Enabling that goal is the objective behind the Business and Biodiversity Assessment report, a first-of-its-kind publication released on February 9 by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), an independent organization created in 2012.

A product of nearly three years’ work by 80 scientists and private-sector experts, the report was endorsed this month by representatives of the more than 150 IPBES member countries at a week-long plenary session in Manchester, United Kingdom. It is intended to serve as a key reference on nature-related risks for business – and how alleviating those risks hinges on policy change by governments.

“From my perspective, it plays a role for nature similar to what the [Intergovernmental Panel on Climate Change] has played for climate change,” says Thomas Walker, special projects lead at the Institute for Sustainable Finance at the Smith School of Business, Queen’s University, in an interview with Corporate Knights. “Canadian business leaders should pay attention because of Canada’s resource-based economy and because nature underpins the productive capacity of said economy.”

Stark warning

The report begins with a stark warning to businesses: they can either lead transformative change or “risk extinction.” The authors cite evidence of significant declines over the last 50 years in many categories of the natural “ecosystems services” on which business and economies depend. This includes things like raw materials from nature, pollination and seed dispersal, air and water quality, soil fertility, and amenities for tourism and recreation. Altogether, they underscore just how much business is at risk from nature’s collapse. The report presents a detailed guidebook of more than 130 actions that companies, along with policymakers and other enabling actors, can take to reverse it.

“What’s really fundamental here is that our experts looked at the methods and approaches that are available to understand what [risk from biodiversity loss] means in an individual business context. How you can, as a business, understand your exposure to that. How you measure your impacts and dependencies and therefore how you can understand your risks,” said Matt Jones, one of three report co-chairs and a senior officer at the UN Environment Programme, at the launch press conference.

The report’s release (for now, just the policy summary, with remaining chapters to follow in a few weeks) was well-timed, coming just one week before governments convened in Rome from February 16 to 19 to begin the first global review of nature action under the Kunming-Montreal Global Biodiversity Framework (GBF) since it was created in 2022. Mark Carney’s Liberal government is also expected to soon unveil its revised 2030 Nature Strategy, replacing the previous Nature Accountability Bill that failed to pass before the last election. The new strategy will spell out how Canada intends to meet its commitments under the GBF to halt and reverse biodiversity loss and protect 30% of lands and waters by 2030.

In an email to Corporate Knights, Samantha Bayard, a spokesperson for Environment and Climate Change Canada, emphasized the role of nature disclosure in addressing the role of business in biodiversity loss. “While adoption of nature-related disclosures is still at an early stage in Canada – hindered by, for example, capacity, expertise, and data limitations – a growing number of companies and municipalities have begun to address nature-related risks in their portfolios and integrate natural assets (e.g., wetlands) into their financial disclosures.”

Delivering transformative change

A core tenet of the GBF is that reversing biodiversity loss requires the “involvement of all society,” including companies. Significantly, among the GBF’s 23 targets is a call for government action to encourage and enable companies to better manage their impacts on nature and more accurately assess – and disclose – their risks and dependencies. Both sides of that equation are squarely addressed in the new IPBES report.

For businesses, it lays out actions at four decision-making levels: corporate, operational, value chain and portfolio. Asked to suggest some critical first steps, report co-chair Ximena Rueda, dean of the School of Management at Universidad de los Andes in Bogotá, Colombia, urged companies to choose their battles. “What is their highest dependency [on nature] or highest impact? Start from that.”

Government’s responsibility

However, the report also makes clear that voluntary efforts alone won’t be enough to deliver the kind of “transformative change that will halt and reverse biodiversity loss,” added co-chair Stephen Polasky, professor of ecological and environmental economics at the University of Minnesota. That will occur only if governments also step in “to change the set of conditions in which businesses operate.”

A key target here are the massive subsidies currently directed toward business activities that drive biodiversity loss. In 2023, according to the report, subsidies of US$2.4 trillion contributed to the estimated US$7.3 trillion in public and private finance flows that had direct negative impacts on nature. In contrast, just US$220 billion in private and public funds were directed to the conservation and restoration of biodiversity. “There is a big role here for governments and the financial system to provide incentives for business to do actions that are beneficial for biodiversity and to take away incentives to business to do actions which are harmful,” Polasky said.

The challenge of subsidy reform

According to the ISF’s Walker, the report’s concern about harmful subsidies “resonates” in Canada. Government fiscal and tax policies designed to encourage resource development and production have often failed to reflect environmental externalities or cumulative ecological impacts, he says.

