Why smart capital is moving to biodiversity
Biodiversity is fast becoming a material consideration in global capital markets. Once seen as a peripheral environmental issue, the degradation of ecosystems is now widely recognised as a financial risk — and a compelling investment opportunity. With policy, science, and finance increasingly aligned, new biodiversity markets are forming, and institutional capital is beginning to follow.
This article explores what’s driving the shift — from evolving global policy and growing financial materiality to the structure of emerging nature markets - and why now is the time to invest.
Nature is becoming financially material
Nature-related risks are now being recognised as financially material across a growing range of sectors. According to the World Economic Forum, more than half of global GDP - around US$44 trillion - is moderately or highly dependent on nature. Risks include:
Physical risk: Disruption of ecosystem services (like pollination or water regulation) can directly impact supply chains, especially in agriculture, consumer goods, and infrastructure.
Regulatory risk: Frameworks like the EU’s Corporate Sustainability Reporting Directive (CSRD) now require companies to disclose nature-related financial risks.
Reputational risk: Investors, regulators, and consumers are holding companies to higher environmental standards — and the focus is expanding beyond carbon alone.
To support consistent, comparable reporting, the Taskforce on Nature-related Financial Disclosures (TNFD) released its final recommendations in 2023. This global framework is already guiding more than 500 organisations as they begin to integrate nature-related risk into financial and corporate decision-making.
The Kunming-Montreal Framework: Global policy alignment on biodiversity
In December 2022, nearly 200 nations adopted the Kunming-Montreal Global Biodiversity Framework - a landmark agreement sometimes described as the biodiversity equivalent of the Paris Climate Agreement.
The framework establishes 23 targets to halt and reverse biodiversity loss by 2030, including:
Conserving 30% of the world’s terrestrial and marine areas
Restoring 30% of degraded ecosystems
Reducing harmful subsidies by at least $500 billion per year
Mobilising $200 billion per year in biodiversity-related funding
This agreement marks a decisive shift: biodiversity loss is no longer only an ecological emergency, it's also an economic and financial objective for signatory countries. And it’s already beginning to shape national policy, corporate reporting, and capital allocation.
A growing market with significant investment potential
To meet global biodiversity and climate goals, the UN Environment Programme estimates that annual investment in nature-based solutions must almost triple, from current levels (US$200 billion) to reach US$542 billion per year by 2030.
This investment gap signals a major opportunity, with some markets already established, and others rapidly emerging in areas such as:
Compliance and voluntary biodiversity credits
Nature-based carbon projects with co-benefits
Biodiversity Net Gain (BNG) compliance markets
Green bonds and debt-for-nature swaps
In the United Kingdom, for example, statutory BNG requirements have attracted £324 million in private investment as of July 2025. Habitat banks are projected to generate over 41,000 BNG units by 2030 and more than 91,000 units by 2035, which can be translated into a market value of approximately £3 billion by 2035.
NSW, Australia also has a well-established biodiversity market which has had an annual average turnover of AU$200m over the past two years.
Signals of capital movement: Recent transactions
Several recent transactions show that biodiversity is already gaining traction in capital markets:
The Bahamas’ US$300 million debt-for-nature swap
In 2024, The Bahamas refinanced US$300 million in debt, unlocking over US$120 million in new cash funding for marine conservation over 15 years. The deal, which was executed by The Nature Conservancy, with participation from AXA XL and Builders Vision, marks the first time that private investors and insurers have taken a central role in a sovereign debt-for-nature transaction.
CAF’s €100 million Blue Bond for coastal resilience
In 2025, CAF - Development Bank of Latin America and the Caribbean (rated Aa3/AA/AA- (pos/stable/stable)), issued its inaugural €100 million 5-year Blue LAC Bond (due June 11, 2030, with a 2.975% p.a. coupon rate) to finance sustainable coastal and marine projects across Latin America and the Caribbean. BNP Paribas structured and arranged this transaction, with its insurance subsidiary, BNP Paribas Cardif, as the sole investor. As the technical advisor, UNDP (United Nations Development Programme) will provide guidance to ensure that the funds generated from the bond sale will contribute to financing eligible projects related to ecosystem restoration and climate-resilient infrastructure, as part of CAF’s expanded $2.5 billion ocean investment commitment by 2030.
