Global finance still fuels destruction despite urgent call for nature positive investment
- Editorial Team SDG15
- 2 days ago
- 4 min read
The 2026 State of Finance for Nature report by the United Nations Environment Programme (UNEP) delivers a blunt verdict on the world’s environmental finances. For every dollar invested in protecting ecosystems, thirty are still driving their degradation. This lopsided equation underscores an uncomfortable truth: global finance, in its current form, is undermining the very foundations of life on Earth.
According to UNEP’s analysis, 7.3 trillion US dollars flow annually into activities that damage nature, while only 220 billion US dollars support Nature-based Solutions (NbS). These include reforestation, wetland restoration, and sustainable farming — interventions proven to store carbon, stabilise water cycles, and strengthen community resilience. In contrast, the “nature-negative” side of the ledger remains dominated by fossil fuel extraction, industrial agriculture, urban sprawl, and resource-intensive manufacturing.
The imbalance is not only numerical but structural. Governments spend roughly 2.4 trillion US dollars per year on environmentally harmful subsidies — cheap fossil fuels, irrigation for unsustainable agriculture, and water or energy pricing that ignores ecological costs. These subsidies distort markets, reward depletion, and discourage private investors from backing restoration projects that yield slower but more sustainable returns.
How the imbalance persists
The architecture of global finance continues to privilege short-term profit over long-term planetary stability. Seventy per cent of destructive investments originate from the private sector, driven by shareholder expectations and fossil-dependent supply chains. Meanwhile, almost ninety per cent of conservation spending still depends on public sources, such as development banks, government budgets, and philanthropy.
As a result, global markets effectively treat ecosystems as expendable. Deforestation remains profitable because forests are not priced for their role in carbon storage or rainfall regulation. Intensive agriculture still attracts capital because degraded soils and water pollution are externalities — costs borne by communities, not investors.
UNEP’s “Nature Transition X-curve” concept offers a corrective. The model illustrates a double movement: phasing out environmentally harmful finance while exponentially scaling up nature-positive investment. To meet climate and biodiversity goals by 2030, annual investment in nature must grow 2.5 times to about 571 billion US dollars. Such a shift would not only protect natural capital but also reduce climate risks, improve food security, and enhance resilience against natural disasters.
The ecosystem of financial actors
Achieving that shift demands collaboration among public, private, and civil-society organisations, each influencing capital flows in distinct ways.
Public and development finance
· United Nations Environment Programme (UNEP), author of the report, convenes coalitions such as the Nature Finance Hub to mobilise investment and standardise monitoring.
· World Bank integrates natural capital accounting into national budgets and issues sustainability-linked loans.
· International Finance Corporation (IFC) defines global Performance Standards on biodiversity and ecosystem services, shaping private lending criteria.
· European Investment Bank (EIB) channels climate and biodiversity bonds into sustainable infrastructure.
· Global Environment Facility (GEF) funds large-scale restoration in developing economies, often leveraging private co-finance.
Private finance and alliances
· Glasgow Financial Alliance for Net Zero (GFANZ) unites major financial institutions under commitments to decarbonisation and now integrates nature risk metrics.
· Principles for Responsible Investment (PRI) encourages investors to engage companies on deforestation and biodiversity impacts.
· CDP collects corporate data on forests, water use, and supply-chain impacts for investors.
· Global Canopy, a UK-based organisation, maps financial links to deforestation and pressures banks to adopt “no-deforestation” policies.
Standards, disclosure, and corporate action
· Taskforce on Nature-related Financial Disclosures (TNFD) provides a global framework for firms to assess and disclose nature-related risks.
· Science Based Targets Network (SBTN) helps companies set measurable goals for nature alongside climate targets.
· International Sustainability Standards Board (ISSB) sets unified sustainability reporting standards now expanding to cover ecosystems.
· European Commission (EC) drives the EU Taxonomy and Corporate Sustainability Reporting Directive (CSRD), both of which integrate biodiversity and circular economy metrics.
Conservation and implementation
· International Union for Conservation of Nature (IUCN) maintains the Red List of threatened species and defines standards for Nature-based Solutions.
· The Nature Conservancy (TNC) structures debt-for-nature swaps and large-scale restoration projects.
· World Wide Fund for Nature (WWF) collaborates with industries on deforestation-free supply chains and river basin protection.
· Conservation International (CI) pioneers blue-carbon and community-led natural capital finance.
· Rainforest Alliance certifies agricultural commodities, linking smallholders to nature-positive markets.
Where the next breakthrough must occur
Experts argue that bridging the 30-to-1 gap requires a decisive realignment of financial policy, corporate reporting, and subsidy reform. Three pathways stand out:
1. Redirect subsidies: Phasing out harmful agricultural and fossil fuel subsidies and reallocating funds to soil regeneration, sustainable fisheries, and renewable energy would release trillions in green capital.
2. Mandate transparency: Full disclosure of nature-related risks under TNFD and CSRD frameworks would make environmental degradation a visible financial liability.
3. Scale blended finance: Combining public guarantees with private capital could de-risk investment in restoration projects, accelerating the adoption of high-integrity NbS.
Such measures would turn biodiversity and ecosystem services into recognised economic assets — a paradigm shift already gaining traction among progressive banks and asset managers. As UNEP notes, protecting nature is not a cost but a risk management strategy for the global economy.
The broader context
Failing to close the nature finance gap would have consequences beyond environmental loss. The collapse of pollinator populations threatens agricultural yields; deforestation intensifies floods and droughts; and the degradation of oceans undermines livelihoods for millions. Studies from the World Bank suggest that unchecked ecosystem decline could reduce global GDP by up to 2.7 per cent annually by 2030.
Conversely, investing in restoration could generate trillions in long-term value. UNEP estimates that every dollar invested in NbS yields at least four dollars in benefits, from carbon sequestration to improved water security and job creation. In low- and middle-income countries, these projects also advance fair sustainability, combining ecological resilience with economic inclusion.
Further reading and resources
Editor note: The nature finance gap defines the next frontier of global sustainability. If markets, banks, and governments collaborate to realign incentives, the shift from extraction to restoration could become the defining economic transformation of this century — a realignment where growth and nature no longer stand in opposition but move forward together.