While reforming subsidies will be “politically complex,” Walker says there is nothing to stop Canadian companies, which have “ample experience with climate disclosure frameworks,” to immediately start considering biodiversity in corporate decisions and disclosures. The disclosure framework established by the Task Force on Nature-Related Financial Disclosures in 2023, which is now being implemented through the work of the International Sustainability Standards Board, provides a blueprint for companies and their boards to follow.

“Structured disclosure can help integrate biodiversity into enterprise raisk management,” Walker explains. “Once nature dependencies are identified and quantified . . . they can be considered alongside climate, market and operational risks.”

Brian Banks is a writer in Cobourg, Ontario, who specializes in environment, business and sustainability.

The post A landmark study on biodiversity loss takes aim at harmful government subsidies appeared first on Corporate Knights.

“We’re doubling” says Vandenhurk, speaking with Corporate Knights. “We’ll double over last year, and then we’re on a path where we can see ourselves doubling again next year.”

Three Farmers has been scaling up business and production since settling into a new facility last year, and in January, the company successfully closed a new round of equity financing. Vandenhurk, who runs Three Farmers with her sister, Elysia, says she’s “raised probably five rounds of capital” since the company launched 16 years ago. Every round has looked different, she says. Yet one thing hasn’t changed: “Raising money is always really hard.”

With continued success, the Three Farmers brand could become a flag-bearer for this country’s pulse-based protein sector. And it’s part of bigger trend: a surge in innovators and entrepreneurs seeking opportunities in Canada’s food-industry value chain, from small-scale farmers to globally minded biotech ingredient makers. And like Vandenhurk, they are also chasing investment capital or project financing, though not always with as much success.

We’re waving the flag about the incredible opportunity in agriculture and food to attract other investors.

– Graeme Millen, vice president of strategic finance and business development at Farm Credit Canada

“Raising capital in the food- and agri-tech sector remains challenging. We hear from many peers that they are facing pushback on valuations and investor hesitancy due to economic uncertainty,” says Quinn Cavanagh, the Halifax-based president and founder of RFINE Biomass Solutions.

RFINE is pilot testing a technology to sustainably upcycle used coffee grounds into flavouring and other food-grade ingredients. “Capital access has not been a hurdle for us,” Cavanagh says, crediting his company’s “diversified” business model and relationship building with stakeholders. “[But] from what we learn in industry discussions, our experience is not typical.”

Converging trends boost domestic food production

The headwinds haven’t slowed the rush of new companies looking for funding. Federal crown corporation Farm Credit Canada has long been one of the country’s largest for-profit lenders to the agriculture and agribusiness sectors. Graeme Millen, FCC’s vice president of strategic finance and business development, says FCC’s tracking of new market entrants in food and agribusiness has shown a 10% to 15% increase in recent years compared to pre-COVID.

“Food supply, access to food, production of food, connection between food as medicine, health, food security: all of these themes are core to the public narrative,” Millen says. “And I think that’s embodying itself in entrepreneurs being increasingly interested in the sector.”

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But over this same span, FCC also recognized that they face a growing struggle to raise funds. “There haven’t been established pools of capital to support entrepreneurs [in this space],” Millen says. Last year, it officially stepped into the breach, launching FCC Capital to provide companies with high-risk debt, equity and strategic value investments while also investing in larger ag-oriented funds. In its first year, it closed nine direct investment deals totalling $170 million, including joining Three Farmers’ latest financing as a strategic partner.

In May, FCC Capital staked out its grand ambitions, announcing a commitment to invest $2 billion by 2030. “We’re making it easier and more compelling for entrepreneurs to participate in this market,” Millen says. “And, really importantly, we’re waving the flag about the incredible opportunity in agriculture and food to attract other investors.”

A real lack of scaling capital

To put $2 billion in new, dedicated funding over five years in perspective, it’s roughly double the amount ($972 million) the entire venture capital industry invested in Canada’s agribusiness sector from 2020 through 2024.

Canada has many obvious strengths competing against other countries in agribusiness and food- and agritech, including geography, research and development, sector expertise and established markets. But the comparative strength of our venture-capital support structure isn’t one of them.

According to a first-ever report on Canada’s food-tech ecosystem, published in February by the Canadian Food Innovation Network (CFIN), based in Guelph, Ontario, venture capital has backed only 40% of food-tech rounds in Canada in the last four years, compared to 60% in the United States and the United Kingdom.

From a financing request standpoint, this is probably the most demand that we’ve seen in the history of the fund.

