Four days at COP17 left me with three main takeaways. First, businesses have a much clearer set of frameworks for measuring their relationship with nature, although translating exposure into financial consequences still requires better data and scenarios. Second, progress on financing remains constrained by incentives: protecting an ecosystem can create substantial value without offering a sufficient return to whoever pays for it. China’s ecological compensation schemes offer useful lessons here. Third, the agenda needs to become much more focused on specific landscapes, bringing together the businesses, financial institutions, governments and communities that depend on them to fund and deliver protection and restoration.
Before turning to those three takeaways, a few reflections on the broader diplomatic negotiations.
This is an implementation COP, taking stock of progress against the Global Biodiversity Framework. In the conversations I followed, resource mobilisation remained the central sticking point as countries disagree over who contributes, how much, and through which institutions.
Developing countries want more funding to conserve ecosystems whose benefits extend far beyond their borders. Disagreements over who should contribute, including whether to broaden the contributor base, and how funding should be channelled remain difficult to resolve. These questions matter, but the negotiations can feel very removed from the places that need investment.
I find the Cali Fund a particularly frustrating exercise. Its own COP17 update reported contributions of just $6,000 from two companies as of October. That is an extraordinary mismatch between diplomatic effort and financial flows. I struggle to see how voluntary contributions will deliver the scale envisaged without much stronger incentives to participate.
I am much more excited about the focus on harmful subsidies which, if addressed, could help deliver systemic change. But it is politically so hard. Fertiliser and fuel prices affect livelihoods, food prices and elections. Environment ministries are far too weak to resolve those trade-offs alone.
My view is that the longer-term agenda must extend to charging for damage to nature, alongside payments for maintaining the ecosystem services society needs. Pollution, resource depletion and habitat destruction need to carry more of their real costs. Protecting water supplies, maintaining habitats and restoring soils need reliable sources of income. Putting these incentives in place would help translate international commitments into changes in behaviour and investment on the ground.
On the business side, the measurement architecture is becoming clearer. TNFD’s LEAP v2.0 strengthens guidance on assessment and financial risk. The Nature Positive Initiative has established four common indicators of the state of nature, while SBTN’s updated methods offer more practical routes towards action.
Together, these give companies a more coherent way to assess their relationship with nature, set targets and measure progress. There are still technical gaps, but businesses have enough structure to get started.
A recurring discussion at COP17 was that some assessments find less financial materiality than expected. We should be honest about that. Nature will not be the largest financial risk for every company. But the scope of an assessment matters enormously. Looking only at owned facilities can miss critical dependencies across supply chains, while a diversified portfolio can conceal serious exposure within particular companies or regions. Short planning horizons can also miss deterioration that becomes consequential over the life of an asset.
Identifying exposure is only the first step. To influence decisions, analysis needs to show how nature-related changes could affect a company's costs, revenues and operating profit, and what different responses might achieve. That means looking across operations and supply chains, accounting for management practices, using data at the relevant local scale and being transparent about uncertainty. How might declining water availability affect the supply and price of a critical ingredient? Would changing suppliers or restoring the catchment make more commercial sense?
Scenarios remain another major gap. At COP17, the term was used to describe everything from global biodiversity futures to national economic shocks and changes affecting individual suppliers. Connecting those levels is difficult, and there is not yet a sufficiently established common approach for translating future changes in nature into financial consequences for businesses. Without credible scenarios, companies and financial institutions will struggle to assess how today's exposure might translate into future losses, or the value of taking preventative action. Natcap is helping convene service providers to clarify what is needed and identify an institution capable of advancing the work.
Even with better analysis, however, protecting the ecosystems a company depends on may not make commercial sense for it individually. The benefits are often shared, while the costs fall on whoever makes the investment.
China offers one example of how governments can begin to address this problem. Take the agreement between Henan and Shandong on the Yellow River. Under their 2021 arrangement, downstream Shandong paid upstream Henan when water quality improved; payments could run in the opposite direction when it deteriorated. Part of the formula attached a ¥1 million payment (approximately £112,000) to each percentage-point improvement in specified pollution indicators, subject to a cap. Two provincial governments put a financial value on the quality of the river connecting them.
China’s ecological protection compensation regulations, effective from June 2024, provide a national framework covering fiscal transfers, agreements between regions and market mechanisms. The principle is worth paying attention to: those benefiting from ecological protection help pay those providing it.
Putting payments in place does not guarantee ecological outcomes. Measurement, enforcement and the distribution of benefits still matter. But China's approach offers a useful challenge to the European corporate nature agenda: we have invested considerable effort in measuring and disclosing nature-related risks. We now need to put comparable effort into creating financial incentives to address them.
Ultimately, I think we need to organise more of the nature agenda around specific landscapes. A business may recognise that a sourcing region is deteriorating, but find it cheaper to switch suppliers than invest in restoring it. Yet if every business takes that approach, the underlying problem remains unresolved.
A river basin, for example, connects farmers, factories, households, banks and local governments, all of whom depend on its health. By understanding their shared dependencies and the economic benefits of protecting the river, we can begin to identify investments that make sense collectively, even where they wouldn't for any single organisation. The challenge is then to agree who pays, who delivers and how progress is measured, with local communities and landholders central to the process. For banks, looking across clients' dependencies could help identify where coordinated investment makes commercial sense.
That is the work I want Natcap to help make possible. COP17 left me more confident that we can identify where action is needed, but more conscious of how much remains to organise it. By the next COP, I want us to be able to point to landscapes where that analysis has helped secure funding, changed practices and delivered measurable recovery.