't need to wait for a perfect system to start doing things.
We can't let the pursuit of perfection get in the way of progress because if we do, we'll still be waiting on the sideline when the land we're trying to protect has become fully degraded.
Thank you so much for having me today, and I hope you have a great rest of the cop.
Thank you so much, Amanda.
For our next segment, we'll have a panel.
I will hand over to our colleagues from the Global Reporting Initiative, who will moderate the conversation grounded in real corporate disclosure case studies.
Icon on stage, Eden, Senior Manager of Sustainability Standards Global Reporting Initiative, Jeffrey, Julie Green of Ola McGe, business Fn Champion, and Jeffrey Heck co chair of the intergovernmental working group on the future strategic framework.
Welcome on stage.
I will give you my mic.
Well, thank you, Sarah and welcome.
We've just heard about corporate target setting, and now we would like to look at another part of that data transparency infrastructure, which is corporate sustainability reporting.
This session asks us to think about land as an asset class, recognizing that healthy, productive, resilient land protect and generate economic value.
It is something that is worth maintaining and investing in.
But good decision about land require good and credible information.
How companies are affecting land? What do they depend on? How are they managing these issues, importantly, how is this information helping making better investment decisions? This is where sustainability corporate reporting comes into play.
So the Global Reporting Initiative, GRI, is the global standards setter for impact reporting.
It helps companies assess and report the impact on the environment, people, the economy.
What are the most widely used reporting standards globally, with companies in over 100 countries and representing 62% of market capitalization.
We work with the business for land to explore how the information that company already generate through their sustainability reporting can support sustainable land management, drought resilience, and land degradation neutrality.
So as part of this work, we developed two case studies from companies on land that depends on land, and that's Omgri from the agricultural sector and Rio Tinto with the O Turgo operations from the mining sector.
Those are published today, so please check out the UNCCD website to access them.
One important finding from this work is that disclosure is not simply about producing a sustainability report.
The reporting process itself, support management, drive action.
It helps company identify their impact, strengthen their internal data system, informed decision making and the disclosure made all that information about impacts on land, on climate, on water, on biodiversity, on communities available to others.
So those case studies show a lot of example of how investors, lenders, civil society, rating agencies are using that information on impact to assess companies' performance.
But the next question is, how can we make that connection to land based investment stronger? How can information about land and land related impact help us decide where to invest and understand the value of that investment? To explore that, I'm joined today by Judy Green, Chief Sustainability Officer at Ola Magri and Jeff Herik.
You are a man of many talents, but today you join us as an independent scientist and expert on land monitoring and investment decision support.
So Julie, let me start right away with you and with a business perspective.
Ola Magri depend directly on productive land, healthy soil, reliable water across complex agricultural value chain.
So from your experience, how does sustainability impact reporting help Ola Magri manage these issues and support business decision making and resilience? Thank you, Ed.
As an agribusiness, last year, we moved 45 million tons of products around the world.
That's rice, cotton, wheat, soy, products that really are critical for food systems as well as other industries.
The resilience of our supply chains depends on the resilience of the land and of the people who farm it.
Um, now, we were already because of this, we were already mapping our supply chains for several years against risks and impact areas like protected areas and forests, biodiversity risk, water stress using tools like Global Forest Watch, IBT, and WRI Aqueduc.
So what the GRI framework did was to help unveil some cases where there would be gaps in perhaps the policies or our data measurements or the way that we were approaching it.
For example, because of GRI reporting, we started mapping our factories.
We process these goods in some 70 factories around the world.
We started mapping our factories beyond the immediate impacts on the immediate surrounding environment.
Looking at where the overlap and the adjaacencies and dependencies might be with key biodiversity areas a little bit further out in a ten kilometer radius, up to a 50 kilometer radius, for example.
Also, coming back to our supply chains, we looked at the GRI indicators and now the evolving SBTN and UNCCD guidance as well related to land degradation neutrality.
This has helped us to rethink, um, the land use and the soil health metrics that we are using and the parameters that we're using to assess and align with these evolving indicators, looking at land cover at soil organic carbon, at land productivity.
This in turn helps us to prioritize to invest in, for example, our regenerative agriculture programs in West Africa or South Asia and also water programs with smallholder farmers in India or Thailand or Vietnam.
