Bridging the Biodiversity Finance Gap: Green Finance as a Catalyst for Global Sustainable Development
By Deborah Lehr | As featured on Yicai Global
June 18, 2025
A snow leopard, one of the native species to China currently at risk of extinction (Unsplash, Robert Sachowski)
The global community stands at a critical juncture where the loss of biodiversity is not only an environmental concern but a profound economic and developmental challenge. Biodiversity underpins ecosystem services that are vital for human survival, including food security, disease regulation, and climate stability. Yet, the loss of biodiversity, driven by perverse subsidies, bad policy, and climate change, continues at an alarming rate.
The Biodiversity Imperative
The decline in pollinators, for instance, threatens global food production, as approximately 75% of the world's crops depend on pollination. A loss of biodiversity erodes soil health, reduces water quality, and destabilizes local climates, all of which are vital for human development and economic resilience.
Moreover, the disruption of natural ecosystems increases the risk of zoonotic disease transmission. These outbreaks are often directly tied to environmental degradation, deforestation, and illegal wildlife trade, consequences of biodiversity collapse.
At the same time, we face a growing paradox. Climate change mitigation—essential for planetary survival—can sometimes exacerbate biodiversity loss if not carefully managed. The rapid expansion of renewable energy infrastructure, such as wind farms and solar parks, may unintentionally destroy migratory bird corridors or fragile desert and marine ecosystems if biodiversity safeguards are overlooked. As such, aligning climate and biodiversity goals is no longer optional but essential.
What is needed is a comprehensive global effort that elevates biodiversity protection to the same level of urgency and strategic importance as decarbonization. That requires not only policy alignment but also financial innovation, institutional coordination, and private sector engagement.
Global Recognition and
Policy Developments
There is a growing political acknowledgment of biodiversity’s role in global stability. For the first time in recent years, biodiversity has appeared in G20 communiqués, and global leaders are beginning to recognize that economic systems are fundamentally dependent on natural capital. Regulatory initiatives such as the Taskforce on Nature-related Financial Disclosures (TNFD) aim to provide companies and investors with a framework to assess and disclose nature-related risks and dependencies. This complements other frameworks such as the Global Biodiversity Framework under the UN Convention on Biological Diversity, which sets targets—such as conserving 30% of the planet by 2030.
However, while the policy landscape is evolving, implementation remains slow, fragmented, and underfunded. Political will must be matched by tangible action and capital mobilization at scale.
Innovative Financial Mechanisms and Regional Initiatives
Encouragingly, a number of innovative financial instruments and regional leadership efforts are beginning to emerge
The World Bank’s Wildlife Conservation Bond, or “Rhino Bond,” is one of the first financial instruments to directly link investor returns to measurable conservation outcomes—in this case, black rhino populations in South Africa. Structured as a $150 million impact bond, it demonstrates the potential of results-based conservation finance.
In Latin America, Brazil is leading the effort to develop the Tropical Forest Forever Facility (TFFF), a proposed $125 billion fund to provide long-term financial incentives to rainforest nations that keep deforestation levels low. If successful, this facility could reshape tropical forest protection by embedding it in sovereign financing mechanisms. And it could serve as a financing model across other pressing nature-related challenges.
The Middle East, often overlooked in discussions of biodiversity, is emerging as a region to watch. Saudi Arabia is restoring its desert ecosystems and reintroducing over 7,000 animals—including Arabian oryx, mountain gazelles, and Nubian ibex—into protected areas. Its National Center for Wildlife has become a leading force in regional conservation. Meanwhile, the UAE is protecting vital mangrove forests and marine zones, aligning biodiversity with its broader clean energy and sustainable development agenda. Notably, an Emirati woman now leads the IUCN, signaling the region's commitment to global conservation leadership.
These initiatives are being matched by increasing engagement in climate diplomacy: Egypt hosted COP27, the UAE hosted COP28, and Saudi Arabia will host UNCCD COP16 on desertification, with an Egyptian woman serving as its Executive Secretary. The momentum is real, and regional alignment on biodiversity is strengthening.
China's Leadership in Biodiversity Finance
China, as one of the world’s most biodiverse nations, has also demonstrated increasing commitment. In 2022, the Bank of China issued the world’s first biodiversity-themed green bond, raising RMB 1.8 billion to finance nature-positive infrastructure and restoration projects. The country’s National Biodiversity Strategy and Action Plan includes the “30 by 30” target and large-scale ecosystem protection zones.
China’s success in promoting green behavior at scale through digital tools like Ant Forest—which has led to the planting of over 475 million trees—is another example of how public-private cooperation can advance biodiversity goals. By gamifying conservation behaviors, platforms like Ant Forest are creating a new class of citizen climate action rooted in technology and community.
Despite promising efforts, the gap between rhetoric and results remains wide. According to the Paulson Institute’s “Financing Nature” report, the world faces an estimated $700 billion annual biodiversity financing gap. That may sound like a staggering sum—but it is less than global annual spending on carbonated beverages.
Reform Harmful Subsidies: Subsidy reform represents the single biggest opportunity to close the funding gap. Nearly US$542 billion is spent each year on agricultural, fisheries, and forestry subsidies that are harmful to nature. Redirecting those payments, especially those considered most harmful to biodiversity, to incentivize more sustainable practices would benefit nature while also mitigating climate change and improving food security.
Scale public and private investment in biodiversity through grants, blended finance, and sovereign guarantees.
Develop market-based mechanisms like biodiversity credits and green bonds that link capital to conservation outcomes.
Enhance regulatory frameworks to require nature risk disclosures and incentivize companies to embed biodiversity into risk planning.
Promote global collaboration to pool knowledge, technologies, and capital across borders, particularly to support high-biodiversity countries in the Global South.
Conclusion
The loss of biodiversity is an escalating crisis. It is a crisis that cannot be solved by one country, nor does it respect geographic boundaries. It threatens not only species but also economies, health systems, and planetary resilience. Yet with risk comes opportunity. Nature finance can be the bridge between economic development and environmental integrity. It can catalyze a new era in which safeguarding nature becomes an engine of prosperity.
China —through innovative instruments, regulatory planning, and public engagement—can help define what a nature-positive economy looks like. By working together, public and private actors can transform biodiversity from an afterthought into a strategic pillar of global sustainable development.
As we reimagine the relationship between finance and nature, let us act with the urgency the planet demands—and with the clarity that protecting biodiversity is not a luxury, but a necessity.