The State of Finance for Nature series is a flagship publication produced by the United Nations Environment Programme (UNEP). Launched in 2021, the series is released on a regular basis to provide a comprehensive assessment of global financial commitments to nature-based solutions (NbS). It serves as a primary resource for monitoring how much capital is being directed towards the protection, restoration, and sustainable management of ecosystems. By examining the landscape of both public and private finance, the series highlights the scale of investment required to meet international commitments, including those established under the Rio Conventions. The series tracks these developments over time, offering a transparent view of the global economic transition towards environmental sustainability.

The latest edition in the series, the State of Finance for Nature 2024, evaluates the current state of global natural capital investment. It finds that while there are significant public and private financial contributions towards nature-based solutions, a substantial financing gap remains. This gap represents the difference between current investment levels and the funding required to meet global goals related to biodiversity loss, land degradation, and climate change. The 2024 report also highlights the ongoing challenge of nature-negative financial flows, which continue to drive environmental degradation. These findings underscore the need for a more rapid alignment of global finance with nature-positive outcomes to meet the targets set by the Rio Conventions.

Tracking global financial flows to nature-based solutions

The series establishes a rigorous framework for quantifying the amount of capital flowing into activities that support biodiversity and ecosystem health. It distinguishes between different sources of funding, providing a detailed breakdown of contributions from the public sector and the private sector. This analysis is crucial for understanding the current reliance on government funding and the potential for private capital to play a more significant role in environmental conservation. By tracking these flows over time, the series allows stakeholders to observe trends in how nature-based solutions are being integrated into broader economic and financial systems, providing a benchmark for progress in sustainable finance.

The financing gap and international environmental targets

A central component of the series is the evaluation of the financing gap. This involves comparing current levels of investment with the total funding required to effectively address the triple planetary crisis of climate change, biodiversity loss, and land degradation. The series aligns its assessments with the goals of the Rio Conventions, providing a clear indication of whether global financial efforts are sufficient to meet these internationally agreed-upon targets. This gap analysis serves as a call to action for policymakers and financial institutions, illustrating the magnitude of the scale-up required to achieve a nature-positive future and maintain the stability of the global environment.

Identifying and addressing nature-negative finance

Beyond simply tracking investments in nature-based solutions, the series provides a critical perspective on nature-negative financial flows. These are investments and subsidies that contribute to environmental degradation, such as those supporting activities that lead to habitat destruction or the loss of biodiversity. By identifying these harmful flows, the series offers a more holistic view of the global financial system’s impact on the environment. This focus allows for a more nuanced understanding of the challenges faced in redirecting capital, as it highlights the need to not only increase positive investments but also to phase out or repurpose finance that actively undermines ecological health.

Methodological approach to assessing environmental investment

The methodology employed throughout the series involves the systematic collection and analysis of data from a wide range of public and private sources. This data-driven approach ensures that the findings are robust and can be used to inform high-level decision-making. The series evaluates financial flows directed towards various types of nature-based solutions, assessing their effectiveness and their alignment with global environmental goals. This rigorous process provides a standardised way to measure progress, making it easier for different countries and organisations to compare their efforts and identify best practices in nature-related financial reporting and strategy.

Strategic applications for the financial sector

For finance professionals, the series provides a vital framework for aligning investment portfolios with nature-positive outcomes. It offers insights into how finance can be redirected from activities that harm the environment towards those that support sustainable development and ecosystem resilience. By using the data and analysis provided in these reports, businesses and investors can identify new opportunities for sustainable financial strategies. The series helps to clarify the risks associated with nature loss and the potential returns from investing in natural capital, thereby assisting the financial sector in playing a proactive role in addressing global environmental challenges and meeting international sustainability targets.