 Gwneud yw'r ydydd ymlaen, ond ddod ddim yn fwy o'r llogol yng Nghymru. Yn y ysgrifennu Gweithio Iysgrifennu, ac yn ymgyrch i'r cwylwch, ddod i'r hynny, ac rwy'n gwneud o'r ddod o'r rhan o'r perspectifau. Yn yllysgrifennu'r byd, o'r hynny'n ddigon, oherwydd yna yn gweithio ddigon. Yn ymgyrch ar gyfer y cyfnodd, rwy'n gwneud dyma'r ydyn nhw'r ymgrifennu hynny'n ymddangos o'r ddwylo. If you look at the less tangible things that business consumes, the financial system has been learning to really quantify risk, something that it consumed in the short term but paid for only in the very longer term, maybe over the last 50 years. Today we're going to be talking all about nature and different aspects and different perspectives on that. We will be closed now by the Brazilian Minister of the Environment and Climate Change, Minister Silva, who will join us a little later on after coming from her meetings. To tear us up, GDP has more than doubled in the last three decades, but natural capital has declined nearly 40% in the same time frame. The briefing note starts off by saying, with half the world's economy, I'm going to add, with all the world's population, utterly dependent on nature and its services, what do we need to do to better connect the ecology and economics to make sure that the business systems so finely honed over centuries actually respect this up until now often free resource that is in fact extremely expensive. Can the value of nature be quantified as a measure of economic performance? These are the kind of questions we're going to delve into. I'm asked to remind you that if you are sharing us through social channels, you should use the hashtag weff24, and I'm sure there'll be lots of activity going on there as well. I'm delighted to welcome my panellists. I'm going to open up with Gretchen Daley, who's the co-founder and faculty director of the Stanford Natural Capital Project, deep experience in this space. I am then probably, I think, going to go to Ron, who is the CEO of Indigo Ag and has been over the last four years, I think, an accomplished leadership background in technology and software as a chief executive and advisor. Delighted to be very welcomed also by O'Yonca, who is a long time leader from the Atwa nation of the Ecuadorian Amazon, serving the country's indigenous movement. He is the president of the Amazon sacred headwaters, and Iber Keller, the senior managing partner at Lombard Odea, who is viewing nature as an asset class, an institution that has a chief nature officer and will bring many interesting perspectives from the asset management side of this. So, Gretchen, you've been looking at this topic of valuing natural capital for a long time. Give us a bit of an overview. What are the tools, what are the ways we have to better include nature in our decision making? Thank you. I really appreciate this chance to talk together with a group that obviously cares a lot and who wouldn't be here. To play off of your opening, I'd say first of all, we can think about two tracks that we need to navigate at the same time. One track that I'll focus on initially is just to address the crisis that we're in as quickly as we can and correct a fatal flaw with capitalism that we don't account for the immense and essentially infinite values of nature. Nature is invisible in most decision making and is now coming at a perilous price. There's a second track, which is the much deeper shifts that we need to make in bringing humanity into harmony with the biosphere, and I'm really delighted that we'll also cover that dimension in this discussion. But to get to the first, the crisis, there is a lot of hope actually, and that comes through recognizing that financial systems do offer a chance to begin redressing the problem with nature being invisible and accounting and in so many types of decisions. And just to answer quickly, there's a new metric that's come forth called gross ecosystem product that's supported by a lot of science and data and is becoming actionable now and adopted by a suite of countries at an experimental initial phase. And we can think about gross ecosystem product GEP as somewhat parallel to GDP, gross domestic product. GDP is basically all the goods and services from an economy where GEP is looking at all the goods and services coming from nature to people. It was adopted by the UN, approved the UN Statistical Commission in 2021, and China adopted it officially in 2022-23, and now there are about 15 other countries that are deploying it in an experimental phase to different degrees in spanning different world regions in Europe and Africa across different Asian countries and in Latin America. And this is just to illustrate that we are at a point with the science and data to bring in an understanding of the vital dependence of human activities, especially in the farming sector and other activities on nature and in a meaningful way to account for that in our decision making. I like that idea very much. I do think we have spun ourselves occasionally into a difficult space where we feel there are so many different metrics. I might come back to this topic later on, particularly with respect to guidance for individual businesses, but Ron, it's a perfect time to segue to you then. So, you know, from a business point of view, how are you integrating the valuation of nature into your business model? It's super important that you do recognize it, and we do align with that construct of valuing nature. So for so long we've taken advantage of those natural resources and not put that into our economic equation. So we do look at it, and we include it in the way we look at the markets and how we're going to tie together a number of