Designed for governments, non-government organisations, the private sector, and investors, the LBIN refocuses investment into nature-positive activities by promoting biodiversity and lays the groundwork to prepare investors with strategies to begin financing and planning sustainable conservation objectives. Employing the United Nations Development Programme (UNDP) Biodiversity Finance Initiative (BIOFIN) framework to analyse the mechanisms explored, the LBIN is broken down into the following chapter themes:

• Revenue generation
• Effective delivery
• Expenditure realignment
• Avoid negative-impact expenditures
• Catalysts

Revenue Generation

Private and public collaborations have developed revenue generating mechanisms for biodiversity conservation. Increasing private sector participation highlights the growing appetite for collaborative investment mechanisms. A framework analyses each mechanism by measuring scale, timeframe, level, payer, value, direct or mainstream revenue criteria. Revenue generating mechanisms include:

• Carbon and biodiversity markets
• Debt-for-nature swaps, green bonds, and other debt instruments
• Green equity
• Biodiversity related fees and charges
• Government budgets and taxation
• Official development assistance (ODA)
• Philanthropy
• Natural infrastructure and payments for ecosystem services (PES)

Effective delivery

Creating coordinated allocation channels to delivery funding to biodiversity conservation projects is vital in effectively closing funding gaps. Combining the strengths of public and private collaboration to create a unified delivery strategy can achieve this. A framework analyses each mechanism by measuring level, leverage, theme, performance-based, direct or mainstreaming biodiversity criteria. Delivery mechanisms include:

• Green micro-finance
• Protected areas
• Tax credits for conservation
• Guarantees

Expenditure realignment

Cooperation from all global actors is vital in realigning investment towards positive outcomes for biodiversity. Internationally, treaties such as the CBD can identify negative impacts and set the stage for sustainable standards and management for governments and financial institutions to adopt and integrate into policies and operations. A framework analyses each mechanism by measuring scale, timeframe, level, direct or mainstreaming biodiversity, reducing/improving negative/positive impact criteria. Expenditure realignment mechanisms include:

• Reducing/diverting harmful subsidies to nature positive projects
• Ecological Fiscal transfers
• Sustainable supply chains
• Biodiversity investment risk management

Avoid negative-impact expenditure

The LBIN is vocal about activities harming biodiversity and their consequences affecting actors in the global economy. A framework analyses each mechanism by measuring level, direct or mainstreaming biodiversity, potential, performance-based criteria. These include:

• Taxation
• Invasive species policies
• Green insurance
• Biodiversity subsidies
• Environmental impact bonds, and assessments
• Community conservation

Catalysts

Catalyst networks flowing from the subnational, national, to the international levels is needed to facilitate biodiversity investment. Critical to this network are national strategies and coordinating frameworks making it possible for financial flows to reach objectives. Among these are BIOFIN and the Taskforce on Nature-related Financial Disclosures (TNFD).

Moving forward, the objectives requiring further progress and assessment in the following eight areas:

• Risk assessment and disclosures
• Metrics of investment impact
• Finalisation of National Biodiversity Strategies and Action Plans (NBSAPs) and National Biodiversity Finance Plans (NBFPs)
• Harmful subsidies reform
• Sustainable supply chain transitions and investment risk management
• Capacity building and financial support
• Reform of laws and regulations discouraging ESG investments
• Alignment of investment portfolios with individual and institutional values

Overall, all global actors will be required to collaborate on all fronts to develop a stronger sustainable financial system which can support conservation efforts.

1. Ecosystem services and natural capital are two terms frequently used in sustainable finance to address components related to biodiversity conservation. However, they are often incorrectly used interchangeably. According to the Natural Capital Coalition, natural capital refers to the stock of renewable and non-renewable resources (e.g., plants and natural gas respectively) that combines to yield a flow of benefits to people (e.g., trees to timber, fish to protein). Contrastingly, ecosystem services refer to functions performed by ecosystems that have direct or indirect benefits to people (e.g., climate regulation). Sustainable finance, and the financing mechanisms addressed in the LBIN, focuses on biodiversity conservation and thus supporting ecosystem services from the world's stock of natural capital.
2. Often described as the richness of all life on earth, authors note that biodiversity is declining at tens to hundreds of times the natural extinction rate in some regions. Currently, we are falling short of investments in biodiversity by 600 – 800B/annum. The public sector represents 80% of available funding, with significant increases in private sector contribution required to close this funding gap. However, financial institutions’ commitments are increasing, and a plethora of pledges, coalitions and investor initiatives are in action.
   
3. In Japan 2010, the Conference of Parties (COP 10) established the Aichi Biodiversity Targets. These Targets were adopted by 193 signatories to the CBD to support global biodiversity. However, all 20 targets were not met by the signatories and received scrutiny for their ambiguity and lack of enforcement to address root causes of negative impact activities. The forthcoming 2030 Biodiversity Targets are expected to address the failures of the Aichi Biodiversity Targets with a link to the UN Sustainable Development Goals (SDGs).
4. Many of the delivery mechanisms described incentivise private investments by decreasing investment risks. For example, in the context of mainstreaming biodiversity investments, delivery mechanisms can incentivise the allocation of investment proceeds towards biodiversity conservation interventions through green bond investments in renewable energy or agriculture.
5. Private sector progress in realigning capital has been lagged by weak institutional frameworks and limited data. In response, major international institutions, sponsors, and investors have collaborated to form catalysts like the TNFD.
6. Government funding is valuable in sustaining production and economic progress. However, in 2019 the negative flows of funding towards harmful subsidies totalled USD 1,020 billion compared to a USD 143 billion positive flow to activities geared towards promoting biodiversity conservation. Instead, subsidies should incentivise resource efficient activities such as integrated land- and water-use planning.
7. Organisations such as the UNDP and International Union for Conservation of Nature (IUCN) have been instrumental in guiding national governments through the complexities of evolving biodiversity needs. They support NBSAPs and NBFPs in developing countries whose transition into sustainable activities is vital in advancing biodiversity conservation.
8. Case studies, graphs, tables, and in-depth reviews of sustainable finance information is in the LBIN. Common icons are used to identify criteria which explain the components of the various mechanisms analysed in the LBIN. These descriptive and graphical indicators enrich investor understanding when reading the LBIN.