The Role of Banks in Halting Biodiversity Loss

This chapter explores the changing role of banks in addressing biodiversity loss, shifting from a focus on risk management to a nature-positive finance approach. It begins by highlighting the ongoing financial need for biodiversity, which remains unmet, as well as the dominance of public funding and the negative impact of harmful subsidies. We examine a dual strategy to address this financial gap, which encompasses both disinvestment and engagement strategies. These strategies involve exclusion and divestment policies as well as active stewardship. Additionally, we discuss new channels and instruments for financing biodiversity, such as biodiversity-linked credit products, green, blue, or sustainability-linked bonds, conservation bonds, biodiversity credits, private equity, venture capital, debt-for-nature swaps, payments for ecosystem services, and blended or catalytic finance structures. The chapter concludes by identifying key obstacles to mobilising private capital at scale. It emphasises the urgent need for stronger collaboration between public and private sectors to align banking practices with the Kunming–Montreal Global Biodiversity Framework, ultimately aiming to achieve measurable nature-positive outcomes.