The latest BloombergNEF Biodiversity Finance Factbook paints a stark picture of investment shortfalls, with urgency growing.
Investment in biodiversity projects is failing to keep up with inflation, with just $208billion currently flowing through the sector globally each year. According to analysis, by 2030 financing will need to be eight times that figure to meet predicted needs, or $1.15trillion.
Public finance is one of the biggest driver of biodiversity conservation, accounting for well over half – $164billion – in total finance, rising $17.2billion year-on-year. Overseas development assistance and debt-for-nature swaps are two of the most common forms of this type of finance.
By comparison, private investment is actually falling, with a 53% decline in nature-based carbon offsets sine 2021. Adding to the mounting pressure, recent research has shown that most financial institutions are not effectively preparing for nature-related risks, with just 7.5% revealing they had executive-level insight in tbis area.
‘While financial investment into nature has risen since the Global Biodiversity Framework established in December 2022, it is still not on track to hit the 2030 targets agreed in Montreal. Currently, an estimated $942 billion is needed to meet the funding shortfall.
This a difficult challenge, but not impossible,’ said Hugh Bromley, Head of Food, Agriculture and Nature Research at BloombergNEF.
Funding must prioritize the most biodiverse, valuable and threatened biomes across the developing world, with BNEF identifying Brazil as the top priority,’ he continued. ‘This must be driven by both public and private finance – from debt-for-nature swaps to green and sustainable bonds and carbon offset issuance, among other tools. The next six years will be critical for the preservation and restoration the world’s nature systems.’
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