Biodiversity and Development Finance 2015-2022

Executive summary

Development finance for biodiversity: Trends over 2015-22

• Official development finance (ODF) for biodiversity increased from all sources between 2015 and 2022.

• Overall, the total increased sharply over this period considering two approaches that either:

  • apply a 40% coefficient on a portion of data as having a significant objective (i.e. biodiversity‑specific ODF), ranging from USD 7.3 billion in 2015 to USD 11.1 billion in 2021 and USD 15.4 billion in 2022; or

  • reflect the full values of these flows (i.e. biodiversity-related ODF), ranging from USD 10.9 billion in 2015 to USD 18.5 billion in 2021 and USD 25.8 billion in 2022.

• All in all, the contribution of development finance to the Kunming-Montreal Global Biodiversity Framework (KMGBF) is currently 23% away from its Target 19a (i.e. USD 20 billion by 2025), considering the biodiversity-specific approach.

• From 2015 to 2022, bilateral Development Assistance Committee (DAC) members’ ODF for biodiversity grew between 8%-27%. However, flows towards biodiversity as a principal objective decreased by 17%, from USD 4.6 billion in 2015 to USD 3.2 billion in 2021 and USD 3.8 billion in 2022. Furthermore, biodiversity considerations still represent a relatively low share of the total ODF portfolio (4%-7%, or USD 6.1-9.7 billion on average over the period). While mainstreaming across activities is essential – and particularly in nature-dependent sectors – donors may consider raising their efforts towards core biodiversity-related activities, to increase and improve biodiversity and its ecosystem services and ensure that their impacts are sustained in time.

• Estimates of multilateral institutions’ ODF for biodiversity grew between 716%-824% over the period. Contrary to bilateral ODF, contributions to activities with principal biodiversity objectives under the Rio marker system have been increasing, from USD 0.1 billion in 2015 to USD 1.1 billion in 2021 and USD 2.1 billion in 2022. However, the share of biodiversity‑related activities out of the total multilateral ODF portfolio remained relatively low (2%-3%, or USD 2.4-4.8 billion on average over the period) and need to increase for these institutions to contribute meaningfully to the KMGBF.

• While bilateral non-DAC providers – including South-South and triangular co-operation – provide relatively low and volatile levels of international finance (e.g. fluctuating from USD 40.2 million in 2018 to USD 26.9 million in 2021 and USD 30 million in 2022), their engagement in biodiversity issues has been growing.

• Biodiversity-related development finance from private philanthropies increased from USD 501 million in 2017 to USD 700 million in 2022, yet it decreased compared to 2021 (USD 1 billion).

• Private finance mobilised with public finance has more than doubled, from USD 748 million in 2021 to USD 1.8 billion in 2022. However, these amounts are still far from those achieved in other policy areas, such as climate change (USD 16.1 billion on average over 2017-22), and meeting Target 19 of the KMGBF requires greater mobilisation of private flows.

Allocations by financial instrument, income level and region

• While DAC members’ support to biodiversity was mainly delivered in the form of grants, multilateral institutions primarily used concessional loans – in line with their respective mandates. Notably, the bulk of multilateral financing is attributed to multilateral development banks, accounting for 71% of the total over 2015-22. In contrast, DAC donors mainly provide official development assistance, which is, by definition, concessional in character, comprising grants and soft loans.

• Least-developed countries and low-income countries mainly received grants from both types of providers (83% of DAC members’ ODF over 2015-22 vs. 52% of multilateral finance). Middle-income countries mainly received concessional loans from these providers (53% and 84%, respectively).

• Overall, Africa and Asia were the regions that benefited the most from DAC members, receiving USD 2.9 billion (39% of total biodiversity-related ODF) and USD 2 billion (27%), respectively, on average annually over the period. Asia was the first destination of multilateral institutions, receiving 39% of biodiversity-related finance, followed by America (34%) and Africa (25%).

Sectoral distribution

• Over 2015-22, biodiversity-related ODF from DAC members and multilateral institutions concentrated in activities related to general environment protection, agriculture and water. However, the degree to which biodiversity was integrated across sectors varied among providers. DAC members mainstreamed biodiversity in 23% of their development finance for agriculture while it was 12% for multilateral institutions. In water-related activities, these percentages were 20% and 7%, respectively, and for energy 3% and less than 1%, respectively. In forestry there was a substantial integration of biodiversity concerns (78% for DAC members and 64% for multilateral institutions). Nevertheless, the variable integration of biodiversity-related considerations across sectors highlights the need for greater and more comprehensive biodiversity mainstreaming.

Thematic analysis: Climate change, gender equality, Indigenous peoples and local communities

• The share of biodiversity-related ODF that also addresses climate change has steadily increased, from 78% in 2015 to 92% in 2022. However, the opposite does not hold true, as biodiversity objectives are only reflected in 20% of total climate-related ODF on average over the same period, a trend that declined from 24% in 2015 to 19% in 2022. Given that total volumes towards climate-related objectives are at least three times higher than towards biodiversity, and as momentum to reach the Paris Agreement continues increasing, providers must integrate biodiversity-related considerations in climate programming, to maximise co-benefits and address trade-offs.

• The share of biodiversity-related ODF addressing gender equality increased from 46% in 2015 to 68% in 2022. Yet only about 12% of development finance targeting gender equality also included biodiversity in 2021 and 2022. DAC members could explore integrating biodiversity and gender equality across their portfolios, acknowledging women’s role in conserving and sustainably using biodiversity, including their involvement in policy making and implementation.

• The estimated share of biodiversity-related ODF targeting Indigenous peoples and local communities (IPs and LCs) remains low, representing 6% of DAC members’ total biodiversity-related ODF in 2022, in line with past assessments. Most of this funding (56%) corresponds to activities addressing the Convention on Biological Diversity’s objectives as a main priority, underscoring the connections between IPs and LCs and nature.