Biodiversity was high on the agenda in Mexico when the country hosted the 13th Conference of the Parties (COP) to the Convention on Biological Diversity (CBD) last month. The event did much more than confirm existing commitments for biodiversity preservation and foster some exciting new commitments. The process that preceded CBD COP13 placed biodiversity issues in Mexico at the forefront of concerns for the government, companies, civil society and academia, generating new awareness and interaction between sectors and especially a new level of commitment from the private sector. The internal return on the host country’s investment will largely depend upon the follow up and the extent to which the momentum generated can be capitalized for biodiversity preservation to be sustainably mainstreamed in Mexico.
We already have tangible proof of this increased awareness and willingness to interact between sectors. For example, during the launch of the Mexican Partnership for Business and Biodiversity (AMEBIN) in October 2016, Mexican companies committed to preserving biodiversity as part of their business operations, in collaboration with civil society and international cooperation organizations. Private sector representatives at the launch event openly commented on how they now “get” how biodiversity is relevant for their business. One even (anonymously) commented how they had previously seen biodiversity as the cherry on the cake, but now realize that biodiversity is actually the cake itself. In the NGO and academic communities, we’ve known for some time that investing in biodiversity can provide a solid and measurable return on investment for companies, and the increased focus on biodiversity through COP13 preparation has allowed the private sector in Mexico to also see this.
This growing awareness among the business community is backed up by official figures; according to the Mexican National Institute of Statistics and Geography (INEGI), environmental degradation and depletion in Mexico cost the country 5.3 percent of its gross domestic product in 2014, or 911 billion Mexican pesos (US$56 billion at the time). As a founding member of AMEBIN, The Nature Conservancy (TNC) will aim to provide tools to allow Mexican companies to follow up on their commitments and reduce their business risks by reducing the negative externalities of their activities on the environment, through tangible, long-lasting projects that make business sense. This is exactly what TNC does around the world, and we will bring this experience to bear with the Mexican private sector.
Since the business community has bought into the concept and the United Nations realizes the importance of this approach, we were asked to participate in a side event during COP13 in Cancun to present an example of how we go about making the business case for biodiversity preservation. Hosted by the European Commission, the side event on innovative mechanisms for financing biodiversity conservation provided a platform for the Conservancy’s Water Funds work in Mexico to be showcased and discussed alongside other financial schemes from international and civil society organizations focusing on Europe, Mexico and China. Water Funds are basically four things: a multi-stakeholder governance scheme; a process for science-based input to support decision making; a process for linking that to a deployment mechanism; and financial tools and schemes that make them sustainable. All of this combines to create an all-encompassing, sustainable tool the aim of which is to achieve water security within the scope of each Fund.
As we’re proving in Mexico, Water Funds are a highly cost-effective investment. Just look at the example of the Monterrey Metropolitan Water Fund (FAMM), set up in direct response to two extreme hydro-meteorological events. During Hurricane Alex in 2010, Monterrey received in just two days the equivalent of one year of its normal rainfall, causing damage estimated at 17 billion Mexican pesos (approximately 1.3 billion USD at the time). A three-year drought (2011-2013) immediately followed this hurricane, the mitigating measures from which had an initial cost of 152 million pesos (10.8 million dollars at the time). The degradation of the upper San Juan watershed that naturally supplies 60 percent of Monterrey’s water resources, from both natural and anthropogenic causes, turned the significant rainfall from Hurricane Alex into a disaster for the city, but also reduced the city’s capacity to absorb that excess water, leaving Monterrey vulnerable to the drought in the coming years. In Monterrey there is a clear business case for conserving biodiversity.
The FAMM’s response to these actions—working on restoring and conserving the upper watershed so as to increase infiltration and reduce runoff during extreme events, while also creating a greater water culture and managing more effectively limited financial resources—will significantly increase the city’s resilience against future events, at a fraction of the cost of inactivity. At the same time, the FAMM has become a key player in the water scene in Monterrey, being entrusted with the preparation of a State Water Plan for Nuevo Leon, integrating both built infrastructure (water retention dams, inter-basin transfers) and its natural counterpart (well-functioning ecosystems with native forests). With more than 60 partners in a multi-stakeholder governance scheme (including rival companies); a science-based planning process defining measurable targets; over 4 million USD already invested in the Water Fund and its activities; and already 4 percent of its overall implementation target met, the FAMM is an attractive business investment for companies based in Monterrey.
With the support of the Latin American Water Funds Partnership (made up of the Inter-American Development Bank, the Global Environment Facility, FEMSA Foundation and TNC), this scheme is being replicated in different localities throughout Mexico and Latin America. Twelve companies have signed up for the AMEBIN and more than 40 companies are already investing in Water Funds in Mexico, but we need more companies with operations based in Mexico to come to the table and reaffirm their commitment to conserving biodiversity by investing in these collaborative schemes. If they continue to do so, the process that was generated by Mexico hosting CBD COP13 will have provided long-lasting, tangible benefits for the host country.
Colin Herron is The Nature Conservancy’s Freshwater Program Director for Mexico and Northern Central America. He oversees a team of seven highly-skilled individuals working in three countries and three strategies: Water Funds, corporate water stewardship and fostering an enabling environment that facilitates water security.