2025: A Landmark Year for Nature-Positive Finance
With the World Economic Forum (WEF) identifying 2025 as a key year, the focus on nature-positive finance is more pronounced than ever.
This evolution is driven by the urgent need to address the economic risks associated with biodiversity loss and the emerging opportunities for the financial sector to spearhead sustainable practices.
2024 was marked by several landmark moments in climate finance, including Iberdrola's continued investments in sustainable R&D, CaixaBank's impressive roadmap and DP World's blue bonds in the Middle East.
Global Biodiversity Framework Sets the Stage
In December 2022, a landmark agreement was formalised as 196 countries adopted the Global Biodiversity Framework (GBF).
This framework sets ambitious targets including the protection of 30% of our planet’s land and oceans, aligning financial flows with biodiversity-friendly practices, and cutting harmful subsidies by a staggering US$500bn annually.
- 1. There is a growing consensus around global and sectoral pathways that can lead us to nature positivity by 2030
- 2. Having invested in sustainable teams, resources and initiatives since the Paris Agreement in 2015, many institutions are more capable and experienced in sustainability than ever before
- 3. High-quality data and disclosures relating to nature are increasingly available, with AI and data sharing programmes contributing to a more healthy and helpful data ecosystem globally.
For financial sectors, this framework delivers a clear directive towards embracing and implementing nature-positive strategies.
The rallying call has been heeded by over 194 institutions that have committed to the Finance for Biodiversity Pledge.
These financial entities now align their operations with the biodiversity goals, yet they confront the daunting potential of industry impacts—spanning from agriculture to fossil fuels—that could cost the global economy between US$10tn and US$25tn annually if not addressed.
Aurora Matteini, a Specialist in Sustainable Finance at the WEF, sums up the urgency: "Nature-related risks and opportunities are increasingly material to the financial sector, making this the critical moment to accelerate action and safeguard our planet’s biodiversity."
This sense of urgency was palpable at this year's WEF’s Annual Meeting in Davos, where the natural world was a priority on the agenda.
Leveraging Existing Frameworks for New Challenges
Since the Paris Agreement, financial institutions have invested heavily in climate-related expertise that can be leveraged to tackle biodiversity challenges. Individuals like Laura Fisher, the WEF’s Lead for Sector Transitions to Nature Positive, advocate for this strategic approach.
Major financial players including HSBC and Standard Chartered have set deforestation policies and commitments to circular economy practices as part of their wider sustainability agendas, laying groundwork that could be adapted for biodiversity-centric goals.
The integration of nature-friendly practices into sectors heavily linked to biodiversity challenges—such as mining, automotive, and ports—is already underway. These guidelines serve double duty, mitigating risks and catalysing new opportunities for business innovation.
Emerging Tools and Technologies Enhance Data Driven Actions
The lack of robust and actionable data has historically been a significant barrier in tackling nature-based challenges. However, 2025 marks a pivotal year as advancements in data collection and corporate disclosures aim to arm financial institutions with better tools to gauge and manage nature-related risks accurately.
Improved data availability is eliminating excuses for inaction, enabling financial institutions to take decisive steps towards achieving global biodiversity goals.
The planned enhancements are in line with regulations like the EU’s Corporate Sustainability Reporting Directive (CSRD) and are bolstered by efforts from the Taskforce on Nature-related Financial Disclosures (TNFD).
These measures strive to create a more consistent and transparent reporting landscape across industries.
With improved data, financial institutions are increasingly positioned to invest in nature-positive ventures, recognising the potential to drive significant economic value while contributing to global sustainability goals.
The Economic Incentive for Sustainability
The potential economic benefits of aligning business models with biodiversity objectives are immense, projected to unlock US$10.1tn in annual business opportunities by 2030. Renewable energy, sustainable agriculture, and eco-tourism are among the sectors projected to benefit the most.
The burgeoning interest in biodiversity-focused financial products like biodiversity-linked bonds and innovative funding structures highlight the shifting landscape of investment towards more sustainable and resilient practices.
For industries like manufacturing, adopting nature-positive practices not only promises cost reductions but also enhances operational resilience against environmental disruptions in supply chains.
Aurora from the WEF adds: "The financial sector has an unprecedented opportunity to lead in addressing biodiversity loss, unlocking sustainable growth and protecting our shared future."
Looking Ahead to 2030
As we edge closer to the 2030 targets set by the GBF, 2025 stands as a crucial juncture. The frameworks, tools, and consensus required for a significant shift are established—the challenge now is to maintain momentum and convert potential into action.
This is a critical moment not just for financial institutions but for all stakeholders, including policymakers and industrial sectors, who must come together to safeguard the natural systems that underpin the global economy.
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