– Jusin Abbiss, executive director of Fair Finance Fund

Dana McCauley, CEO of CFIN, says a further breakdown of the data reveals a critical weak spot. “The research that we did shows that at the seed and Series A level [financings], we’re pretty competitive and pretty much on par with the U.S. and U.K. But once . . . you need to grow these companies, ag tech and food tech are just like, whoosh, way down against those other countries. So we have a real lack of scaling capital.”

CFIN’s mission is to showcase Canada’s potential as a creator of food-tech solutions and to improve our overall food sector through food-tech adoption. A national industry association, established in 2021, it funds collaborative projects, not companies. Supporting RFINE’s pilot with coffee retailers is one such example. “We fund a project between a technology adopter – a needful party – and the food-tech innovator,” McCauley says. “Those two, they get the first benefit. But the idea is that it will be transferable to other companies.”

Big demand for small-scale producers

Demand for capital isn’t restricted to those aspiring to build national or global competitors, however. Small-scale growers and food producers, many linked to growing interest in locally grown food and food security, are also fuelling the trend. And a mounting number are knocking on Justin Abbiss’s door.

Abbiss is executive director of Fair Finance Fund, an Ontario-based, non-profit social finance lender that supports small-scale producers who also have environmental and social initiatives built into their business plans. Much of its capital is raised through the sale of community bonds. “Big banks will support medium- to large-size operations,” he says. “But it’s really hard for newcomer populations to get financing, and then even harder when it comes to small-scale food producers.”

Since the fund launched in 2019, it has helped more than 70 clients. Approximately half of its portfolio is small-scale farms, including some on urban allotments; the rest is a combination of food producers, wineries, breweries, cafés and coffee roasters. “We have a really strong demand right now,” Abbiss says. “From a financing request standpoint, this is probably the most demand that we’ve seen in the history of the fund.”

According to Abbiss, all levels of government must offer more grant funding and other concessionary capital to meet the growing demand, particularly in light of tensions in Canada’s trade relationship with the United States. “Food entrepreneurs are seeking support for made-in-Canada solutions, to either expand their business to meet customer demands or launch new product lines.”

While shortfalls persist, he says the current trends are encouraging. “I’m optimistic. I’m seeing growing demand for supporting Canadian-grown or -produced food.”

Identifying demand is the easy part. The true test will be matching it with enough capital.

Brian Banks is a writer and editor whose work focuses mainly on science and nature, conservation, climate and sustainability.

The post Canadian food start-ups are surging and funders are racing to keep up appeared first on Corporate Knights.

Protection from extreme heat is not a luxury, United Nations Secretary-General António Guterres told attendees at the COP29 climate conference last week: it is a necessity and a sound investment. In July, Guterres’s office published a call to action on extreme heat, which stated that “the world’s cities are heating up at twice the global average rate due to rapid urbanization and the urban heat island effect.”

Heeding that call to action means cutting carbon emissions, of course. But solutions also lie elsewhere – notably, in better urban design, architecture and planning that mitigates excess heat that’s already a reality and helps reduce heat-related deaths and other detrimental social and economic consequences.

“Cities are where we live, that’s where the heat challenges are,” said Rasmus Astrup, partner and design principal at the Danish landscape architecture firm SLA, one of four expert panellists in a session at last month’s Human/Nature design conference in Toronto called “Forecast for Hotter Cities.”

Astrup is recognized worldwide for climate-adaptive designs rooted in nature. This includes SLA’s work as part of the team that created the framework plan for Toronto’s 520-acre Downsview airport site, the biggest urban redevelopment project in North America. “When we started working on the Downsview airport, we were told that we have to coordinate the whole design so it is fitting with the fact that [Toronto’s climate] would be like Barcelona when the master plan is fully implemented,” Astrup said. “That’s the reality: climate is changing. It’s happening everywhere.”

Astrup’s message, shared by his fellow panellists: “Don’t give up hope. We can do something.” Keeping with that mantra, the group presented an array of innovative ideas, planning policies and design projects from Canada and around the world that cities are now deploying to beat back the heat. Taken together, five key themes emerged.

1. Bring back nature

Data gathered for many years across hundreds of cities show what most urban dwellers know from experience: locations with ample tree cover and vegetation, particularly parks and ravines, are cooler than areas that are mostly pavement and other impervious materials.

Shade is the biggest factor. But trees also cool the environment by emitting water vapour into the air. Bringing back nature also has the collateral benefit of reducing other urban maladies – flooding, noise, air pollution and stress – while also boosting biodiversity.

