Summary

In December 2022, the parties to the United Nations Convention on Biological Diversity (CBD) adopted the Kunming-Montreal Global Biodiversity Framework (GBF). This report specifically addresses commitments under Target 14, which requires states to integrate biodiversity into financial sector regulations and align financial flows with GBF goals. The research assesses eleven jurisdictions, including major producer countries such as Brazil and Indonesia, and financial centres like Singapore and the United Kingdom. The assessment identifies a substantial implementation gap: while biodiversity is increasingly recognised, no assessed jurisdiction requires financial institutions to align all financing and investment decisions with the GBF.

Introduction

Biodiversity is a foundation of economic activity and financial stability. Its degradation can disrupt supply chains, weaken livelihoods, and increase systemic risks. Finance contributes to this loss by enabling agricultural, forestry, and mining activities that drive deforestation. Forests & Finance (F&F) seeks to hold the financial sector accountable for social and environmental harm in forest-risk commodity sectors including beef, palm oil, pulp and paper, rubber, soy, and timber. Stronger regulation is needed to redirect existing financial flows away from activities that harm biodiversity and ensure that positive finance is ecologically credible and rights-based.

Key jurisdictions and forms of financing of forest-risk commodities

The F&F database monitors 500 company groups involved in 22 forest-risk commodities. Research found that 380 of these groups attracted USD 894 billion in loans and underwriting services between January 2016 and September 2026. Activities in Brazil and Indonesia accounted for 44% and 18% of this credit, respectively. Brazilian banks provided more than a quarter of the financing (USD 249 billion), followed by institutions in the European Union (EU), United States (US), and China. Additionally, 192 company groups attracted USD 494 billion in bond and share investments as of September 2026, with US financial institutions holding almost 60% of these investments.

Types of financial regulation

The report defines financial regulation broadly, encompassing monetary policies, banking regulations, and capital market rules. Central bank policies include collateral requirements and liquidity schemes. Banking regulations focus on micro-prudential and macro-prudential supervision, including risk management and capital requirements. Capital market regulations address consumer information and fund labelling to prevent greenwashing. Other relevant areas include regulations on money laundering, corporate disclosure, and the stimulation of sustainable activities through taxonomies and green bonds.

Jurisdictional assessments

Brazil restricts government-controlled rural credit for farms linked to illegal deforestation or indigenous lands, but these safeguards do not extend to ordinary bank lending or capital market products like FIAGROs. Canada has a fragmented, climate-focused framework; while OSFI’s Guideline B-15 is mandatory, reporting standards remain voluntary and lack a dedicated nature-related standard. In CEMAC, the prudential framework does not yet address environmental or biodiversity risks. China classifies green finance without imposing portfolio-level requirements or restricting the financing of harmful activities. The EU has a comprehensive architecture but recent reforms have narrowed corporate sustainability reporting coverage and delayed due diligence requirements.

In Indonesia, sustainable finance plans are required, but taxonomies are not yet binding across full portfolios. Japan relies on non-binding guidance and lacks an economy-wide green taxonomy. Malaysia has introduced a climate-change taxonomy, but nature-related tools still rely on principles-based guidance. Singapore has advanced tools like the Singapore-Asia Taxonomy, but treatment of biodiversity remains limited and largely non-binding. The United Kingdom has strengthened anti-greenwashing rules but abandoned its green taxonomy. The United States represents a case of regulatory reversal, with the withdrawal of interagency climate risk principles and proposed rescission of federal climate disclosure rules.

Conclusions

International commitments have not yet translated into binding financial regulation. Financing of ecosystem conversion remains largely unrestricted, and just transition principles are mostly absent. Double materiality remains exceptional, with financial materiality continuing to dominate regulatory frameworks. Biodiversity remains secondary to climate considerations, and monetary policy is largely biodiversity-blind. Regulatory trajectories are uneven and, in several cases, regressive. Closing the gap requires a shift from voluntary risk awareness to binding portfolio-level obligations backed by credible enforcement.

Overarching recommendations for all jurisdictions

Jurisdictions should establish measurable, time-bound commitments to integrate biodiversity into monetary policy and prudential regulation. Central banks should address biodiversity in collateral frameworks and asset purchase programmes. Regulators must require double materiality assessments and transition plans with clear targets. Transparency must be improved by requiring all institutional investors to disclose investee companies and amounts invested. Finally, sustainability and biodiversity regulations must be protected from being relaxed, and harmful subsidies must be eliminated to meet the global goal of reducing harmful incentives by at least USD 500 billion annually by 2030.