1 A-track project overview

The report forms part of the A-Track project, a four-year, €11 million initiative aimed at accelerating action for nature by businesses, financial institutions and governments. It focuses on how finance can contribute to nature-positive outcomes by improving measurement, valuation and decision-making on natural capital and biodiversity. The publication targets finance, policy and biodiversity experts and sets the foundation for future work on scaling nature-positive finance.

2 Why does nature loss matter?

Nature underpins economic and social systems, yet is in rapid decline. In 2023, six of nine planetary boundaries were exceeded, increasing systemic economic risk. More than 85% of large listed companies depend directly on nature, while around 75% of eurozone bank loans are linked to nature-dependent sectors. A partial collapse of ecosystem services could reduce global GDP by US$2.7 trillion by 2030. Nature is also central to climate mitigation, absorbing around half of anthropogenic carbon dioxide emissions. These dynamics create material financial risks and reinforce the need to align financial flows with the Global Biodiversity Framework (GBF).

3 What is nature finance?
3.1 Building an understanding of nature finance

The report identifies a biodiversity finance gap of approximately US$700 billion per year to meet GBF targets by 2030. Private finance currently contributes about US$35 billion annually, compared with US$5 trillion in flows linked to activities harming nature. Nature finance is defined as finance that halts and reverses nature loss, encompassing both biodiversity and broader ecosystem considerations. The cost of inaction is assessed as significantly higher than the cost of action.

3.2 Nature-positive finance through the lens of the mitigation hierarchy

Nature-positive finance is structured around the mitigation hierarchy: avoid, minimise, restore and offset. The report distinguishes two branches. Nature recovery finance focuses on redirecting existing capital to reduce pressures on nature, supporting the halting of loss. Nature conservation finance supports restoration and conservation activities that deliver net-positive outcomes. Avoiding and minimising harm are assessed as more immediately investible, while restoration and conservation often require blended finance to meet risk–return expectations.

3.3 The challenge of nature being a public good

Nature is largely a public good, characterised by non-rivalry and non-excludability, which limits the ability of markets to price ecosystem services. This leads to underinvestment despite high societal value. While some services such as water or timber can be monetised, others such as pollination and clean air cannot. The report notes that private finance can still play a role by supporting business models that improve productivity, resilience and risk management while delivering co-benefits for nature.

4 Towards a role for private commercial capital in nature-positive finance
4.1 The current gap in nature-positive finance

Total finance for nature is estimated at around US$200 billion annually, over 80% of which comes from public sources and philanthropy. To meet future needs, private capital is expected to increase to around one-third of total flows by 2050, reaching approximately US$210 billion per year. Key opportunities are expected in sustainable land management and ecosystem restoration. Aligning risk–return expectations remains a central challenge.

4.2 Building nature and financial value simultaneously

Empirical evidence from biodiversity finance deals suggests that projects focused on halting nature loss tend to generate stronger financial returns, while high-impact restoration projects often require blended finance. Portfolio managers may use biodiversity impact as a differentiator when financial metrics are comparable. The report emphasises that financial institutions need not wait for fully developed policy frameworks to act.

4.3 Key barriers facing private commercial capital

Identified barriers include unclear returns and impact metrics, limited deal scale, capacity and data gaps, long timelines, high perceived risk, and regulatory uncertainty. A central finding is that nature finance is often narrowly perceived as low-return conservation finance, limiting private capital engagement. Addressing definitional clarity and improving confidence in financial instruments are highlighted as priorities.

5 Scaling private commercial capital for nature-positive finance
5.1 Evidence of momentum

Private finance for nature is growing, with biodiversity bond issuance increasing by 33% in 2023, although nature remains underrepresented in sustainable finance markets. Financial institutions are increasingly engaging through initiatives focused on biodiversity and deforestation.

5.2 Instruments currently used for nature-positive finance

The report outlines a range of instruments, including use-of-proceeds bonds and loans, sustainability-linked instruments, debt-for-nature swaps, natural capital funds and emerging biodiversity credits. It emphasises that existing financial tools can already be deployed more ambitiously to support both halting and reversing nature loss, alongside engagement and stewardship.

6 Conclusions and call to action

The report concludes that closing the biodiversity finance gap requires both reducing harmful financial flows and scaling investment in nature-positive activities. Clarifying the role of private capital and addressing perceived barriers are essential to unlocking an estimated US$10.1 trillion in economic opportunities from a nature-positive transition.