the players to bring the value chains to life as part of that overall journey. We look at several dimensions there as we look at the incentive alignment up and down the value chain, and we focus primarily at Indigo Ag. We focus on agriculture, so we're in the farmlands, is our primary area of focus, and inside of there we have a very large value chain, a very diverse value chain. And to put all those pieces together, we recognize the need to put the value that we've been getting for free from those natural resources to life. One, people are willing to pay. They're willing to pay for it, but they need to understand where it's flowing, and we want to make sure that the incentives get all the way down to the farmer and make sure that the value is realized at the farm gate and on the farm. That incentive needs to be a durable, independent line item for the farmers to see as they go on that journey. We have to value it also accordingly beyond just what we do with carbon because we've had a lot of conversation about carbon, but from a farmer's perspective it's the carbon, it's the water, it's the soil. We have to put all those together in the economic equation as part of the journey and the economic journey as we bring those pieces together. I look at what President Biden said. He established a $204 per tonne carbon social cost. When you look at that social cost, okay, where's the rest of it? Where's the water cost? Where's the soil? Where are all the other pieces that we have to put together? And then I'm seeing industry very interested in paying for that. We can talk about it as we go along. I'd love to actually just ask a follow up directly on that. One of the things we've seen in our management consulting work at Oliver Wyman is that the longer the supply chain, the harder it is to transmit the desire or the willingness of the consumer to pay a premium down to the person who needs to receive the premium. Correct. How are you handling that in ag? Just came from a meeting just now at 7 this morning talking exactly about how we bring together that whole value chain. We're all in a room together from the CPG representing the consumer all the way through to a number of us on the farmer side of it. And the answer is trust and also then incentive structure and incentive alignment as part of that recognition to bring that whole journey to life. And it can be done. What we've seen practically when we brought the premium to the farm gate, the farmer got 5 to 8% more money on their scope, three emissions measurements when we brought all the value down there. Our view is whoever's doing the work in the ecosystem services that needs to get valued appropriately both in the economic cost but also in the how we fix it as we go forward. Those premiums we're seeing for real happen out there when we ran it all the way through the value chain, you know only about two to 3% got to the farm gate. So if you add value, we have to make sure that you're adding value on that ecosystem service, not taking it as part of the journey. That's going to be the key for success in the long term to realize the economics part of it in the ecological part of what we have to get done. That makes total sense. Indigenous people protect 80% of global biodiversity and these business concepts may also almost feel sacrilegious in some respect. How can the way that businesses think about the value of nature better support the stewardship work that's being undertaken from the communities on the ground? First of all I'd like to, sorry just a second, I'd like to thank the speakers and everybody here with me and I'd like to say that we should speak with love. We should put an end to problems, tensions and if I'm wrong I'd like to apologize because sometimes I get too carried away when I speak about the different peoples in the Amazon and how they are trying to preserve these 35 million hectares and I'd like to speak out of respect. First of all we're all the children of Mother Earth, we're spiritual brothers and sisters. This is why we should speak with connection out of sincerity and creating a trust when we speak about Mother Earth and our ecosystem when larger companies speak about the value for us. This ecosystem is a sacred ecosystem, there's no value to it, it's invaluable. If I were to ask you with a blessing of Mother Earth, if I were to ask you I'd like to buy your mother what would be the price of your mother. For instance there's no price and so I'd like to listen, I'd like you to listen to me with respect as I deal with you. For us the ecosystem is a living being and there's no cost that could be assigned to it and say let's negotiate with this. At that point of view perhaps we should align ourselves and to think how to create a new system in order to preserve that harmony, this well-being for all. This is where I'd like to invite you to because for now there's no price that could be assigned to nature, there's no value, it's invaluable. This is why I'd rather invite you to consider and to think how to align this idea, this concept of an indigenous world of natural beings and how to keep on preserving together and how to make use of that nature out of love and with love just as we take care of Mother Earth and that would be my answer, my response. Thank you. Gretchen, maybe I could call on you because you made the point at the beginning about the sort of two tracks. I think Ayunka's points are extremely important. There are sort of different spheres of nature almost in this topic and I'd love to give you the chance to sort of respond and build on that and integrate that with your earlier idea. Yes, I would say first off the people working in this community really share both