Biodiversity, the missing link in sustainability. Natural capital, Investments, Biodiversity, Sustainable solutions.

Without fundamental change in global finance, achieving environmental goals will remain out of reach

Natural capital is largely free, which necessarily leads us to reflect on how we are treating our biodiversity. This issue has been raised and should be addressed at the 2024 UN Biodiversity Conference.

The latest State of Financing for Nature report , launched at COP28 by the United Nations Environment Programme (UNEP), highlights an alarming imbalance in global financial flows. Each year, around US$7 trillion is invested in activities that directly harm nature, a figure that represents around 7% of global GDP.

In contrast, investments in nature-based solutions in 2022 totaled just $200 billion—a fraction of the colossal amount channeled into nature-damaging activities. This disparity underscores the urgent need to address the interconnected crises of climate change, biodiversity loss, and land degradation.

The report’s analysis of global financial flows reveals that private sector investment in nature-damaging activities such as deforestation and habitat destruction amounts to approximately US$5 trillion annually, clearly higher than the US$35 billion of private investment in nature-based solutions.

The construction, electric utilities, real estate, oil and gas, food and tobacco sectors are the main contributors to these destructive financial flows. These five sectors, which make up 16% of total investment in the economy, account for 43% of the financial flows that negatively impact nature, leading to the degradation of forests, wetlands and other critical ecosystems.

Opportunities are also highlighted in the report. In 2022, governments led the way in financing nature-based solutions, contributing $165 billion, or 82% of the total. However, private finance remains modest, accounting for just $35 billion, or 18%, of total nature-focused finance flows.

To achieve international climate and biodiversity targets, such as limiting global warming to 1.5°C and conserving 30% of land and sea by 2030, investment in nature-based solutions must nearly triple from $200 billion today to $542 billion per year by 2030. By 2050, this figure needs to quadruple to $737 billion per year.

Public finance alone will not be enough. A significant increase in private investment is essential, which has the potential to grow from the current 18% of nature-focused finance to 33% by 2050. In parallel, the nearly $7 trillion currently invested in nature-damaging practices needs to be drastically reduced and, ideally, redirected towards sustainable practices that support, rather than degrade, the environment.

The report’s findings make clear that without a fundamental shift in how global finance is allocated—away from destructive practices and toward preserving and restoring nature—achieving critical environmental goals will remain out of reach.

All of this makes it seem like we are far from achieving any kind of structurally positive solution for Mother Nature. At some point, she will find a way to get rid of us, one way or another.

Natural capital, Investments, Biodiversity, Sustainable solutions.