In June 2024, UNEP FI reported that natural private finances had skyrocketed to US$100 billion, up 11 times compared to 2020 (US$9.4 billion). This year we look forward to the release of a new iteration of UNEP’s Financial Position Report for Nature. Furthermore, efforts under the United Nations Convention on Biological Diversity (CBD) are in the form of tracking the private finances of nature through new global reporting indicators. This will help align funds with the needs of the country’s National Biodiversity Strategy and Action Plan (NBSAP). Natacha Boric, Romie Goedicke Den Hertog, Ivo Mulder, Jessica Smith, Thomas Viegas and Alexander Wiese write about the latest developments in natural finance as outlined in the UNEP FI and partner webinars.New Green Shoots for 2025‘, gathered a panel of experts to highlight trends and innovations to watch out for 2025.
Increased momentum behind guaranteeing a positive transition in nature
While insurance losses from natural disasters (US$140 billion) continued to be mounted last year, there has been a growing awareness that the insurance sector plays a key role in unlocking private finance for nature. It is driven by the UNEP Fi PSI Working Group, consisting of approximately 40 insurers, reinsurers, brokers and other stakeholders. This has led to a growing understanding within the insurance sector of how companies can play their role in supporting the implementation of the Kunming Montorial Global Biodiversity Framework (GBF). This includes through their roles, through identifying and addressing nature-related issues across financial portfolios, such as their role as enablers of economic activity, underwriting and other such roles. In addition to roles as a risk manager and risk carrier, by addressing new natural-related risks and absorbing the financial shocks of building resilience for customers and communities. At the end of 2024, the PSI Working Group unveiled its first set of global guidance For the insurance sector regarding nature priorities.
Advances in technology already help to promote the development of new insurance products to manage nature-related risks. For example, Naturex Venture Studio develops parametric equipment to support the expansion of regenerative agriculture, and wildlife insurance products to encourage better forestry practices to reduce Amazon’s risk. As both the insurance sector and technology advancements develop further, there is an opportunity to utilize it to promote better data collection (remote sensing, EDNA) and analysis (through machine learning), which more effectively monitor and assess the state of nature and associated risk.
Use AI Advance for Nature Gathers Pace
Innovative applications of AI and technology are reconstructing the natural finance landscape more widely and rapidly. The Leon (utilizing Earth Observation for Natural Finance) project, funded by the University of Oxford-led European Space Agency, and 40 “early adoption” financial institutions, will use, for example, Earth Observation Data combined with AI to identify and lock new, more influential financial strategies for nature. By leveraging satellite imaging and advanced analytics, Leon allows for a more accurate understanding of natural values and risk factors, making it easier to attract investors. Similarly, companies like Cultivo use AI to streamline their investment in nature. Cultivo’s platform identifies high potential natural assets, calculates environmental values, and connects them with impact-driven capital. These advances make nature-based solutions more accessible, transparent and scalable. It also has a great drive in many ways to solve data challenges for financial institutions relating to nature, including the remarkable efforts by TNFD and the Biodiversity Foundation’s finances.
Taking risks through targeted public finance will gain more momentum
The importance of risk elimination mechanisms cannot be overstated in scaling natural finance at the required level. Organizations such as Development Finance Corporation (DFC) and International Finance Corporation (IFC) contribute in this field. IFC has provided guarantees that reduces risk for private investors, following biodiversity bonds launched by Global South UNEP FI member banks, including Bancolombia and BBVA Colombia, allowing for unprecedented levels of capital mobilization. US DFC is expected to continue providing delicacies support for debt swaps in a project market worth US$500 billion. This momentum has emerging de-lisking as a fundamental strategy to draw mainstream funds into projects that support natural positive results, particularly in emerging markets where debt relief and new capital are most needed. However, refinancing of sovereign debt countries should lead to increased funding for conservation in line with nature-related aspects of the National Biodiversity Action Plan (NBSAP) and the National Climate Program (NCDS), whilst lowering the overall debt and reducing debt protection costs. The green bond market continues to increase its share of nature-related projects, with biodiversity increasing by just 5% of equipment issued in 2020, up to 16% in 2023, with over USD 400 billion for all green bonds referring to at least one nature-related theme.