perspectives, farmers, let's focus on farmers because that's where we have expertise where so much of the action is in achieving the alignment in perspective. All the farmers I know I've worked with farmers my whole life absolutely love and revere the land and they love community, they love their mother and they see Earth as the mother in different cultures but with that alignment. And the challenge that we all face then is how to enable farming. There's the vast human population and our needs and obviously in all systems historically we have, let me try to, I need to stay on track here, sorry. But I'll just say, okay, there is scope to achieve this alignment. This is our greatest challenge. All of civilization hinges on achieving this alignment and so having these conversations and understanding that in this first phase addressing the emergency. What we're trying to bring in is not the total value of nature. If we can accept that that we are instead trying to send signals that drive the kinds of investments that we need in the most critical areas like in the Amazon. The whole world depends on maintaining the Amazon and if we can start sending those signals we'll begin moving our complex systems in the right direction and over time we'll be able to refine what we're doing. And in support of that the beauty is that a large research community has advanced the science to understand the flow of benefits from nature to people. In the past we really were flying blind. We didn't have a good idea if we needed to protect water quality for drinking, for irrigation, for hydropower, for other uses. Where in a huge landscape where you have a lot of farming and other activity, where do you protect? How much do we protect in our world today broadly? We need to know where and how much to protect. And how to align activities in those areas where you're trying to achieve both protection but also production of food? How do you harmonize that and achieve benefits that are securing nature and livelihoods? And third, how do we track progress? And that's where I'll come back to this GEP concept. It's designed in partnership with indigenous communities. Actually we've been developing the Natural Capital Project, a partnership of about 500 entities, 150 in research and 350 in practice. Then working together we've developed an approach that integrates the science showing how much nature we need for all the streams of benefits, not just water and soil but pollination of coffee, for example pest control provided by bees, birds, bats. All of this system is so complex and we're just beginning to appreciate it in a modern scientific and decision making context. But we can start identifying those places with the science, with the software that makes it accessible and actionable. All the software is now in Spanish and also in Chinese. We're beginning to make it more accessible in many other languages. It's adopted in 185 countries and supported by satellite imagery that lets us really sense the change in conditions and ecosystems around the planet. So this has become quite actionable and in China, in fact the country that's gone farthest, 51% of land is now zoned for regeneration of nature and rural people are being paid about 200 million people. My last illustration being paid to regenerate nature in a way that does align with the view that's represented by indigenous communities worldwide and many other local traditional communities. Thank you very much. I've been told I'm unusual. We have a notion of Oliver Wyman of love and rigor and I'm told that I'm unusual talking about love in the sort of capitalist system in the workplace. Love in the workplace sounds wrong but I think you know what I'm talking about. So I love this entreaty to balance love and rigor in the way that we interact with natural capital. The New Bear Lombard ODA I think has been one of the most advanced investors when it comes to natural capital. You've nominated a chief nature officer. I'd love to get your perspectives on how natural capital and the topics we've been talking about evaluation can improve investment practices, risk management practices and lead to better outcomes. Thank you very much. And obviously wholeheartedly agree with everything that has been said, particularly about the spiritual and connection with these fabulous and unique nature assets. And I think one of the challenge that we have is that we have to realize the source of the problem is you know these nature assets are basically being eroded, destroyed and they're being destroyed due to human activity and due to our economic activity. And then so you know the first I think priority is to stop this destruction and then to basically be able to channel and deploy capital to you know restore them and preserve them. So you know we've taken the view at Lombard ODA that nature is probably going to become a very significant asset class and an asset in which investors financial investors are going to want to invest because they're going to appreciate because the value of these assets is going to is going to evolve positively over time. When we think about how to unlock value into these essential nature assets today you know we think that there are a number of discussions and of course disclosure transparency are really going to be very helpful. But we also need to think about going at the heart of the problem and the heart of the problem is which are the economic systems that are damaging nature assets today. And the good news there there are two good news the first one is that actually the source of the problem is very concentrated 85% of the problem of nature that we you know that we inflict on nature comes from our food systems. And