Safeguarding the natural systems on which economies and societies depend requires mobilising public and private biodiversity finance at scale. This report provides a practical reference for policy makers, financial institutions and conservation practitioners seeking to unlock and scale biodiversity finance. It maps and assesses key biodiversity finance instruments and mechanisms, examining their current use and potential to advance biodiversity objectives. The report also explores how different instruments interact and complement one another, and how real-economy and financial-sector approaches can work together to direct capital towards biodiversity outcomes. In addition, it examines the broader conditions that influence the scale and effectiveness of biodiversity finance, including coherent policy and regulatory frameworks, robust biodiversity data and metrics, and investable project pipelines. By combining a detailed assessment of financing options with an analysis of their enabling factors, the report offers actionable recommendations to strengthen the design, uptake and impact of biodiversity finance instruments and mechanisms.
Mobilising Public and Private Finance for Biodiversity
Abstract
Executive summary
Biodiversity and the ecosystem services it supports are the foundation of economies and human well-being. Their rapid decline poses systemic risks to supply chains, productivity and fiscal stability, demanding urgent policy and financial responses.
While the scale of the challenge is substantial, so too is the opportunity. A transition towards economies, businesses and financial systems that value and sustain biodiversity can reduce long-term risks, strengthen economic resilience and support new sources of value creation and investment across sectors.
Finance is central to achieving the objectives of the Kunming–Montreal Global Biodiversity Framework (KMGBF), including its mission to halt and reverse biodiversity loss by 2030. Conserving ecosystems, restoring degraded landscapes and shifting towards more sustainable production and consumption patterns require sustained, well-directed investment. The Framework’s finance targets, including mobilising at least USD 200 billion annually from all sources, have created renewed momentum for national and international action.
However, current financial flows remain structurally misaligned with biodiversity objectives. The gap between investment in conservation and restoration and what is needed has been estimated at hundreds of billions of US dollars annually and growing. Moreover, public and private financial flows that drive biodiversity loss continue to far exceed investment in nature-positive activities.
Public finance currently accounts for most biodiversity-related expenditure, reflecting the public-good nature of ecosystem services. However, fiscal constraints, rising debt and competing policy priorities mean that governments cannot close this gap alone. Mobilising private finance at scale is therefore essential, but it requires coherent public policy, credible regulatory frameworks and institutional capacity.
Encouragingly, awareness of nature-related risks and opportunities is increasing across the financial sector. Impact investors are increasingly financing biodiversity and broader nature-related projects, while mainstream financial actors, such as institutional investors and insurers, are becoming more actively engaged. At the same time, innovation in nature finance is emerging, with new instruments, structuring approaches and digital tools that can support the mobilisation of capital towards biodiversity outcomes.
This report examines how to scale and better align public and private finance for biodiversity. It reviews real economy and financial sector instruments, identifying practical policy options for governments and public finance institutions. It also clarifies the enabling conditions required to deliver credible and durable biodiversity outcomes.
Real economy and financial instruments are tools, not solutions. Payments for ecosystem services, nature markets, green bonds and other mechanisms can mobilise finance for biodiversity, but their effectiveness depends on the policy and institutional environment in which they operate. Where incentives are misaligned, regulation is weak or enforcement capacity is limited, financial innovation alone will not deliver biodiversity outcomes at scale. Coherent policy frameworks, well-functioning markets and effective institutions are therefore foundational.
Aligning financial flows is as important as mobilising new finance. Biodiversity loss is driven by persistent economic incentives that favour ecosystem degradation, including environmentally harmful subsidies, weak governance and the underpricing of ecosystem services. As a result, biodiversity-positive investments often operate against prevailing market signals. Reforming harmful financial flows is therefore at least as important as mobilising new finance.
Private finance is complementary to public finance – not a substitute. While private capital can play a critical role in financing biodiversity, many conservation and restoration activities generate limited or uncertain financial returns and require public and philanthropic funding. Public finance therefore remains indispensable – both as a primary source of funding for biodiversity outcomes that markets do not deliver, and as a catalyst to mobilise private capital where commercially viable opportunities exist.
Strong governance, co-ordination and partnerships are central to success. Scaling biodiversity finance requires co-ordination across governments, financial institutions, development actors, businesses, and communities, including Indigenous peoples and local communities. Policy incoherence remains a major barrier. Governments have a central role as system architects, aligning incentives, strengthening institutions and ensuring inclusive, credible and effective financing approaches. Strong partnerships are equally important for developing pipelines of investment-ready biodiversity projects, ensuring that finance can be deployed effectively and translated into positive biodiversity outcomes.
The following policy actions can support governments and public institutions in mobilising public and private finance for biodiversity:
1. Align economic incentives with biodiversity objectives. Reform environmentally harmful subsidies, scale up biodiversity positive taxes, fees and other economic incentives to correct market distortions and reward conservation, sustainable use and restoration of biodiversity.
2. Create and strengthen markets for biodiversity. Establish strong regulatory frameworks, issue biodiversity-specific sovereign bonds, and use demand-side levers (e.g. public procurement; biodiversity net gain requirements) to support the development of well governed markets and revenue streams for biodiversity outcomes.
3. Improve investment conditions and share risks strategically. Use concessional finance, credit enhancement, insurance and project preparation support to de risk investments and crowd in private capital, particularly where public additionality is clear and market barriers remain significant.
4. Strengthen targets, data and metrics. Strengthen biodiversity targets, metrics and data systems, to support robust and credible measurement of biodiversity outcomes and ensure environmental integrity.
5. Enhance transparency, disclosure and accountability. Improve the consistency, quality and comparability of disclosures, taxonomies and verification systems, including through digital tools, to reduce greenwashing risks and support informed financial decision making.
6. Reinforce governance and lead by example. Align public institutions, budgets and development finance with biodiversity goals, improve enabling systems and oversight, and facilitate co-ordination and market participation.