Applying a “life-centric approach” to projects is another way to incorporate nature into the city fabric, said panellist Dorsa Jalalian, an associate and senior urban designer at the Canadian firm Dialog. It’s a concept that puts nature front and centre, rooted in Indigenous thinking. “If you just design an ecosystem that’s comfortable for all life to thrive, people are probably comfortable there, too,” Jalalian explained.

2. Focus on public health and equity

There’s a second correlation that goes with most of the data linking levels of tree canopy and urban heat: namely, that poorer, marginalized, minority populations typically live and work in the hottest areas. “We know that climate change impacts don’t affect neighbourhoods equally,” Jalalian said. “If you take a [Toronto] surface temperature map and the distribution of tree canopy and overlay that onto the socioeconomic data, you can see that wealthier neighbourhoods have better access to tree canopies and more vulnerable lower-income neighbourhoods have poor access to canopies and shade.”

In 2021, the White House directed the Council on Environmental Quality to develop a Climate and Economic Justice Screening Tool. It identifies communities that are overburdened, underserved and disadvantaged on eight metrics, including climate change. The tool is now used by federal agencies to ensure that those areas receive an outsized share of benefits from investments in climate and clean energy.

What’s ultimately needed is a reframing of the problem, explained panel moderator Fadi Masoud, associate professor of landscape architecture and urbanism at the University of Toronto. “Equitable access to shade and comfortable microclimates are often perceived as an amenity but should instead be considered a public health concern,” he said.

3. Appoint urban heat officers

When it comes to obstacles preventing cities from mounting strong, effective actions to address extreme heat, one of the biggest is a lack of accountability or coordination of efforts across various city departments. A potential solution, according to panellist Owen Gow, deputy director at the Atlantic Council’s Climate Resilience Center in Washington, D.C., is to appoint a chief heat officer.

The idea is to have someone in place who can tackle the issue of extreme heat across the entire city, Gow explained. “Can there be one person who wakes up every day in a city focused entirely on extreme heat; who can go to the health department, the transportation department and start drawing linkages between them?” As the idea catches on, Gow said, chief heat officers also become the face of a city’s response to extreme heat.

To date, Gow said, nearly a dozen municipalities worldwide have appointed chief heat officers. The Climate Resilience Center runs a support network helping the group develop and implement strategies and share ideas. “What’s applicable in Santiago is not applicable often in Freetown or Bangladesh, but there are a lot of commonalities,” he said. The result is an evolving “global playbook” with a set of solutions starting to be deployed around the world.

4. Rethink city streets

If cities are hottest where there’s pavement, then cooling the biggest paved areas – city streets – is low-hanging fruit in the fight against extreme heat. Technical fixes include using lighter-colour or permeable paving that absorbs less heat. But for larger road networks, “green streets” are a proven solution with the potential to be scaled up exponentially.

“Growing Green Streets” is one of the primary heat-mitigation programs now being rolled out by the City of Toronto’s urban design department. Still in the study phase, the initiative is “really about maximizing opportunities for growing the tree canopy across the city,” said Kristina Reinders, urban design program manager. While green street projects often start by simply adding planters and flower beds with enhanced drainage on sidewalks, more ambitious plans include tree plantings, rain gardens and road narrowing.

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A second option, of course, is to get rid of roads and pavement entirely and rethink planning policies to downplay the focus on cars. “What heats up the streets, what heats up the environment we live in? That’s the cars,” Astrup said.

To illustrate, he showed slides of an SLA project in Manchester, England, that’s still in the design phase. It involves removing the road in an inner-city block and restoring a river bed that had been routed into a culvert and paved over. ‘It’s the asphalt,” he said. “Asphalt is ‘ass’ and ‘fault.’ Why does it have to influence 70% of the space where I live? It is super dumb.”

5. Mandate thermal comfort

Along with focusing on city streets and pavement, planners and designers are also embracing a more holistic approach, encompassing site plans and building designs, to improve and set standards for maintaining a certain level of “thermal comfort” in public spaces. It’s a methodology that considers four factors that determine how comfortable people feel in an outdoor setting: air temperature, radiant temperature, wind and humidity. Those variables are then combined to calculate a site’s score on a thermal climate index.

In Toronto, designer Dorsa Jalalian is working with the city on a study that will ultimately establish a Toronto-specific methodology to measure thermal comfort, one that incorporates future climate projections. The final guidelines will be “performance-based and not prescriptive,” Jalalian said. “As long as you achieve the target or you are designing with thermal comfort in mind, you can pick whatever works best for your project.”

Brian Banks is a writer and editor whose work focuses mainly on science and nature, conservation, landscape, climate and sustainability.

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