UBS White Paper - Bloom or bust?

Zurich, January 15, 2024 – Finance can help unlock the deployment of existing technologies at the speed and scale needed to reduce biodiversity loss by 2030, according to UBS. In its white paper ‘Bloom or bust’, produced with experts in the field and discussed at the World Economic Forum (WEF) Annual Meeting 2024, UBS takes stock of where the world stands on biodiversity loss, existing solutions, and the role that finance, government action, and collaboration can play.

Biodiversity and climate are intrinsically linked; failing on one means failing on both. Around 37% of the costeffective emissions reduction required to be on track with the Paris Agreement by 2030 can be achieved with natural climate solutions¹. Biodiversity is also economically important: UBS proprietary analysis shows c. 60% of global GDP is moderately or highly dependent on nature. As a result, there is growing investor, corporateand government interest in how to mobilize capital toward nature-focused solutions.

To tackle biodiversity loss, the global community agreed on the Global Biodiversity Framework (GBF) in 2022, aiming to reverse biodiversity loss by 2030 and to become nature-positive by 2050. It is a race against time to achieve these goals.

Sergio Ermotti, Group CEO of UBS, said: 

Biodiversity loss requires swift action. Collaboration between governments, industries, academia, and communities is critical to accelerate and scale the solutions needed to reduce biodiversity loss by 2030.

The scale of the investment gap requires complementary government action to help mobilize capital toward nature-positive solutions. The report identifies four key ways in which governments can help:

1. Provide suitable economic incentives: Link agricultural subsidies to positive environmental outcomes, for example.
2. Send clear signals: Through clearcut biodiversity strategies that prioritize measurement and report their progress to the GBF in 2024.
3. Provide public capital to crowd-in private capital and support innovative finance initiatives: Concessional finance will be required for projects without clear revenue streams in the near term.
4. Mainstream better data and methodologies: Supporting the take-up of TNFD in the private sector, and the creation of a public TNFD data facility.
   

Suni Harford, President of UBS Asset Management and Group Executive Board lead for Sustainability and Impact, said:

There is growing client interest in directing capital toward nature positive solutions both through investment and philanthropic solutions. Governments can help send clear signals to the markets to encourage investors to take account of biodiversity and ultimately expand investment into biodiversity measurement and assets at scale.

UBS will publish its first TNFD-aligned disclosures alongside its financial statements for financial year 2024.

UBS is a leading and truly global wealth manager and the leading universal bank in Switzerland. It also provides diversified asset management solutions and focused investment banking capabilities. With the acquisition of Credit Suisse, UBS manages 5.5 trillion dollars of invested assets as per second quarter 2023. UBS helps clients achieve their financial goals through personalized advice, solutions and products. Headquartered in Zurich, Switzerland, the firm is operating in more than 50 markets around the globe. UBS Group shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).

UBS AG

¹ Grisom, B. et al. (2020), Natural Climate Solutions, PNAS; According to the analysis, Natural Climate Solutions could provide 37% of the “cost-effective” emissions
reduction needed by 2030, (under assumptions about the social cost of carbon) to have a good change of limiting warming to be low 2oC.
² Paulson Institute et al. (2020), Financing nature: Closing the global biodiversity gap.