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Info Service on Biodiversity and Traditional Knowledge (Aug25/03) Reasons to be sceptical of the growth in private biodiversity finance This paper looks at recent claims of the rapid growth in private biodiversity financing. While estimates suggest a surge in biodiversity-related investments — with figures quoted like $67 billion in equity and $34 billion in debt — the authors argue that much of this ‘growth’ is driven by shifting definitions and accounting practices rather than actual spending. For decades, biodiversity finance has been positioned as a promising new market, expected to mobilize trillions in private capital. However, past projections often failed to materialize, and the current wave of enthusiasm may reflect more conceptual rebranding than structural progress. The authors call this phenomenon “animated suspension” — a flurry of activity and jargon giving an illusion of momentum while structural barriers remain. Many equity funds self-label as biodiversity-related, yet often invest in companies like Nvidia or John Deere, which do not directly contribute to biodiversity protection. Similarly, most ‘biodiversity’ bonds dedicate only a small portion of proceeds to biodiversity projects. The absence of consistent definitions and standards allows investments that merely avoid biodiversity risk, rather than generating biodiversity benefits, to be included in headline figures. Geographically, moreover, private biodiversity finance is heavily skewed toward the Global North, despite the Global South holding most of the world’s biodiversity. For example, nature investing tends to focus on countries deemed financially stable, which limits funding where it’s most needed. Meanwhile, many of these investments rely heavily on public or philanthropic money via blended finance models, undermining the idea that private capital is independently driving biodiversity gains. The authors further highlight that only 3% of impact investing globally is directed at biodiversity, mostly in the Global North. The paper is also critical of debt-related instruments. Green bonds and biodiversity-linked bonds often overstate their impact due to vague or superficial key performance indicators, such as protected land area, without tracking actual ecological outcomes. Conservation impact bonds raise questions about whether they truly mobilize new funds or simply repackage existing public money. Debt-for-nature swaps, while targeting the Global South, are criticized for minimal actual funding for biodiversity and for reinforcing neocolonial dynamics and debt burdens. The upshot is that the authors caution that the expansion of private biodiversity finance is being overstated, which may generate overconfidence in this approach. Instead of relying on private finance alone, they advocate for stronger public policy, regulation, and structural reforms. Without this, biodiversity finance risks becoming a symbolic gesture that obscures the real changes needed to halt biodiversity destruction. We reproduce below the Abstract and Conclusion of the paper. With
best wishes, Off the charts? Reasons to be sceptical of the growth in biodiversity finance Jens
Christiansen, Audrey Irvine-Broque, Jessica Dempsey, Sara Nelson,
Elizabeth Shapiro-Garza, Patrick Bigger, Mine Isla Abstract: Recent estimates point to dramatic increases in private capital flowing to biodiversity. Examining main sources of this increase — equity investments and debt — this review asks how biodiversity finance is being calculated, and whether private capital flowing to biodiversity action is growing as much as reported. Furthermore, by examining the literature on the standards and metrics, we ask whether these increases are likely to facilitate biodiverse outcomes. Ultimately, some growth can be ascribed to conceptual innovations in measuring biodiversity-related finance. In several cases, the dollar value represented in nominally biodiversity-related transactions does not reflect actual amounts spent on biodiversity. This review points to a risk of overestimating private financing of biodiversity targets, which may generate overconfidence in this approach. Consequently, this review argues that optimism for private capital solutions should be tempered and accompanied by an upscaling of policy alternatives and regulations that address the financial drivers of biodiversity loss Conclusion: When the 1987 Brundtland Report, Our Common Future, celebrated the opportunities of bioprospecting, the idea was that the economic benefits from nature were substantial enough to fund the preservation of intact, biodiverse ecosystems. When we ask, ‘What’s changed?’ in the biodiversity market in the intervening decades, we see a flurry of activity but also that for-profit biodiversity restoration and conservation remains a tough sell. Few of the investments that this paper has examined hinge on the old proposition that preserving biodiversity is inherently profitable economic behaviour. Instead, we find that the definition of private biodiversity finance is widening, including actions that are at a remove from what we suspect many would consider to be biodiversity finance. For example, funds whose investments are principally indifferent to biodiversity impacts and primarily consider biodiversity insofar as it constitutes a financial risk have become nominally defined as biodiversity-related. Alongside these risk-based approaches, we see several investment categories that avoid the worst biodiversity harm or aim at improving supply chains, which tends to occupy a spectrum between biodiversity harm and benefits. Meanwhile, public money is still a source of demand for several biodiversity finance deals, and dedicated for-profit biodiversity investments remain difficult to implement at scale for private actors. These diverse approaches speak to very different material relations to biodiversity, especially where the geography of these flows concerned. Biodiversity finance is likely overestimated in terms of dollar values, often focused on the Global North, while weak monitoring and reporting standards provide little systematic knowledge related to finance’s impacts. We assert that one would be hard-pressed to conceptualize all these investment types as biodiversity finance, let alone global biodiversity finance, which would flow to where funding is most needed — namely to countries in the Global South. To conclude, policy-makers, multilateral negotiators, civil society, and researchers should be concerned with these limited geographical flows and murky standards and measurements. The risk is that large estimates of increased private finance, alongside an ever-present flurry of neologisms, categories, projects, and investment mechanisms, are creating an exaggerated perception of change, which we describe as animated suspension. This obscures alternative approaches, including efforts to have Global North countries contribute financial resources and counter the financial structures that drive ecologically harmful activities and constraint alternatives.
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