the other really good news is that we know today what is the better way and it's called regenerative food production systems. Now the question is how can we move regenerative farming practices in a way that it create better economics. And of course Indigawag knows a lot about that but the reality is that there are places in the world and there are commodities food commodities where regenerative farming practices already provide better economics. So and when we say it provide better economics it basically improve the quality of the nature assets it's often actually also increases the productivity of the nature assets. It and also it create a climate and nature premium and this is going to be a big topic which is how can we unlock the value of that nature and that climate premium. Now of course the big challenge is as soon as we talk about food systems as you have rightly mentioned early on we talk about very complex value chains. And you know one of the biggest problem is that to move from extracting nature depleting production systems to regenerative one requires investments and required capex. And the problem is that the existing food value chains at large the capital sits downstream and there is very very little capital available upstream. So one of the challenge which of course from a private sector perspective we take at heart is how do we move capital upstream. Another challenge is how do we unlock the value of these climate and nature premium. And another in the third challenge is really you know how do we make sure that at the end consumers aren't necessarily going to pay for it. And the good news with food systems is the value chain is so large. And you know I have to be a little bit careful with what I say but it's it's quite ready and ripe for some element of disruption which is exactly what Tesla did by the way in electrical vehicles. So you know I'm quite positive and you know we indeed believe that this is going to be a very interesting area to deploy capital. And you know we have several examples. Maybe maybe before I come back to you to think about that we'll be having a coffee before the session and you raise the coffee example. I'd love just to give you the chance to expand on that. Coffee is coffee is really interesting because you know you have the nature dimension of coffee and then you have the economics of coffee. The value chain side of coffee. On the nature side basically the coffee that we all drink emits between 15 and 20 tonne of CO2 per tonne of coffee. So we should all know that this is every time we drink coffee we are basically putting CO2 into the atmosphere. The other and one of the reason is because most of the coffee plantation or most of the coffee is produced through monoculture and and and monoculture is also affected by climate change. The quality of these nature assets is deteriorating quite rapidly and coffee plantation as you all know is mostly in global south. And you know that better than I and and these and this is where some of these nature assets these essential nature assets really lie. So there is a you know there is a great nature opportunity around coffee. If we move on to the economics of coffee it's roughly 250 billion market globally. But what is really interesting is that less than 10 percent of this value goes to the growers. So again we have this perfect demonstration of the frankly nonsensical aspect of the value chain. We need to completely sort out the upstream side of coffee the growing in the production of coffee and yet 90 percent or more of the value sits downstream in the value chain. And by the way coffee growers is not is is a you know most of coffee growers live below the poverty line. And it's an incredibly fragmented industry where effectively on average a coffee grower sort of farms on average a little bit more than one hectare. So it's very very it's very tiny. Now the opportunity is to basically bring capital for return in this value chain to basically you know acquire or lease these production these coffee assets these monoculture coffee assets to transform them into regenerative agroforestry model. In doing so we would create effectively a climate and a nature premium which will have a lot of value for these parts of the value chain. That can inset these climate and the nature premium. And you end up with basically coffee plantation that are fully regenerative that are sequestering carbon that are positive for nature that are restoring biodiversity and that basically are creating better value for an asset that has a longer life without actually the consumer paying anymore for its daily coffee. Thank you very much. I'm going to ask Ron for your responses on that theme. We will have time for a couple of questions before I hand over to Mr. So get your thoughts ready. But to build on all three threads. They all tie together nature. Our journey to regenerative agriculture or agriculture itself is really a trip back to the future. Right. We're actually looking historically at how we did all these practices. And we're just bringing them back to life in a more organized and in an organized manner to feed the planet. But that's the key here in building on what they are was saying. He's 100 percent correct in the way to think about the assets and the flow of that farmer's journey. So let's just stay on the farm. Please move to regenerative farming. It's hyper local. Everything happens in that local region from the microbes that sit in the soil. Through to the economics and the advice that happens for that farmer to go on that regenerative journey. And that regenerative journey around the globe is we've studied it and to go out. What we've seen is the whole range is out