You did your PhD in environmental sciences at ETH. Where does your particular interest in biodiversity come from?

Biodiversity is a term that has only recently been widely used. My interest in biodiversity comes mainly from my enthusiasm for nature, which was also fostered by my parents. As a child, I used to browse through animal books and watch documentaries. I was always impressed by the many different species of animals there are to discover. In a way, I still do today: on my social media, I see lots of great pictures of insects, sea creatures, and cute little mammals. I also still learn about new species every day, for example the tree-kangaroo, or I learn new things about species I already know.

What led you to work in a bank and get involved in financial topics?

During my research work at ETH Zurich, we also had to collect study credits (ECTS) in areas outside the subject. I decided to take a course called "Climate Finance", which was offered at the time in the field of resource economics. There I learned how large financial institutions support climate-damaging projects with billions of dollars. At the same time, I was looking for a way to invest my own money without supporting such harmful projects. That was in 2018 and my search was mostly fruitless. That's when I realized that there is a lack of knowledge about sustainability in the financial world. So as an environmental scientist, I can do my part by looking for a job in this field.

Why is biodiversity of any interest to finance at all?

The situation is easily explained, but the solution to it is not simple: Today's economic system, which aims at global growth, only works because we do not consider natural resources in our balance sheet. We don't think about how important ecosystems are and what good they offer us, such as clean water or fresh air. That's why we don't give them a concrete value. Financial institutions need to be aware of the projects they support that affect biodiversity and the risks this poses to other investments. For example, it could happen that the financing of project A affects the success of project B in the long term due to damage to the environment. It is fundamentally important to take a long-term view of the economy and align investments accordingly. This knowledge should be communicated more broadly.

Where do you see the biggest challenges in the interplay between biodiversity and finance?

In the last three years, we have made very great progress in this area. Now it is a matter of linking all these efforts together and translating them into concrete projects.

There is a lack of consistent frameworks and standardized data and metrics. This means that companies are not incorporating biodiversity into planning, operations and reporting. This could be due to a lack of clear rules from the government or a lack of support from industry. Therefore, there are hardly any projects that promote biodiversity and are financially feasible at the same time.

What changes need to be sought in this area and what milestones have already been achieved?

We have reached a major milestone with the Global Biodiversity Framework, which was adopted by all UN member countries in Montreal in December 2022. Goal number 14 of this plan says that biodiversity should be integrated into national legislation and that financial support should be directed towards this plan. Target number 15 says that banks and large companies should disclose what risks and impacts they have on species diversity and vice versa. In the fall of 2023, a framework will be released by the Taskforce on Nature-related Financial Disclosure (TNFD), which is similar in structure to the framework of the existing Taskforce on Climate-related Financial Disclosure (TCFD). Right now, there are ten times more subsidies for biodiversity-damaging activities than biodiversity-enhancing expenditures worldwide. Goal number 18 therefore says that we should stop these subsidies and instead support projects that are good for nature.

What is your personal motivation at work?

For me, it is clearly a matter of bringing more funds into projects and companies that preserve, promote or regenerate biodiversity and nature in general. At the same time, the aim is to reduce or eliminate harmful products and their production. While we often look to governments when it comes to nature issues, it makes sense to invest in companies that are themselves active in this area with their products and services, especially today and in the coming years. Financial institutions such as radicant bank ag can offer products that enable customers to make a contribution.

What advice do you have for people who want to deal with this topic for the first time?

It is important to understand why biodiversity and nature are important to us humans and why we should care about them. Like a portfolio, nature's complex systems only work when they are diversified. In the end, we all need healthy food, fresh air and clean water. To that end, we are happy when our environment looks beautiful, when we are safe from avalanches and floods, and when we are resilient to droughts and storms. Healthy ecosystems allow us to enjoy all of this. Sometimes we feel it directly, for example, as a protective forest over a village or mangroves on a coast. In other places, we notice it less directly, as with the forests in the Amazon or the Congo Basin, which absorb a lot of CO2 and release oxygen, which is then distributed throughout the planet.

So when we "save biodiversity," we're basically ensuring that we ourselves can survive safely as well.

Finally, can you tell us an exciting fact about biodiversity that will surprise us?

We are currently experiencing the sixth great extinction of species. The fifth happened 65 million years ago when a large meteorite hit and the dinosaurs became extinct. The sixth mass extinction is now happening because of us humans: WWF has written a report on this, the Living Planet Report. It says that vertebrate populations worldwide have declined by 69% since 1970, a decline of more than two-thirds. For animals that depend on fresh water, we are talking about a loss of 83%. In addition to man-made pollution and exploitation, and also because of the climate crisis, the loss is mainly because habitats are disappearing. For example, if all people gave up meat and dairy products from cows and sheep, we would only need a quarter of the land currently used for agriculture worldwide. I find that amazing.

That's why we urgently need to change the way we farm, and also adapt our behavior. It is important to consider which companies you want to work for, and whether they are helping or harming biodiversity. So is choosing which bank to have one's money with. Lastly, choosing how to eat offers one of the most direct ways to act in an environmentally friendly way and support biodiversity.

Thank you very much, Dr. Philipp Staudacher!

(Click here for the course Biodiversity and Finance.)