European Commission President Ursula von der Leyen spoke at Davos via videolink, emphasising the need for a global biodiversity agreement. AFP
European Commission President Ursula von der Leyen spoke at Davos via videolink, emphasising the need for a global biodiversity agreement. AFP
European Commission President Ursula von der Leyen spoke at Davos via videolink, emphasising the need for a global biodiversity agreement. AFP
European Commission President Ursula von der Leyen spoke at Davos via videolink, emphasising the need for a global biodiversity agreement. AFP

Davos 2021: Ursula Von der Leyen calls for ‘Paris-style agreement’ on biodiversity


Neil Murphy
  • English
  • Arabic

The world must create a global agreement to protect biodiversity on the same scale as the Paris climate accord, EU Commission President Ursula von der Leyen said on Tuesday.

Addressing the World Economic Forum by video link, Ms von der Leyen said the EU would lobby for such a deal at the COP 15 UN biodiversity summit in Kunming, China, later this year.

"This will have to be like COP 21 was for climate, because we need a Paris-style agreement for biodiversity," she said.

The EU chief said more than half of global gross domestic product is dependent on high-functioning biodiversity and ecosystems – in sectors such as such as food and tourism.

She added that three-quarters of the world's surface has already been altered by climate change.

"If we don't urgently act to protect our nature, the next pandemic will be around the corner," she said, citing an anecdote that suggested deforestation in Africa had displaced bats and contributed to an Ebola virus outbreak.

The loss of these natural habitats is a major driver of climate change, she told the summit, and pledged the EU will meet targets that protect at least 30 per cent of the continent’s land and sea.

“Less wilderness and wildlife, increasing temperature and extreme weather – all these developments are different sides of the same coin. We don't just lose green space or natural habitat, we lose a key ally in our fight against climate change.”

"Europe will soon present a legal framework for the restoration of healthy ecosystems. It is why we will protect at least 30 per cent of land and sea here in Europe. We are ready to broker the same ambition at global level, at the next UN biodiversity summit.”

Ms Von der Leyen also welcomed US President Joe Biden's decision to return to the Paris Climate Agreement after it was abandoned by former president Donald Trump.

The pact, which came into force in 2016, was signed by over 190 signatories in order to limit global warming.

She said that 37 per cent of a €750 billion ($911bn) European recovery plan would be used to fund the continent’s European Green Deal plan that was outlined at Davos last year.

The money would be used in projects such as renovating more than 40 million homes to make them more environmentally friendly, decarbonisation of public transport and funding for major clean energy infrastructure – such as hydrogen valleys, she said.

However, she stressed that public funding would not be enough and that companies that promote sustainable corporate governance would have a “big advantage” in the future.

“We all benefit from nature. And we all benefit from the protection it gives us. So I think we all have to play our role in this game”, she said.

Then and now: Davos in 2020 and 2021

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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