By Robert Nussey, Nature Positive Manager, Ramboll.
As humanity grapples to protect and restore biodiversity, addressing the funding gap is paramount.
The Kunming-Montreal Global Biodiversity Framework (GBF) aims to put us back on track toward a world where nature thrives, ecosystems flourish and people benefit, averting potential annual losses of up to $2.7 trillion by 2030 from environmental loss. But how can we secure the necessary resources to achieve these goals?
The Gap
The Kunming-Montreal GBF, signed at COP15 in 2022, provided a landmark agreement for global action by governments and private organisations. Almost 200 governments signed its four overarching goals for nature recovery by 2050 and the 23 action-oriented targets to halt and reverse biodiversity loss by 2030. However, achieving these ambitious targets requires substantial investment.
The funding gap represents the shortfall between current funding and biodiversity conservation funding needs (i.e. for protected areas, productive landscapes, and urban environments). A 2020 study estimated an average of $711bn per year in additional funding is needed to meet 2030 goals.
While the gap is substantial, it is exacerbated by nature-degrading financing from governments and business, estimated at $7trn annually by a UN report, which concluded that funding for Nature-based Solutions (NbS) needed to almost triple from current levels to $542bn per year by 2030 to meet globally-aligned targets.
Leveraging Public and Private Funding
The 10 Point Plan is a global ‘call to action’, led by the Maldives, UK, Ecuador and Gabon to support the implementation of the GBF and address the $700bn per year nature finance gap. Endorsed by over 40 countries, it incorporates collective action from governments, financial institutions, the private sector, philanthropy, and civil society: targeting a reduction of $500bn of harmful subsidies; mobilising $200bn in public and private finance for nature; and allocating $30bn of international public finance by 2030.
National Biodiversity Finance Plans (NBFPs), alongside National Biodiversity Strategies and Action Plans, are the levers countries use to increase public and private expenditure on biodiversity. 33 countries have completed their NBFPs, while 26 others are evaluating harmful subsidies and creating their plans. A shift from investing in harmful activities to supporting climate and nature-positive actions is needed, with subsidy reform representing the biggest opportunity to close public nature-negative finance.
That said, even if harmful economic activity is greatly reduced, we still need new sources of funding and to redirect existing financial resources. Public finance continues to lead nature investment. Launched in 2023, the GBF Fund aims to scale financing through private, philanthropic and government investments, raising $37.8mn as part of wider package of grants. But concerns remain about its effectiveness in closing the biodiversity financing gap.
Despite nature having a higher impact on economies when comparing risk to GDP, nature finance proportionately receives less funding than climate finance. Annual climate finance flows reached almost $1.3trn in 2021/2022, whereas annual nature finance flows were roughly $200bn in the same period. The emerging voluntary biodiversity credit market, potentially worth $180bn by 2050, may mobilise investment if radical transformation in valuing nature occurs. However, challenges remain around the business case, high-integrity supply, governance and standards.
Maximising Real-World Impact
If policies are to be translated into tangible results, a holistic approach is needed. This intertwines international agreements, collaborative action, funding scale-up, data and local knowledge. Treaties such as the Sustainable Development Goals, Paris Agreement and Convention on Biological Diversity offer a roadmap for collective action to address biodiversity loss, climate change, and societal inequality. Endorsing a unified global goal for nature, like the Nature Positive Initiative, ensures a shared understanding of “nature positive” among businesses, finance and civil society.
Businesses and financial institutions can champion nature-positive policies through collaborative initiatives and forums like the Finance for Biodiversity Foundation, Business For Nature, and Nature Action 100.
The financial sector has rallied behind recommendations to transition from GBF ambition to implementation. This requires businesses and financial institutions to assess, monitor, disclose nature-related risks, impacts, dependencies, and opportunities, and mandates transition plans. There’s also a push to integrate nature-related financial risks into central banks’ mandates and incentivise private finance, including developing sustainable investment taxonomies and setting due diligence regulation on sector-specific harmful activities.
Accelerator funds offer organisations a way to explore nature finance opportunities and upskill investors and project developers. The UK Nature Accelerator, run by Finance Earth, supports projects and businesses engaged in nature restoration and aims to create a scalable pipeline of NbS investments for early-stage projects.
The Ecosystem Condition Protocol seeks to bridge the gap between corporate biodiversity reporting and biodiversity credit markets by creating a common framework for measuring ecosystem conditions, akin to the Greenhouse Gas Protocol. This facilitates consistent corporate reporting and biodiversity market transactions and addresses the inconsistent use of ecosystem condition metrics across different credit schemes.
Evidence-based research should guide conservation strategies. A recent study indicates that scaling successful nature conservation interventions could be transformative in halting and reversing biodiversity loss. A strategic plan for the planet could support business on how and where to restore habitats.
Empowering local researchers and practitioners also enhances policy effectiveness. The Global Environment Facility (GEF) supports biodiversity-related capacity-building projects, particularly in the world’s least-developed nations. Dr Leonardo De Sousa Miranda, a biologist at Lancaster University, received the 2023 Ramboll Foundation Award for his research on biodiversity conservation in the Amazon rainforest. His research is beginning to show a strategic plan that makes the case for avoidance of deforestation based on carbon metrics.
Further, whilst indigenous peoples make up less than 5% of the world’s population, they protect around 80% of global biodiversity. Including social considerations is essential for successful NbS implementation as well as promoting social equity and environmental justice.
Nature positive investment opportunities are increasing through private sector transformation, but greater scaling of investment and financial realignment is still needed to close the gap.