Parallels and distinctions: Biodiversity markets vs. carbon markets
Biodiversity markets are often compared to carbon markets, particularly in their early stages and whilst there are parallels, there are also important differences.
Carbon markets
Unit of measure: Tonnes of CO₂ equivalent
Standardisation: High (Verra, Gold Standard)
Maturity: Advanced (voluntary + compliance)
Risk factors: Permanence, leakage
Biodiversity markets
Unit of measure: Site-specific metrics (species, habitat, ecosystems)
Standarisation: Emerging (no dominant verification protocol yet)
Maturity: Early-stage, fragmented
Risk factors: Measurement complexity, site variability, permanence, leakage
Biodiversity’s complexity can make standardisation challenging - but that also creates opportunity. Early investors have a chance to help shape the market, develop high-integrity protocols, and influence how value is defined.
Why now?
The next 12 months represent a rare window for institutional investors to act early and strategically. The advantages of early participation include:
Pre-regulatory positioning: Early participation enables investors to help shape policy and standard-setting.
High growth phase advantage: Demand is growing faster than supply — and credible projects are still limited.
Greenwash-resistant positioning: High-integrity, measurable investments in nature offer a way to lead rather than follow in sustainable finance.
In short: the biodiversity market is forming, but not yet crowded. Early movers can capture value and influence the foundations of a new asset class.
Skjander’s approach
At Skjander, we invest in biodiversity outcomes backed by scientific rigour and measurable impact. Our fund channels capital into high-quality nature-based projects that are aligned with emerging regulation, grounded in ecological integrity, and built for long-term value creation.
We work with wholesale investors looking for nature-positive exposure, and with corporate partners preparing for a world where biodiversity is a material risk, and a strategic opportunity.
Our view is simple: biodiversity isn’t a side issue. It’s central to global economic stability. Aligning capital with nature is no longer optional, it’s essential.
References
World Economic Forum. (2020). Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy.
https://www3.weforum.org/docs/WEF_New_Nature_Economy_Report_2020.pdfNetwork for Greening the Financial System (NGFS). (2022). Central Banking and Supervision in the Biosphere: An Agenda for Action on Nature-related Risks.
https://www.ngfs.net/system/files/import/ngfs/medias/documents/central_banking_and_supervision_in_the_biosphere.pdfEuropean Commission. (2022). Corporate Sustainability Reporting Directive (CSRD).
https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_enTNFD. (2023). Final Recommendations of the Taskforce on Nature-related Financial Disclosures.
https://tnfd.global/recommendationsTNFD. (2024). TNFD Early Adopters Update – Over 2,000 organizations on board.
https://tnfd.global/adoptionConvention on Biological Diversity. (2022). Kunming-Montreal Global Biodiversity Framework.
https://www.cbd.int/doc/decisions/cop-15/cop-15-dec-04-en.pdfUNEP (2023).Global annual finance flows of $7 trillion fueling climate, biodiversity, and land degradation crises.
https://www.unep.org/news-and-stories/press-release/global-annual-finance-flows-7-trillion-fueling-climate-biodiversityBiodiversity units UK. (2025). Revealed: The BNG INdustry Report July 2025. https://biodiversity-units.uk/news-insights/revealed-the-bng-industry-report-july-2025
NSW BIodiversity Market Government Data Portal. https://app.powerbi.com/view?r=eyJrIjoiZWI3MmZhMTctZGVjNi00ZTdlLTkwZTEtOGY4NWNhYjc3M2RiIiwidCI6Ijk2ZWY4ODIxLTJhMzktNDcxYy1iODlhLTY3YjA4MzNkZDNiOSJ9
Associated Press. (2023). The Bahamas will refinance part of its debt to protect its famous turquoise waters.
https://apnews.com/article/ed89e57b81133d5790163f798f64dc1bUnited Nations Development Programme. (2025). CAF issues landmark €100 million Blue Bond – UNDP Technical Coordinator.
https://www.undp.org/latin-america/press-releases/caf-issues-landmark-eur-100-million-blue-bond-undp-technical-coordinator
