Chapter 1: The changing biodiversity finance landscape since 2020

The scale of biodiversity finance has improved since 2020, yet it remains insufficient to counter the pace of natural decline. While global climate finance surpassed US$2 trillion in 2024, biodiversity finance reached only approximately US$300 billion. The global biodiversity financing gap is currently estimated at US$1.317 trillion per year. A critical imbalance exists as nature-negative financial flows—those supporting activities harmful to ecosystems—reached US$7.3 trillion in 2023, which is roughly 30 times the total investment in nature-based solutions (NbS). Environmentally harmful public subsidies account for US$2.4 trillion of this total. Although private finance for biodiversity grew eleven-fold in the four years leading to 2024, it still represents a relatively small share of total finance. Furthermore, official development assistance (ODA) for biodiversity witnessed a 23% decrease in 2025, its largest drop on record, which threatens progress in low- and middle-income countries (LMICs).

Chapter 2: Towards a verdant future—nature finance in action

Closing the financing gap requires both increasing capital for conservation and aggressively reducing flows that harm nature. The report advocates for treating nature as productive capital that the entire economy depends upon, rather than an unpriced externality. Evidence shows that more than half of global GDP, approximately US$58 trillion, is moderately or highly dependent on nature. The transition must move from isolated pilot projects to implementation at scale by aligning economic policy, public investment, and risk management behind environmental protection.

Reasserting public sector leadership

The redirection of harmful subsidies is identified as the single largest fiscal lever available. Redirecting just 10% of the most distortive agricultural incentives towards nature-positive practices could generate up to US$2.4 trillion in global economic gains by 2040. Governments are recommended to co-lead a government-wide review of all subsidies in agriculture, forestry, and fisheries and publish clear reform timetables. Spatial planning is another foundational tool; China’s Ecological Conservation Redline initiative currently protects over 30% of its land area. Additionally, mandatory biodiversity net gain requirements, such as the 10% uplift mandated in England from 2024, hardwire nature into development. Multilateral Development Banks (MDBs) are urged to set explicit nature finance targets, as their biodiversity-related finance reached nearly US$14 billion in 2023 but remains small relative to their overall balance sheets.

Mobilising financial markets for nature

Financial innovation is necessary to match resources with conservation needs, but it cannot substitute for the underlying economic conditions that make nature investable. The sustainable debt market grew to over US$650 billion in 2025, yet only 15% of green and sustainability bonds have funded nature-related projects. Innovative instruments like Rare’s Small-Scale Fisheries Impact Bond demonstrate how pay-for-success models can restore ecosystems while strengthening livelihoods. Blended finance vehicles, such as the Tropical Forests Forever Facility which aims to raise US$125 billion, use public or philanthropic capital to de-risk private investment. Governments and regulators should establish credible market rules and demand signals for products like biodiversity credits to provide the scale and certainty required by institutional investors.

Strengthening supply chain resilience for business and nature

Agriculture is the primary driver of deforestation, accounting for an average of 86% of global forest loss over the past decade. In 2024, private financial institutions held US$8.9 trillion in exposure to high-risk deforestation sectors, with many still lacking formal policies. Shifting dynamics require robust policy frameworks and full traceability in commodity supply chains. Similarly, the energy transition requires large quantities of minerals; public investment in this sector quadrupled to US$65 billion in 2025. Adopting circular economy practices, such as reuse and recycling, could reduce the demand for new mining by up to 40% by 2050, thereby protecting sensitive ecosystems from extraction impacts.

Advancing corporate leadership and harnessing technology for nature finance

Corporate leadership must move beyond compliance to treat nature-related disclosure as a business strategy tool. By late 2025, 179 banks and asset managers with US$22 trillion in assets under management had registered as Taskforce on Nature-related Financial Disclosures (TNFD) adopters. Technological advances in artificial intelligence (AI) and geospatial analytics are improving the ability to evaluate species abundance and ecosystem health with greater precision. However, the rapid expansion of AI infrastructure itself carries environmental implications, with global investment in data centres reaching US$580 billion in 2025. It is critical to integrate biodiversity considerations into the planning and siting of this digital infrastructure from the outset.

Conclusion

While the financing gap is widening, the foundations for closing it are stronger than they were in 2020. The first priority is to stop financing the problem by reforming harmful subsidies and integrating nature into climate and development decisions before capital is committed. Finance ministries are uniquely positioned to lead this shift by connecting budgets, debt management, and public investment to nature-positive outcomes. The report concludes that what is required now is not new knowledge, but the political will and sustained leadership to act on existing evidence before ecological and economic losses reach an irreversible scale.