there. We have people who are already there regenerative farmers. I just was on one farm and they were sharing with me that they've already added a 16th of an inch of new soil with great pride. They took that they gave back to nature what what they had taken their parents and stripped away. It's very exciting to see this transformation begin to happen. That happened over eight years that farmer measured it. So it's very exciting to see those transitions to the other extreme where you have where you have. They're still doing current monocropping as part of their journey which is ripping down the soil. So let's translate that to economics now. What we're seeing from an overall perspective is we're actually seeing premiums get down to the farms. And when we see the premiums getting that five to 10 percent rage at the farm gate what we actually see is the farmers moving towards that. What we need is the length of the contracts to be longer. We need to be able to address the crop rotations that we need to naturally do. And then we want to make sure that the value chain gets paid along the way for which pieces happen at that point of impact. I totally agree with Hubert these things should be viewed as nature credits over time. We've started with carbon credits. We've seen that it should mostly be in the food industry. It'll be about 80 percent scope three insets and the other 20 will be probably in some form of an offset. They're both regenerative practices. That's what matters. The economic system that you referenced Gretchen is at the epicenter of being able to bring that to life. So we measured appropriately and represent value there. Now why is it so important that five to 10 percent premium on the insets. If I take examples that we've done of rice in the U.S. and in India it was less than half a cent per pound at the consumer. We can afford to make this change. It's all here. It's just organizing the systems of incentives to get it as close to the farmer. We're just starting at the top of the supply chain the consumers. We actually have to start down at the farm gate and everything we bear we're saying I'm 100 percent aligned with because that's where it's going to make the difference. And we can create the investments the right way. Those assets will grow and we'll fix the planet. Can I just add one element which is really important. We all really understand the decarbonisation strategy of the big food consumer company goes through insetting. Insetting is basically the only way for them of reducing their SOAP 3 emission. And again going back to what you were saying that's why there is pricing space in the value chain. The trick is a durable incentive system. For me durability is longevity the length of it the measurements that go with it for the sustainable outcomes that need to happen so that we return nature to what she's capable of doing. We only have to add the gas the water and the soil and mother nature knows what she's doing. She'll take care of all the rest. All the ingredients are right there for her to be as successful as she was before we all showed up and taking advantage of her. Thank you very much. Thank you very much. Do we have do we have the minister. OK well that's we'll keep talking. Let me let me turn it over to the audience for any any questions you may have for our panelists. Thank you very much. It's every step of the value chain can get the incentive to incorporate the additional costs and mobilise cafes towards the upstream from the one that pays which is the final consumer. How far we are. And hopefully we may have such a high nature premium that satisfied the leaders of the indigenous communities. Gracias por su. So I suppose we've made the case that it sort of exists so the question will be at scale. Who wants to take that. I mean I have a very simple and perhaps naive view on the coffee value chain. I think they will. I think you know the move towards regenerative coffee will also require some profound change in the value chain because there is simply too many actors that sort of take margins in between for the economics to work. So we're going to see more and market integration to make this work and for the consumer to not be affected. I'll build on what Hubert said. He said it much more directly. We got to get the money as this travels through the system at the farm gate. And I am a big believer in that. That's what Indigo Ag is focused on. Just building on top of your question where the real live examples. So let me share one that we announced at COP 28. We got together as part of Weff and we created something called the First Movers Coalition. We've gotten together a number of the companies together in the industry crossing multiple consumer package good companies trading houses right through the production players and all of us have now committed to go in one motion is in unison to begin to address this problem. And bring the demand signals together to get that down to the meeting to the farmer to the farm gate. The meeting I was at this morning was with that group and we were having that exact conversation. So it is happening. We've committed to move $30 billion of demand over to that space. And then on the fiber side is the fashion pack which is now agreed to pull together. It's over 20 companies on the cotton side to address the thing in the same way. So these things are now starting to happen in the right manner. And I'll just close while we're letting the minister get ready saying that at a higher level if we look across other sectors in beyond those mentioned here in agriculture and globally we see a big movement. There's support from the multilateral development banks to help drive these shifts