December 12, 2018

12th December 2018

According to the new World Atlas of Desertification published by the European Commission in June 2018, over 75% of the Earth’s land area is already degraded, and over 90% could become degraded by 2050. Land degradation is often a consequence of overgrazing, deforestation and intensive farming practices. Furthermore, land and climate are intimately linked: degraded land retains less carbon, and land use accounts for 25% of greenhouse gas emissions.

To address these challenges, sustainable land management is an effective way to combat climate change. Strategies and techniques such as better water management, agroforestry and crop rotation help meet the needs of populations while respecting natural resources. Sustainable land management increases productivity and biodiversity while at the same time reducing greenhouse gas emissions.

However, deploying such solutions on a large scale requires substantial financial resources that cannot be covered by public resources alone. This led to the idea – which took shape during the UN Climate Summit 2014 in New York – of mobilizing private sector financial resources to finance environmental and sustainable development projects.

Engaging with this approach, BNP Paribas Cardif invested in 2018 in the Land Degradation Neutrality fund (LDN fund), which aims to restore degraded land and support local agricultural communities by promoting ecologically responsible agriculture. Led by the investment management firm Mirova with support from the United Nations, the European Investment Bank and the French Development Agency, this fund seeks to combine financial performance with positive impact on the environment and local economies.

Among the projects expected to be financed through the LDN initiative is a program to develop coffee plantations in Peru, working with local cooperatives of smallholders. This program involves reforestation (including planting a broader mix of timber species), coupled with diversification of revenue sources. The project aims to reforest 90 square kilometres of land, reduce C02 emissions by 1.3 million metric tons, and improve living conditions for 2,400 producers.

By supporting some 15 concrete projects, this fund – created through a public-private partnership – contributes to the Sustainable Development Goals (SDG) adopted by the United Nations in 2015. This initiative aims to create or support 100,000 decent jobs, primarily in rural areas of developing nations (SDG No. 8) and to fight poverty, especially in rural areas (SDG No. 1). These investments also contribute to combating climate change and its impacts (SDG No. 13), by eliminating 35 million metric tones of CO2 emissions through funding reforestation and sustainable land management projects spanning more than 5,000 square kilometres.

This initiative is part of BNP Paribas Cardif’s comprehensive approach to socially responsible investment. The insurer has announced a commitment to doubling its green investments by 2020 and to accelerating socially responsible investments in order to combine financial performance with positive impact on the environment and society.