Vian Sharif, head of sustainability at FNZ Group, never imagined her recently completed PhD thesis would have implications for global health. The subject was the trade in endangered animal products such as the scales of pangolins.
But as the world economy trembles under the impact of COVID-19 there is a popular, yet unproven, theory that there is a connection. This belief centres on the trade in pangolin meat and scales being the critical intermediate step for the transmission of the virus from bats to humans.
Pangolins are the most traded illegal mammal in the world with about 100,000 bought and sold annually. This is decimating the global population of the animals, says environmentalist Andrew Mitchell, founder and senior adviser of Global Canopy, an organisation aiming to preserve tropical forests. An unfortunate side effect of China’s growing wealth is the increased demand for exotic animal products, driven not by the poor, but by the rich.
Mitchell told me that in 1970 when he was a young biologist working in an African national park the continent had 70,000 black rhinos. Poaching reduced this figure to 2,410 by 1995, according to the charity, Save the Rhino. The population has now stabilised due to a successful ‘de-horning’ policy totalling 5,495 in 2017. The Sumatran rhino has been less fortunate; only 67 remain.
Rhino populations have been threatened by the demand for their horn and its supposed medicinal properties. The trade in illegal species going into ‘wet markets’ has been exacerbated by higher access to pristine forests, owing to increasing population and funding for unsustainable agricultural practices. EUROPOL, the EU agency for law enforcement co-operation, estimates that the annual value of transnational environmental crime is worth between $70bn and $213bn (€58.3bn-€178.3bn) annually. Mitchell adds that, while it seems unlikely that the SARS-CoV-2 virus, which causes COVID-19, was manipulated by humans to weaponise it, there is good evidence that the virus came from a bat species found in southern China. A key piece of genetic material, relating to the ability of the SARS-CoV-2 spike protein to bind itself to human cells, is present in pangolin viruses but not in bat ones.
“If we don’t change the movement of money. We will continue to finance ourselves into extinction” - Andrew Mitchell
Climate change is now, quite rightly, being taken seriously by governments and investment institutions. But, as the pandemic has so cruelly shown, the focus on climate change does not allow us the luxury of allowing the damage to nature to wait. There is a car crash happening in nature, says Mitchell, and human beings are both the cause and the affected. The natural world is rapidly degrading with a loss of biodiversity and increased trade in illegal wildlife product, which combined produce a potent virus generating laboratory.
COVID-19 is a perfect example of unrecognised biodiversity risk. The net effect has been to entirely disrupt the global economy in every sector faster than climate change and across every aspect of human life.
Yet, points out Mitchell, it could have been fixed years ago when the Severe Acute Respiratory Syndrome (SARS) first appeared. COVID-19 was not the first coronavirus-related illness to have emerging from wildlife nor will it be the last. There have been six coronavirus pandemics already, including SARS and Middle East Respiratory Syndrome (MERS).
But it is not just the illegal trade in wildlife products that is a problem. As he argues, our food system is the biggest known destroyer of nature. The food products that we eat are actually making us ill – type two diabetes is the biggest bed blocker in the UK’s National Health Service and the same in many other countries.
But there is hope. COVID-19 has accelerated the trend for ESG and environment impacts being taken more seriously by investment institutions and individuals. You can only manage what you can measure is an oft-quoted maxim. But today, we have the ability to accurately measure the impact of human activity on the natural world. So the time has come to manage those impacts, if only to control the emergence of future zoonotic diseases.
At the 2019 World Economic Forum Davos meeting, Mitchell asked why is there not the equivalent of the Task Force on Climate-related Financial Disclosures (TCFD) for nature? The answer is that there should be and Mitchell has been instrumental in assembling a group of financial institutions to set up a Task Force on Nature-related Financial Disclosures (TNFD). Its aim is to treat the degradation of nature with the same urgency as climate change.
The TNFD is being catalysed through a partnership between Mitchell’s Global Canopy; the United Nations Development Programme (UNDP); the United Nations Environment Programme Finance Initiative (UNEP FI); and the World Wide Fund for Nature (WWF). AXA and WWF published a report – commissioned by the French government – that called for a TNFD-like mechanism in May 2019. This was followed up by a high-level roundtable held at the January 2020 Davos World Economic Forum.
The first task for the TNFD is an informal working group to plan a two-year programme of work for the Task Force. It will aim to resolve the reporting, metrics, and data needs of financial institutions that will enable them to better understand their environmental risks, dependencies and impacts. Following that, a series of reporting frameworks will be developed and tested prior to before being made available worldwide in 2022.
So what does the TNFD hope to achieve? “My conclusion after 40 years of looking at this, is that it’s all about money – if we don’t change the movement of money. We will continue to finance ourselves into extinction,” says Mitchell. The goal of the TNFD is to change the direction of investment flows to protect rather than destroy nature. Its objectives are to build awareness and capacity to reduce the negative impacts of the financial sector on nature and biodiversity. This requires an increased understanding of the dependencies and impacts that different sectors of the economy have on nature’s ecosystem services.
By accurately measuring impacts on the environment, there is a hope that new nature-positive investment and lending opportunities will emerge. As the TNFD states on its website: “this will be an important and first order step towards achieving an important cluster of the Sustainable Development Goals (SDGs) that are likely to become a future lens, through which the financial sector’s success will be measured”.
COVID-19 has been a destroyer of much that has been good in the world. But its effects have drawn attention to risks that the world needs to manage for the sake of future generations. It is a shame that it required such a calamity for this to be recognised.
Joseph Mariathasan is a contributing editor to IPE and a director of GIST Advisory