and help make some of the policy landscape align more with this vision by changing and getting rid of really harmful subsidies. So much of the subsidy system is actually driving the intended consequences of some of the subsidies. But we are seeing major advances and much more attention to this with leaders in for example the development community trying to work more as a system across different banks adopting this natural capital accounting and approaches for planning. And aligning policy and incentives with the vision represented most eloquently and powerfully by indigenous communities. Thank you very much. Before I hand to the minister Ionco I would like to give you the last word of the panel. Given everything you've heard what is your appeal to us how can we make your life easier? Little by little we are aligning our views. This is very interesting. Yesterday I was saying that we still have hope. Hope lives within us in youth, in women, in men, in entrepreneurs. When you talk about bonuses well let me take for example the coffee. For us indigenous peoples all monocrap products at a large scale are negative. Soy for example it's not only about coffee we can talk about soy, palm oil, cocoa and other products that are intensively produced and all of them are negative. First of all excuse me minister for taking your time. But let me tell you something for indigenous cultures the worst thing would be monocraps. The most important thing is to diversify crops. That's the way we've been exploiting our territories. Today there are new products on the global market and one of them comes from the Amazonian forest I'm talking about vanilla. Vanilla that has been used by us indigenous people with a lot of knowledge and following our traditions but we should encourage the global banks to give us access to new possibilities. Because the situation has been so difficult for indigenous peoples that we need solutions who has been providing bonuses in order to support the ecosystem. Nobody has been doing that. I've been working in this environment for 30 years and I have never seen a bonuses to be granted. All of our leaders are working for free. Nobody is making money and we don't have jobs either. Why? Because our mother earth is our main provider. However another system has been created for example an educational system. You need to go to college and this situation is very different from what we know. We do not have to go to cities to receive a certain education so it would be great if banks and people with good heart open this possibility to us so that we can keep preserving our forest but also keep saving the life of the whole mankind. That's what we want. Thank you very much. Thank you very much indeed. I think bang on the time budget it turns to me to welcome Marina Silva, the Minister of Environment and Climate Change of Brazil. More than 40 years of campaigning and policy work and much awarded and recognised for your work. Thank you very much for joining us. Please share your perspectives. Let's give the stage to the Minister. I am honoured to be here and good that I had the chance also to listen to a representative of indigenous communities and those who have learned with their millennial knowledge. A strange moment. But in the second moment, if we perhaps instead of saying the word price, say the word value, create greater comfort. We have a deeper look into it and if we consider the aspect of value instead of price then maybe in the right direction. The idea of value I believe conveys a larger significance than pricing because there are forms that nature provides values which may be currently not reflected in pricing systems. At some point further down the road they might be valued as they might be signified in prices. During the Brazilian presidency of G20, one of the topics that will be prioritised is payment for ecosystem services. The idea of how do we frame it and how do we use this mechanism to contribute to conservation. I have one example for instance. The Amazon basin is through evaporation responsible for 20 million tons of water per day. This is a major significance for our rain patterns and this in turn is directly linked to 75% of the GDP of South America. They are called the flying rivers. If we were to pump this water we would need 50,000 Itaipus which is a big binational electric power plant that involves two countries including my country. Can anyone imagine an investment like this? 50,000 Itaipus pumping water to be able to feed our hydrologic regime? Could someone imagine how much capital would we need investment to provide this service? But nature does this only by using the earth, its nutrients, the forest, the sun and the wind. It is an uncalculable ecosystem service. This is why it is very important this debate on the value of nature. Hannah Arant used to say that we can only forgive those things that we can punish. So maybe a paraphrase in Hannah Arant, maybe we can only put a price on those things that we can produce. Those things where the value of nature is ontologic into itself, maybe we can only see the value. A value which may also have a price above all the price of those who research, the price for those who benefit from these ecosystem services. A price above all the price of those who research, the price for those who benefit from these ecosystem services. And the price of the millennial knowledge of those who have knowledge associated to these resources. Thank you very much for the opportunity for participating in this debate. And I hope that it will be a constant one in this debate as we look into nature. And that this beautiful Indian snow can remain as a cultural ecosystem service. Thank you very much.