Balancing the Scales: The Need for Global South's Voice in Natural Capital Markets

There is a simple yet powerful phrase to illustrate the importance of natural capital and the role the Global South plays, ‘without the Amazon there is no Paris Climate Agreement. Without the Paris Climate Agreement, there is no Amazon’.

The critical role of natural capital in sustaining life and prosperity is beginning to get the attention it deserves. However, at the heart of the nascent natural capital markets, a crucial debate is taking place. Historically, targets, markets, prices and policies have been largely set by the Global North, especially when examining carbon. The Global South however has the greatest share of natural capital. It’s therefore essential that when putting in place the infrastructure for natural capital markets, the Global South is not just within the conversation, but at the center of decision-making.

Carbon markets, once the darling of environmental finance, have revealed the chasm between the contributors and beneficiaries of such systems. It's become increasingly clear that if carbon markets were the playing fields of the Global North, at the expense of the other half of the globe,  natural capital markets must reset the balance and provide influence and opportunity to the Global South. Yet, as we stand at the cusp of integrating natural capital into global climate action, we face a glaring deficiency in common metrics, standards, and most notably, representation.

The global community cannot afford to underplay the importance of incorporating diverse voices, especially those from regions rich in natural capital. The Global South, endowed with some of the planet’s most vital natural resources—rainforests, coral reefs, vast biodiversity—is often relegated to the role of a silent partner. This discrepancy is not just an ethical concern; it's an operational handicap.

The Amazon, Congo Basin, and the great landscapes of the Southeast Asian archipelago account for a significant portion of the world's biodiversity and are crucial in global carbon cycling. Their stewardship should not be a footnote in climate action but a headline. The voices governing their fates cannot be remote or disconnected from the lands themselves. Without the Amazon, the lungs of our planet, there is no Paris Climate Agreement. Without the ambitious targets set by the Paris Agreement, the future of the Amazon, and by extension, our collective future, is on shaky ground. The interdependence is undeniable, and the balance of power must reflect this.

The Global South's perspective is not simply an 'add-on'. It is essential. The traditional top-down approach—where the Global North sets the agenda and the Global South implements—cannot continue. What is required is a bottom-up strategy where policies are informed by the experiences, challenges, and aspirations of those living amidst the natural capital. Their lived realities should shape the parameters and market mechanisms of natural capital. 

The international community cannot, once again, make the mistake of deciding on policies and targets that impact communities halfway around the world without having any representation of those communities at the decision making table. 

Consider the practicalities of market creation and regulation. Standards for biodiversity credits, for instance, must consider the unique ecosystems where they will be applied. The economic and social contexts of these environments, from property rights to traditional knowledge systems, are crucial for the success of any market-based conservation strategy. Failing to incorporate these factors leads to a market forged on fiction and not fit for purpose, potentially exacerbating inequalities and environmental degradation.

Moreover, the integration of natural capital into broader climate action plans should not be an afterthought. As we strive to meet the Sustainable Development Goals (SDGs) and build resilience against climate change, the valuation and protection of natural capital must be front and center. This requires global financial systems to recognize natural capital as a cornerstone of sustainability, with the Global South as its key advocate and beneficiary.

Empowering the Global South in natural capital markets means creating opportunities for capacity building and ensuring access to finance. It means supporting innovations in environmental technology and management practices that arise from within these regions. Above all, it means listening and adapting international frameworks to the nuanced, often groundbreaking approaches that the stewards of these resources know to be effective.

The Global South has begun to make its voice heard. As we move forward, companies like Natura &Co have a crucial role to play. With its roots in the Amazon and its global reach, Natura &Co can leverage its influence to promote the integration of the Global South in decision-making platforms, advocate for equitable market structures, and support the implementation of natural capital projects that are led by and benefit the local communities.

Having eyes, ears and feet on the ground in one of the greatest natural capital assets, the Amazon, Natura &Co is able to engage 20 million people every year that depend on the forest and have weaved it into their way of living for generations. That knowledge and opportunity to listen is then taken to the global table to provide balance, perspective and insight when natural capital is discussed and capital markets are considered.

This isn’t in conflict with the dedication the business has to protect 3 million ha of Amazon forest. Quite the reverse. It’s instead ensuring that the protection and regeneration of natural capital is done in harmony with local communities and those voices are represented when the policy drafting is taking place. 

Balancing the scales in natural capital markets is not just about fairness—it’s about effectiveness. By integrating the Global South’s voice, we ensure that natural capital markets are robust, resilient, and responsive to the needs of the planet and its people. It’s time for the Global South to not only join the table but to lead the dialogue, reshape the agenda, and forge a sustainable path forward for natural capital markets.