Financing Nature-Based Solutions in the UK

We all know that nature is the ultimate cornerstone of life, offering the resources and systems that sustain every aspect of our ability to live on this planet. Yet, nature has continued to be exploited at an alarming rate since the Industrial Revolution, plunging our planet into one of the most severe extinction crises in history. The degradation of biodiversity, which has reduced by over 50% in the UK since the industrial revolution, jeopardises our food and water security, economic stability, public health, and climate resilience. Most critically, these impacts disproportionately affect the poorest and most vulnerable people in our community.

We must act now to halt and reverse biodiversity loss, to ensure a sustainable and equitable future for generations to come.

‘Nature-based Solutions’ are emerging as strategic answers to combatting climate change and biodiversity loss. Unfortunately, despite their immense potential, NbS projects remain critically underfunded. The global financing gap exceeds an eye-watering $700 billion annually with this trend also echoed in the UK. Private funding must play a more significant role, too. 

In 2022, the Department for Environment, Food & Rural Affairs published a policy paper highlighting what could be done both nationally and internationally to plug the finance gap. The paper describes the role of developed countries, all other countries, the private sector, international financial institutions, and partnership building. 

Funding from Developed Countries 

Global leaders must step up and support biodiversity efforts with increased, timely, and predictable funding. Developing countries are advancing their National Biodiversity Strategies and Action Plans (NBSAPs), but they need financial backing from developed nations and other entities to succeed. The funding should match the ambitious targets of the Global Biodiversity Framework (GBF) and align with commitments made at major global forums like the 2021 One Planet Summit and COP15.  

An emerging strategy involves integrating biodiversity and climate finance. Many donor countries are directing a portion of their climate funds toward nature-based solutions, which can significantly aid in achieving the goals of the Paris Agreement while supporting biodiversity. These solutions, from restoring forests to protecting wetlands, offer dual benefits for climate mitigation and biodiversity conservation. However, biodiversity needs extend beyond climate finance, requiring complementary and dedicated funding streams.  

Transparency and accountability are essential. Donors must clearly track and report biodiversity and climate-related funding, following international standards like the OECD DAC Rio markers. By aligning climate and biodiversity investments, the global community can tackle these interconnected challenges more effectively, ensuring a thriving planet for future generations. It’s time to turn promises into impactful action.  

Supporting All Countries

Harmful subsidies pose a major threat to biodiversity, exacerbating environmental pressures and inflating the costs of conservation and restoration. By reforming these subsidies, we can reduce the biodiversity finance gap while encouraging sustainable practices.  

Governments are committing to reviewing and redirecting national subsidies that harm biodiversity while boosting nature-positive incentives. This transition requires strong international collaboration. Organisations like Multilateral Development Banks, UNDP, and OECD are called upon to provide essential technical and policy support for achieving these goals.  

Domestically, financial tools like fiscal policies tied to natural capital accounting, green infrastructure investments, and carbon markets can mobilise biodiversity finance. Payment for ecosystem services and green financial products will further incentivise private sector contributions.  

A holistic, government-wide approach is critical to developing National Biodiversity Finance Plans aligned with National Biodiversity Strategies and Action Plans (NBSAPs). This ensures recipient countries can access and optimise international biodiversity funding streams.

The role of the Private Sector 

Governments and regional organisations are teaming up with the private sector to steer financial flows toward nature-positive outcomes. The goal? Transform economies to be resilient, climate-neutral, and less polluting while boosting biodiversity.  

Private finance plays a pivotal role in this shift. Businesses are urged to assess and disclose their nature-related risks, dependencies, and impacts while setting measurable targets to minimise harm and amplify positive effects. Policymakers are committed to creating an enabling environment, aligning financial systems with biodiversity goals, and integrating efforts to combat biodiversity loss, climate change, and pollution.  

Philanthropic contributions, grassroots organisations, and major institutions are vital in fostering innovation and implementing the Kunming-Montreal Global Biodiversity Framework. By collaborating across sectors, this global effort aims to drive transformative solutions for a sustainable future where people and nature thrive together.  

The role of International Financial Institutions 

Multilateral development banks (MDBs) and international financial institutions (IFIs) are stepping up their commitment to biodiversity. However, biodiversity finance lags significantly behind climate finance. MDBs are urged to pledge concrete biodiversity funding and align portfolios with the Kunming-Montreal Global Biodiversity Framework, mirroring their commitments to the Paris Agreement.  

Partnerships for Biodiversity 

Collaboration across all sectors and levels of society, including Indigenous Peoples, local communities, women, youth, and persons with disabilities, is key to advancing the Kunming-Montreal Global Biodiversity Framework. Priorities include providing technical assistance and capacity building for developing countries, updating and implementing National Biodiversity Strategies and Action Plans (NBSAPs) and Biodiversity Finance Plans, and assessing harmful subsidies. Efforts also focus on improving access to financial resources from bilateral and multilateral sources and fostering knowledge sharing and best practices to achieve biodiversity goals and targets.

Nature is vital to life, but biodiversity loss is accelerating, threatening food security, health, and the planet’s stability. Nature-based Solutions (NbS) offer key strategies to combat climate change and protect biodiversity, yet they are severely underfunded, with a global financing gap exceeding $700 billion annually. Developed countries must increase support for biodiversity efforts, aligning funding with global goals like the Paris Agreement. Governments, the private sector, and international financial institutions must collaborate to reduce harmful subsidies, mobilize private finance, and integrate nature-positive investments. A global partnership, including Indigenous and local communities, is essential to achieving biodiversity targets and securing a sustainable future.

Join us at Green Finance UK – 6th February 2025 – Sheffield 

We’re excited to host the inaugural Green Finance UK Conference, a nationally focused one-day event dedicated to connecting leaders from across the public and private sector, driving forward the green economy and raising awareness of green finance options for businesses. Biodiversity finance will be a key topic at the conference. 

Focused on supercharging the Green Economy in the UK, this event is organised by The Sustainability Community, a leading community of over 12,000+ sustainability professionals. 

The conference will bring together over 150+ leaders in business and finance, local and national policymakers, investors, and sustainability professionals to grow your network, learn from panels of experts, and discuss the role of finance in driving the green transition. 

You can find out more and purchase tickets here.

If you’d like to explore partnership opportunities for this conference including exhibiting, workshops, and more, information can be found here.