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Title page 1

Contents 6

Foreword 4

Acknowledgements 5

Executive summary 8

1. Mobilising finance for biodiversity: Synthesis and key messages 10

1.1. The biodiversity challenge 11

1.2. The financing challenge 11

1.3. Scope and purpose of this report 12

1.4. Key messages and good practice recommendations 12

1.4.1. Key messages 12

1.4.2. Recommendations and policy options 13

References 18

2. The biodiversity finance landscape and policy context 19

2.1. The biodiversity crisis and the urgency of action 20

2.2. Finance as a central lever for biodiversity outcomes 20

2.3. The international policy response and finance commitments 21

2.4. The biodiversity finance shortfall and misaligned flows 23

2.5. Mobilising and aligning finance: a dual challenge 24

2.6. Actors, their roles and motivations in biodiversity finance 24

2.6.1. Real economy 24

2.6.2. Financial sector 25

2.6.3. Enabling actors 25

2.6.4. Complementary but distinct roles 26

References 28

3. Biodiversity finance instruments and mechanisms 30

3.1. Real economy instruments and mechanisms - biodiversity-positive incentives and nature markets 33

3.1.1. Taxes and fees 33

3.1.2. Payments for ecosystem services and subsidies 40

3.1.3. Biodiversity offsets 46

3.1.4. Nature-based carbon credits 50

3.1.5. Biodiversity credits for voluntary contributions or insetting 53

3.2. Financial sector instruments and mechanisms 57

3.2.1. Debt: biodiversity bonds and loans 57

3.2.2. Equity and investment funds with a biodiversity focus 74

3.2.3. Risk transfer and insurance mechanisms 81

References 87

Notes 106

4. From instruments to systems: Enabling conditions and scaling pathways 108

4.1. Complementarity of biodiversity finance instruments 109

4.2. Building and financing a pipeline of bankable projects for biodiversity 110

4.2.1. Designing impactful, revenue generating projects 111

4.2.2. Financing models to enable scale 114

4.3. Enabling conditions for biodiversity finance 119

4.3.1. Data, metrics and measurability 119

4.3.2. Policy, regulatory and governance frameworks for mobilising biodiversity finance 123

References 128

Notes 134

Tables 7

Table 1.1. Key instruments and mechanisms to mobilise public and private finance for biodiversity 16

Table 2.1. Selected examples of KMGBF Target 19 related commitments in updated NBSAPs 23

Table 2.2. Typical financial return expectation per actor 27

Table 3.1. Instruments used to mobilise biodiversity finance 31

Table 3.2. Comparative analysis of debt instruments for biodiversity 72

Table 4.1. Public interventions that may contribute to mobilisation or alignment of finance for biodiversity 124

Figures 7

Figure 2.1. The landscape of actors in biodiversity finance 26

Figure 4.1. Cascade approach adapted to biodiversity finance 116

Figure 4.2. The capital continuum 119

Boxes 21

Box 2.1. Finance-related targets in the Kunming-Montreal Global Biodiversity Framework 21

Box 3.1. The Danish pesticides tax 35

Box 3.2. Examples of protected area and tourist fees, revenue and allocation 36

Box 3.3. Examples of carbon taxes earmarked for biodiversity objectives 38

Box 3.4. Financing modalities of several large PES programmes 41

Box 3.5. Identifying and reforming subsidies harmful to biodiversity 44

Box 3.6. Conservation easements 45

Box 3.7. Luxembourg Eco-points System 48

Box 3.8. The Conservation Exchange (CX) pilot in Canada 56

Box 3.9. Guidance and standards for labelled bonds 58

Box 3.10. Sovereign and supranational biodiversity-related UoP bonds 60

Box 3.11. Corporate use-of-proceeds bonds for biodiversity and broader nature themes 61

Box 3.12. Understanding estimates of biodiversity finance deployed through bonds 62

Box 3.13. KPIs for biodiversity in SLBs 63

Box 3.14. Sustainability-linked bonds incorporating biodiversity-related KPIs 65

Box 3.15. Environmental impact bonds and outcome-based instruments - examples 67

Box 3.16. Alternative bond mechanisms - case studies 68

Box 3.17. Examples of biodiversity-related lending and private credit: Spanning corporate lending, asset-backed finance and project-level investments 70

Box 3.18. Stewardship for nature outcomes - EOS at Federated Hermes Limited case study 76

Box 3.19. Publicly listed biodiversity funds and exchange traded funds (ETFs): Selected examples 77

Box 3.20. Natural capital and impact investment funds 79

Box 3.21. Private equity markets and biodiversity effects 80

Box 3.22. Examples of parametric insurance for biodiversity 85

Box 4.1. Future-flows securitisation of protected area revenues in Costa Rica 110

Box 4.2. Commonland's landscape-scale approach 113

Box 4.3. Blended finance structures for biodiversity: selected case studies 115

Box 4.4. Pooled finance and aggregation approaches in practice 118

Box 4.5. Examples of data and metrics in financial sector instruments 121

Box 4.6. Data availability on finance across selected instruments 122

Box 4.7. Luxembourg Green Exchange 127