So reporting doesn't make our land program, but it helps us to improve our internal discipline and the regularity with which we re evaluate these risks and dependencies.
It also helps us to identify these gaps in policies and measurement, and it also guides us to align and improve the indicators that we use to measure the land context.
Thank you so much, Jilli.
I think those are very good and concrete example of how sustainability reporting can be an input as well to decision making and to adaptive management.
But of course, if we want to mobilize more investment into sustainable land management, we also need to ask what information investors and public decision makers need to decide where investment should go.
Jeff, let me turn to you for that.
You've worked extensively on land monitoring throughout your career, and now you are exploring how land information can support better investment decisions on sustainable land management.
So what information and decision support tools do investors and governments need to identify and prioritize investment and how could corporate impact reporting contribute? Yeah.
Thanks very much.
I think the first thing we need to do, if we're going to view land as an asset, is move beyond talking about investments in sustainable land management and start reinforcing the importance of investing in capital appreciation.
The idea being that if land is an asset, if it's an asset that's appreciating, we should be able to quantify the appreciation in the productive value of that asset.
Whether that productive value is, in fact, from an economic perspective, a social perspective, or an environmental perspective.
Mongolia has one of the few, in fact, I think the only range land monitoring system that actually does this.
Mongolia starts by classifying it land its range lands relative to their productive potential.
The types and amounts of vegetation that can be produced to support livestock, it then has a very simple five class system and they don't call this a degradation class, they call it a recovery class.
The point being that it puts the focus on how can we increase the value of land as a productive asset.
The UNCCD is now working on an investment targeting, toolkit, actually, a broader system that is attempting to bring all of the information together in one place that is required to define the potential return on investment from both a cash flow perspective and capital appreciation.
On the productive economic side and also for each of those potential investments at any scale, from the farm or watershed to the national scale, what those investments would provide in social and environmental value.
If we have that information together in one place, we can now start to have rational conversations about blended finance, about where and when it makes sense for the private sector to invest by themselves, where the public sector needs to step in and where we can bring these together.
Obviously, nearly all the information that we need for the investment decision, we also need to look at impact, which brings us together.
Thank you, Jeff.
I think that he made it really useful to understand how sustainability information help us look at both sides of the investment equation.
The risk to the investment, but also the greater value that investment can generate.
So July, let me get back to you and also to have a bit of discussions about what may be missing from that information chain if we want to have more information and better support land based investment.
What information do you see from your experience investor actually using and asking for, and how does that influence conversation about investments or capital allocation? Yeah, over the past several years, I've had a lot of opportunities to respond to questions from investors and lenders.
There's been only a little evolution, I would say in the past few years.
A few years ago was more focused on forests that's still there.
Now the number one focus has been carbon footprint.
Do you know it? Do you measure it? Are you doing something about it? Um, Secondly, there's a question around traceability and responsible sourcing, so that links a bit back to forest typically.
And then thirdly, there's our understanding of sourcing areas that may have, or factories and mills, for example, that we source from that may have human rights risks.
What I don't see is much focus on actually land, land quality, and land health and This, to me, it's a bit bizarre because it's so important.
When you look at how land underpins agriculture and food systems and many other industries and parts of our economy and also how fast it is degrading.
This is a critical area that I think investors and lenders should be looking at and they should be looking at it not just to avoid the risk and maybe avoid investing in those areas, but seeing how can they proactively invest in the opportunities to restore.
Okay.
Thank you.
I think that's a perfect segue to you, Jeff.
Very briefly.
Do you see or is there an opportunity to provide clear signals about the approaches we want companies to use when making strategic decisions about land use and land based investment? Absolutely.
I think this concept of the toolkit, which will be further developed and discussed at 6:00 P.M.
In an event in MET 2022, soliciting your input into this, I think is, in fact, and you used the word opportunity, an opportunity to come together to build something that will provide everyone the information that they need in order to address the factors that will actually lead us to more investments in land, to more investments in increasing the value of land as an asset.
Great.
Thank you very much.
Maybe in 30 seconds, do you see a role as well for a bit public private collaborations, particularly where these land investment can generate greater value.
