From biodiversity commitments to investable opportunities

The global biodiversity crisis is increasingly recognised as a significant economic challenge, with more than half of the world’s GDP—approximately 44 trillion USD—moderately or highly dependent on nature. Despite this, financial flows remain misaligned; for every US$1 invested in nature enhancement, roughly US$30 is spent on activities that cause destruction. Private finance currently accounts for only 10% of total investment in nature. The Dutch Fund for Climate and Development (DFCD) aims to address this gap through its blended finance structure, specifically the Origination Facility (OF), which targets a minimum of 25%, and ideally 50%, of its funding for biodiversity-positive businesses. These businesses often struggle to capture the value of the ecosystem services they provide within traditional market models, requiring specific enabling conditions such as regulation, market demand, and reliable data to become investable.

A landscape perspective

Biodiversity outcomes are shaped by interactions that extend beyond a single company’s operational boundaries. The DFCD takes an ‘outside-in’ perspective, ensuring projects are informed by their broader landscape context and aligned with local priorities. This approach involves engaging stakeholders across sectors, including governments, civil society, and local communities, to support climate-smart development. While private finance is vital, some essential activities like nature conservation and restoration generate public goods without standalone commercial models. Therefore, private investment must work as a complementary part of a system alongside domestic public finance and philanthropic capital to catalyse coordinated responses to environmental challenges.

Not a ‘monoculture’: different pathways for biodiversity investment

The DFCD identifies two primary models for integrating biodiversity into private investment. Model 01 focuses on biodiversity-positive businesses whose core commercial model is the restoration, conservation, or sustainable management of nature. Model 02 involves mainstream businesses in sectors like agriculture and forestry that are transitioning toward nature-positive practices. These models are not mutually exclusive; small ‘dark green’ enterprises and larger commercial entities both play roles in a shared landscape. The OF helps these businesses strengthen governance, improve traceability, and integrate nature into their corporate strategies.

How the Origination Facility assesses biodiversity contribution

Beyond standard safeguards, the OF assesses projects based on their validated focus on biodiversity impact. Key criteria include the restoration and protection of nature, the reduction of local drivers of biodiversity loss (such as deforestation and pollution), and the local relevance of the intervention. The facility also evaluates the potential for scale and the commitment to biodiversity stewardship, which involves collective action with other economic actors in a shared region to address shared dependencies on nature.

The role of origination

Many biodiversity-related opportunities are not immediately ready for commercial investment. The OF provides grants and technical assistance to help businesses test and validate models before seeking commercial capital. This support includes strengthening financial management, enhancing supply chain traceability, and establishing biodiversity baselines. By leveraging the networks of SNV and WWF-NL, the OF connects businesses to wider landscape actors and knowledge essential for long-term success.

Investment pathways emerging from practice

Practical examples of these pathways include Forest Carbon in Indonesia, which manages 187,000 hectares of forest and wetland restoration supported by carbon credit revenues, and Phuc Sinh in Vietnam, a coffee exporter that secured a US$15 million investment from FMO after expanding sustainable practices to 7,000 smallholder farmers. In Madagascar, the Mitsiry Biodiversity and Climate Fund mobilises capital for nature-positive enterprises, aiming to support 30,000 hectares of sustainably managed land. Additionally, Colombia’s CAS integrates conservation across 23,000 hectares of commercial forestry, designating 7,000 hectares specifically for restoration.

What are we learning?

The DFCD experience highlights that investable biodiversity-positive models exist, but many require origination support to become bankable. Biodiversity-related action can improve commercial performance by increasing resilience and opening new revenue streams. Making these links visible is essential for shifting biodiversity from being seen as a secondary impact benefit to a core part of the investment case. Furthermore, credible biodiversity data and monitoring are required to strengthen investment decisions, though generating this evidence is often resource-intensive.

Recommendations

Governments and donors should ensure funding for early-stage origination and fund the enabling conditions, such as landscape governance, that underpin nature protection. Development Finance Institutions (DFIs) are encouraged to identify biodiversity as a source of value and develop greater flexibility for emerging business models with longer investment horizons. For businesses, the report recommends identifying where biodiversity is material to the commercial model and planning for scale from the outset rather than remaining in isolated pilots.

What comes next?

Transitioning to a nature-positive economy requires a landscape perspective that recognises the diverse roles of businesses, investors, and communities. Building on the lessons from the OF, further innovation in financing structures and closer alignment between public and private actors will allow more capital to be directed toward investments that provide lasting value for people and the planet.