The Key Role of Finance in Biodiversity Conservation

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The loss of biodiversity is not only an environmental issue but also an economic one. Over 50% of the global GDP directly depends on ecosystem services, such as pollination, water quality, or soil fertility. However, between 1992 and 2014, the global stock of natural capital per capita decreased by 40%. This figure has led many financial institutions to revise their risk assessment metrics. Biodiversity thus becomes one of the indicators of environmental sustainability, alongside greenhouse gas emissions within the “E” component of ESG criteria. In this context, finance becomes a key player in nature conservation, influencing global economic choices through capital allocation.

The Taskforce on Nature-related Financial Disclosures (TNFD) is today the main reference for biodiversity-related risk reporting. The goal is to provide a standard framework to help companies and financial institutions integrate nature into decision-making processes. The TNFD works in synergy with organizations such as the GRI, the ISSB and scientific institutions such as UNEP and IUCN. As of today, over 500 companies and 129 financial institutions—which represent about 17.7 trillion dollars in managed assets—have adhered to its recommendations. This sign of growing interest suggests that biodiversity protection is increasingly considered also as a competitiveness and risk management factor.

In Europe, various regulations govern sustainable finance, including the CSRD, the EU Taxonomy, and the SFDR (Sustainable Finance Disclosures Regulation). The latter, in effect since 2021, requires financial institutions to disclose the environmental impact of investments. Among the Principal Adverse Impacts (PAI) defined by the SFDR, number 7 specifically concerns biodiversity and requires the declaration of the share of investments in companies with sites near sensitive areas, which may be subject to negative impacts. However, the lack of a standard definition of "sensitive areas" with reference to biodiversity makes it difficult to compare operators. The information must be accompanied by historical data, future objectives, and planned actions. Although the framework is still evolving, the SFDR represents a first step towards greater transparency on the impact of investments on biodiversity.

One of the main obstacles to biodiversity risk assessment is the lack of data on the precise location of company assets. This type of information is essential for analyzing interaction with local ecosystems, but it is often difficult to obtain. Some companies fear for their safety or reputation, while others consider this data commercially sensitive. In the absence of complete information, analyses rely on models and estimates that do not always reflect reality. Furthermore, the available sources are numerous and poorly harmonized. To improve the quality of assessments, it will be necessary to increase transparency and leverage advanced tools such as artificial intelligence and geospatial analysis.

One of the main obstacles to integrating biodiversity into finance is the lack of clear and universal indicators. While other environmental issues have well-defined standards, in the case of nature, we are faced with still fragmented approaches. The lack of consistency makes it difficult to compare performance between companies or to define strategies based on reliable data. Building a shared system of indicators is an essential step to evaluate real progress and guide decisions. Regulatory developments and new technologies promise to fill this gap, making it easier for investors to act concretely in favor of biodiversity.

This article was created as part of the "Biodiversity services EU expansion" project (CUP: E43D22000480009) under the Region of Lombardy call "PR FESR 2021-2027 – INTERNATIONALIZATION LINE 21-27", aimed at supporting the internationalization of Italian companies. 3Bee is a naturetech company that develops innovative technologies for monitoring, protecting, and regenerating biodiversity, supporting companies in defining customized climate strategies based on the analysis of their impacts and dependencies on nature. With a consolidated portfolio in Italy, Germany, and France and significant partnerships, 3Bee continues its expansion into international markets to create a tangible impact through technology.