Collaboration.
Yeah, collaboration.
Yeah, absolutely.
Every time I've shown this figure to people, they look at it and they say, Oh my gosh, that's just too much.
Or they say, Oh, we're doing that, and then after we talk a little bit more, they realize, no, actually, we're not doing that.
In order to develop something like this, it's going to require tremendous flexibility.
Of different institutions to share their data, to share their knowledge, and to come together to actually build something that will work for everyone.
As you saw in the figure, there are also these two side pieces.
There will be proprietary tools as well, and the hope is that those proprietary tools will in fact be able to interact with this in a relatively seamless way.
New types of collaboration, for new answers.
Perfect.
Thank you very much.
I think what I take from that conversation then is that we already have a lot of information from companies for corporate disclosures.
We also have land monitoring and other tools that helps as well understand values of land based investment, but there's a lot more opportunities to connect the two pieces much better.
As you know that couples to look at mobilizing private investments and public and private partnerships.
I think it's also good to keep in mind that information infrastructure matters too.
We need to think about what information we need, what are the enabling conditions to direct capital towards sustainable land outcomes.
Critically that means that we need to understand both the corporate impacts alongside financial and business risks.
Thank you very much, Judy and Jeff.
Back to you.
Thank you so much, Log, Julie Jeffrey.
This conversation is so actual because our parties are currently discussing all those matters during the negotiations in the contact groups, and by the end of the week, we hope to have new decisions on private sector engagement.
To close this session, I'm very pleased to welcome Kathryn Trebuchet, Director for Nature at Va.
She will be presenting Entreprenese Poland Romo and sharing the experience of more than 40 French companies on land use.
Thank you.
Thank you very much.
Good afternoon, ladies and gentlemen.
It's really a pleasure to be with you today.
To share what we did with all different French companies, what we already did and what we want to do to preserve and to restore ecosystems and especially soil and land.
I am there on behalf of this Association for Environment with more than 60 companies in France and we will publish very soon by the end of September, beginning of October this publication, soil and and in the Changing World.
Why do we see that it's important for us to publish this kind of documentation? It's because businesses, we care about soil, we care about land, because it's a question of continuity of service for us.
It's a question of how our supply chain are resilient or not, how we can still have supplies, even if drowth or water scarcity is there and it's maybe Not a new question for us, but still we need to reinforce our awareness regarding that and to consider soil and land, maybe not as an asset, as we said, but more like living ecosystems that we have to preserve.
So within this publication, you will find more than 40 examples of businesses and how they act to preserve and to go on with restoration of ecosystems and land and soil.
I take only four for today.
One regarding the tire production with the company called Michelin.
And they commit ten years ago to reach zero deforestation and implement some actions in Indonesia, for instance, to work with small farmers to change the practices and to go on with sustainable practices and to preserve soil.
Energy, also power production, hydro power production.
For hydropower production, we need sustainable soil.
We need water in soil to be able to have this continuity of service and there again, to work with farmers to push biodiversity regeneration in agroeconomic systems.
Okay.
And yes, I did not speak about the luxury, but we spoke about that already this morning.
For us, Veolia, as a water waste and energy management company, we try to integrate as best as possible nature based solution within our cycle of water before drinking plant production.
For instance, dipping water plant production by preserving reservoir and by working with a people farmer also and we do also nature based solutions after the wastewater treatment plant, for instance, in Spain with the production of rice.
What I want you to know from us, from the business side as a key key takeaway message is that we need to rethink our land use, the way we use the land.
We have to rethink the way we consider the value chain and the value networks and value chain to be able to better master the supply.
And we need also to reconsider how we share the value also along the value chain.
So that's what you will find in this publication.
And so you have also there the executive summary if you scan this QR code.
Thank you very much on behalf of French Association for Environment.
Thank you so much, Catherine.
This showcase that Business for land is not just an initiative from parties.
It is now adopted by more than 450 companies all over the world in actually 56 countries.
Thank you so much for all for joining this initiative.
This is the end of this segment.
We will now go from land as an asset class to land to de skinny scale, the investment for the land.
Thank you very much and we show now a video actually about inspiring initiative led by the government of Mongolia.
Thank you.