Holistic Approach Can Close the Biodiversity Funding Gap

Financing the goals of the Global Biodiversity Framework requires collective action, according to Samantha Deacon, Global Lead in Biodiversity and Ecosystems at Ramboll.

Launched under the banner of ‘making peace with nature’ – COP16 is now drawing to its conclusion, with the international biodiversity community of policymakers, scientists, Indigenous Peoples, businesses and financial institutions awaiting landmark agreements and consensus on:

the use of metrics and indicators for measuring biodiversity value;
ambitious targets and action plans in national biodiversity strategies;
new funds and mechanisms to [re-]direct finance towards nature protection;
renewed focus on Indigenous Peoples with equitable conservation action; and
a global system for sharing genetic information.

This is also the primer for COP29 later this month. The linkages are clear – biodiversity is the best natural defence against the climate crisis and COP16 needs to lead by example. And, as said by Frank Elderson of the European Central Bank at the recent IUCN Leaders Forum in Geneva, if we destroy nature, we destroy the economy.

The guiding star for halting the biodiversity crisis is the Kunming-Montreal Global Biodiversity Framework (GBF), which aims to put us back on track toward a world where nature thrives, ecosystems flourish and people benefit, averting the potential annual losses of up to US$2.7 trillion by 2030 from nature degradation.

But how can we secure the necessary resources to achieve these goals?

The biodiversity funding gap

The GBF, signed at COP15 in 2022, was the touchstone for agreement to create, enable and motivate global action on nature by governments and private organisations.

The biodiversity funding gap represents the shortfall between currently available funding and biodiversity conservation funding needs (i.e. for protected areas, productive landscapes, and urban environments). A 2020 study estimated an average of US$711 billion per year in additional funding is needed from governments and business to meet 2030 goals. This is in addition to the reported US$124 billion to US$143 billion of funding for global biodiversity conservation in 2019.

While the funding gap is substantial, it is exacerbated by nature-degrading financing from governments and business, estimated at US$7 trillion annually. The UN report concluded that funding for Nature-based Solutions (NbS) needed to almost triple from current levels (US$200 billion in 2022) to reach US$542 billion per year by 2030 to meet globally-aligned targets.

Leveraging public and private funding

In a ‘call for action’, the 10 Point Plan is a global initiative led by the Maldives, UK, Ecuador and Gabon, which is intended to support the implementation of the GBF and address the US$700 billion per year nature finance gap.

Endorsed by over 40 countries, the plan incorporates collective action from governments, financial institutions, the private sector, philanthropy, and civil society and is targeting a reduction of US$500 billion of harmful subsidies, mobilising US$200 billion in public and private finance for nature, and allocating US$30 billion of international public finance by 2030.

Delegates at the COP16 conference have discussed National Biodiversity Finance Plans (NBFPs), alongside National Biodiversity Strategies and Action Plans (NBSAPs), as these are the levers countries use to increase public and private expenditure on biodiversity.

According to the latest trackers, progress on updated NBSAPs remains insufficient and varied. With subsidy reform representing the biggest opportunity to close public nature-negative finance, countries have started undertaking national assessments on reducing harmful subsidies and providing positive biodiversity incentives – but there is still more to be done.

That said, even if harmful economic activity is greatly reduced, we will still need new sources of funding and to redirect existing financial resources.

Public finance continues to lead nature investment. Launched in 2023, the Global Biodiversity Framework Fund (GBFF) aims to scale financing through private, philanthropic and government investments. So far, pledges to the GBFF have raised US$243 million – meeting its initial target. However, there are doubts of its capacity to mobilise sufficient funds. Progress towards the US$20 billion international biodiversity finance goal for the Global South by 2025 is at 41%, but efforts need to accelerate.

Some positive examples were given at the IUCN Leaders Forum where funds are targeted and working, such as Food System Transition Funds operated by various banks and the public sector, led by the Joint SDG Fund. Investment firm Blue Orchard was highlighted for its micro-insurance packages to smallholders in Indigenous communities, which insure against weather events, for example. And Nature for Gabon has unlocked US$163 million in funding for ocean conservation, with The Nature Conservancy providing the “science” behind the investment, giving ESG investors confidence in the fund.

There were some strong themes coming out of the IUCN Leaders Forum, which have also been discussed at COP16. If they are to translate into tangible results, they need a holistic approach. This approach intertwines international agreements, collaborative action, funding scale-up, data, metrics and local knowledge:

We need to close the gap between financial institutions’ focus on business risk and the conservationists’ focus on environmental impact if we are to address the biodiversity crisis. There is a push to integrate nature-related financial risks into central banks’ mandates and incentivise private finance, including developing sustainable investment taxonomies and setting due diligence regulation on sector-specific harmful activities. These must account for impacts and lead to action (not simply reporting).
We need to listen and learn how Indigenous leaders think about economic benefits, as conservation actions related to business risk often involve Indigenous Peoples and local communities. Further, although Indigenous Peoples make up less than 5% of the world’s population, they protect around 80% of global biodiversity. Including social considerations is therefore essential for successful NbS implementation, as well as promoting social equity and environmental justice.
The private sector has the majority of financial, operational and technical solutions and can scale-up efforts. As we have seen with the disappointing status of NBSAP, the onus is on the private sector to halt and reverse biodiversity loss.

Maximising real-world impact

Businesses and financial institutions can champion nature-positive strategies through collaborative initiatives and forums like the Finance for Biodiversity Foundation, Business For Nature, and Nature Action 100. ESG strategies need to prioritise biodiversity KPIs and evidence impacts and solutions through science-based targets underpinned by robust biodiversity metrics.

Ultimately, bridging the biodiversity funding gap requires collective action, financial commitment, strategic partnerships, and grassroots action. Nature-positive investment opportunities are increasing through private sector transformation, but greater scaling of investment and financial realignment is still needed to close the gap.

This article was co-authored by Robert Nussey, Ramboll’s Nature Positive Manager.

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