As G20 nations gather in Brazil, the United Nations Environment Programme Finance Initiative (UNEP FI) has issued a crucial call for the group to empower Small and Medium Enterprises (SMEs) in their journey towards sustainability. Representing 90 percent of global businesses and 50 percent of employment, SMEs play a vital role in the global economy.
UNEPFI highlights the need for G20 countries to support these enterprises in assessing and reporting their environmental impacts, particularly in emerging markets, to foster a nature-positive economy and ensure a just transition.
SMEs often struggle with the resources and knowledge required to address environmental issues effectively. UNEP FI recommends that G20 nations implement simplified and flexible disclosure standards tailored to SMEs' capabilities. By doing so, these smaller businesses can contribute meaningfully to global biodiversity goals while advancing their own sustainability transitions.
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Moreover, the G20 is encouraged to enhance supply chain transparency through comprehensive due diligence laws, requiring companies to trace and mitigate adverse environmental and social impacts.
Key Recommendations for G20 Action
Support for SMEs in Environmental Reporting: SMEs, integral to the global economy, require guidance and support from G20 countries to manage their environmental impacts. UNEP FI advocates for simplified disclosure standards that are compatible with SMEs' abilities, enabling them to play a crucial role in achieving biodiversity objectives. Strengthening supply chain transparency through due diligence laws will further ensure that environmental and social impacts are addressed comprehensively.
Enhanced Transparency in Nature-Related Disclosures: UNEP FI also urges G20 nations to bolster corporate and financial sector transparency in nature-related disclosures. By aligning with the Kunming-Montreal Global Biodiversity Framework (GBF), businesses can better assess and mitigate their impacts on biodiversity, ensuring that economic transitions are both environmentally sustainable and socially just.
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Development of Sustainable Finance Taxonomies: To channel capital towards green and sustainable projects, the G20 is encouraged to integrate nature objectives into sustainable finance taxonomies. Alignment with international frameworks like the Paris Agreement and the GBF will enhance cross-border green finance flows. These taxonomies should also include social safeguards to support a just transition.
Promotion of Nature-Based Solutions (NbS) Markets: UNEP FI highlights the need for the G20 to foster credible investment products for NbS, such as biodiversity credits, to finance conservation and ecosystem restoration. By learning from the carbon markets, the G20 can ensure the integrity and effectiveness of these emerging markets, avoiding risks like low-quality credits and market failures.
Tailoring Regulations to Local Contexts: Recognising the diverse socio-economic and environmental contexts across G20 nations, UNEP FI emphasises the importance of tailored regulatory approaches. Indigenous peoples and local communities should be prioritised in the design and implementation of NbS, ensuring that their rights are respected, their knowledge is integrated, and their participation is meaningful.
The G20’s decisions in Brazil could be a turning point in the global pursuit of sustainability. By adopting UNEP FI’s recommendations, including empowering SMEs, the G20 can lead the world towards a nature-positive economy that is both environmentally sustainable and socially equitable. The time for action is now, with the path forward clear: a just transition those leaves no one behind, fostering a thriving natural world that supports all life.
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