Indigenous leadership – where there is will,
Indigenous leadership is recognized as increasingly essential to advance fair and influential natural funding. Initiatives such as the Savimbo Biodiversity Credit Project in the Putumayo region of the Amazon in Colombia, demonstrate this development. Leaded by Indigenous communities, Savimbo offers biodiversity credits related to sustainable land management practices, ensuring both economic benefits and cultural conservation. Beyond these projects, organizations like Nia Terro and major Indigenous groups advocate for greater access to fundraising by Indigenous communities. Their leadership goes beyond advocacy focused on embedding Indigenous rights and knowledge systems into financial mechanisms. These initiatives set a strong example for others to follow, yet the number of transactions still does not coincide with the prescribed ambitions of greater Indigenous inclusion in such projects. The recent Cali Fund will guide industry donations from Digital Sequence Information (DSI) to support Steward Nature. Furthermore, the new permanent institution under Article 8(J) will enhance Indigenous people’s participation in biodiversity decision-making. Listen to UNEP fi Webinar This gave UNEP FI members the opportunity to hear from Indigenous leaders.
Funding for the Undamaged Nature – Nested Jurisdiction Redd+ enters the spotlight
I agree that most of this space will need to fund conservation prior to restoration. This is because it is more cost-effective and existing tropical forests generally have more biological diversity than the recovery process. Defended by the Brazilian government, The Tropical Forest Forever Facility (TFFF) is an ambitious initiative designed to promote large-scale funding for the protection and recovery of tropical forests. It operates by coordinating public, private and charity capital to create long-term funding mechanisms for unharmed forest ecosystems. TFFF is unique in its approach, combining conservation financial tools such as biodiversity credits and forest conservation bonds with direct partnerships with local and indigenous communities. In Cali’s COP16, TFFF was highlighted on the potential to simultaneously address the equity and inclusion of forest-dependent communities, while also providing scalable solutions to stop deforestation.
Stakeholders heading for UNFCCC COP30 in Belem are looking for financial solutions to halt lost forests, particularly in the Amazon and the Congo Basin. With the aim of raising US$1.5 billion in 10 months, backed by Geneva-based traders, the recently launched race initiative has attracted global attention as the fastest fundraiser for nature in history. Using nested jurisdictional redd+ (reducing emissions from deforestation and forest degradation), the initiative coincides financial incentives with Amazon’s massive forest conservation. This approach illustrates the potential for scalable and impactful solutions that simultaneously address climate change and biodiversity losses. With billions of dollars already committed, it sets a high benchmark for future fundraising campaigns.
The wealthy are moving forward in creative ways
A notable trend is the increased involvement of ultra-high-means (Uhnwis) and family offices in natural finance. The Nature 2 Campaign-Linked Fund aims to allocate US$1 billion by Belem and 2% of its managed assets to natural positive investments through commitments from UHNW individuals and institutions. As governments pay attention to committing funds, individual and family offices are stepping in to fill the gap. Lukas Walton (Walmart Family) supports Builders Vision and recently launched a groundbreaking US$70 million guarantee mechanism for Indonesia’s debt conversion, lifting natural positive investments, paving the way for other private stakeholders to step up. This shift highlights the growing awareness among private wealth managers of the risks posed by biodiversity losses and opportunities available to invest in natural positive solutions. The family office also believes it is responsible for doing more as the government’s ambitions for nature are waning.
Expanding the footprint of private equity and venture capital
Private equity and venture capital continue to expand their involvement in nature-centric solutions. For example, SuperOrganism is currently investing in 15 portfolio companies dedicated to biodiversity recovery and ecosystem services. These include innovative startups in areas such as regenerative agriculture, carbon markets and ecosystem surveillance technology. Other examples include Astanol, which focuses on transforming the food system, and leaders at Natural Investment Space Mirova. Milova has launched a private equity platform that covers five major environmental themes: smart cities, clean energy, natural resources, circular economy and agricultural agrotechnology. This trend reflects mature markets where investors are increasingly comfortable navigating the complexity of nature-based solutions, spurred by better data and clearer returns on investment.
What’s next for natural finance?
These developments highlight the growth of dynamism and innovation in natural finance, as well as significant advances in just four years of these market reviews. Keep building momentum and make sure 2025 is a year of meaningful progress in aligning private financial flows with global natural goals. Learn more about UNEP Fi’s natural work here.
Webinar It was held in collaboration with Principles of Responsible Investment, the EU Environmental and Climate Business and Biodiversity Platform, and the Biodiversity Foundation funding.
Please check 20242023, and 2022 A webinar recording for insight into your journey so far.
