This collection of opinion pieces and interviews by industry leaders introduces key biodiversity finance themes. A brief summary of each piece is outlined below.

TNFD: fusing markets and science to manage nature risks

Emily McKenzie discusses the Taskforce on Nature-related Financial Disclosures (TNFD). Essentially a risk management and reporting framework for nature-related risks, McKinzie explores how the TNFD will clarify and align international targets to assist financial institutions in their transitions to nature-positive activities.

Climate-smart forestry practices: the key to restoring biodiversity?

This interview with EFM Investment and Advisory CEO Bettina Von Hagen offers insights into EFM’s responsible forest management practices. As a conservation finance specialist, the interview looks at how EFM balances timber consumption with long-term ecosystem health and productivity.

Nature risks through a credit lens

Through their data analyses, Fitch Ratings provides insight into emerging regulations and market trends affecting investments. Here Fitech highlights how the TNFD will increase ‘latent risks’ of certain investments as our understanding of the financial sector’s responsibility to address them advances.

Investing in adaptation and biodiversity

Urs Dieterich of the Landscape Resilience Fund (LRF) discusses how biodiversity risk requires the adaptation of communities/businesses to ecosystems they depend on, and highlights ways LRF, and its investors, are financing biodiversity conservation projects.

Transparency will be key to Nature Action 100

In this overview of Nature Action 100, Peter van der Werf (Robeco) notes the aim of this initiative is to alert global corporations of their dependencies/impacts on biodiversity as well prepare them for the TNFD, which ultimately aims to steer businesses away from nature-negative outcomes.

COP’s special guest – Nature

In this piece Dr Simon Zadek, Chair of Finance for Biodiversity, considers three strategies that will strengthen the Convention on Biological Diversity (COP15). These include requiring state-owned banks to report commitments to a nature-positive portfolio, disallowing investments involved in nature-negative activities, and stronger governance.

There is a market for biodiversity – and it is expanding

Here, the benefits of forest certification schemes for forest owners are explored. It focuses on the Dasos Habitat Foundation (DHF) model that supports these schemes by allowing forest owners to outsource forest areas to DHF to conserve on their behalf.

Standards Catalyse Finance for Biodiversity Conservation

Naomi Swickard, CPO of Verra, unpacks their biodiversity focused certification standards. Swickard highlights Verra’s holistic approach, which considers all outcomes relating to biodiversity from emissions reductions to socio-economic improvements in communities.

NGFS: How central banks can confront biodiversity risk

This opinion piece explores how Central Banks are vital to creating national biodiversity conservation initiatives as the authority and influence they command shapes the conversations and expectations of retail financial institutions.

Lack of projects constrain conservation investment

This final piece explores findings from a 2021 survey by the Coalition for Private Investment in Conservation that a scarcity of investible opportunities restricts participation in biodiversity markets.

Overall, the initiatives explored in this collection of pieces demonstrates the financial industries’ shift away from nature-negative outcomes, and the growing investor interest to integrate biodiversity conservation into financial activities.

1. There is growing recognition on behalf of investors, financial institutions, and government organisations for more sustainable finance and biodiversity-related activities factored into financial decisions. This collective interest is shaped by our increasing understanding regarding biodiversity risk, and the business and social impacts that result from severe damage to biodiversity.
2. Scientific data and expertise support many initiatives featured in this insight. The TNFD, EFM, DHF, and Verra standards are all supported by research that supports their frameworks with scientifically accurate recommendations. Fusing these frameworks and standards with science strengthens its credibility and effectiveness in shifting financial institutions towards nature-positive activities.
3. The insight offers investors and institutions with examples of various biodiversity conservations available for them to participate in. A range of initiatives from investment and funding, on-the-ground management, and policy creation can be contributed by interested entities. This way, the insight proposes various opportunities to accommodate any portfolio or investment strategy with an interest in pursuing biodiversity conservation and sustainable finance.
4. Many of the articles in the insight feature private sector efforts in biodiversity conservation. Public sector entities like governments can offer valuable support by defunding nature-negative activities, redirect incentives such as subsidies to sustainable development, and enacting policies which prohibit continuing nature-negative activities. National support from governments will significantly promote biodiversity conservation initiatives in financial institutions and communities.
5. Company reputation hinges on performance and shareholder return. Decisions to formally engage in transparent reporting or conservation projects may not be a task executive managers feel their company is prepared for. However, companies who delay engaging in biodiversity conservation risk encountering future credit risk. Indecisiveness and failure to recognise shareholder expectations for company participation in sustainable finance can also affect public trust and company reputation.
6. Nature-based solutions are often more effective than renewable energy projects in regulating carbon emissions. Countries seeking to achieve net-zero climate targets often focus their attention to eliminating emissions from the source rather than pursuing nature-based solutions. However, nature-based solutions have secondary flow-on effects that benefit ecosystems beyond the target area. Restoring mangroves, forests, rivers, or coastlines can provide benefits for native wildlife, restore habitats, and contribute greatly to biodiversity.
7. Despite some challenges slowing biodiversity conservation activities from greater progress, investors and institutions are becoming increasingly aware of their dependencies and impacts on biodiversity and nature. Following this awareness, national and international developments are in motion to create the necessary frameworks, standards, and policies to help shift the industry towards nature-positive decisions. These developments support the notion that the industry is taking action to address, mitigate, and prevent further biodiversity loss as a result of financial sector decisions.