The Global Biodiversity Framework Agreement of 2022 will increase the importance of financial market-based approaches to biodiversity conservation. Examples include biodiversity certificates and nature conservation funds that primarily generate their income on the capital market. But turning nature into an investment object will not stop the biodiversity crisis.
Financing has long been a contentious issue in international climate negotiations. Disputes have arisen not just about the unwillingness of industrialized countries – as those mainly responsible for the climate crisis – to pay for the damages caused; at issue is also the way in which this financing is provided. “Market-based instruments” and compensation mechanisms have become popular among governments in industrialized countries. However, their use has repeatedly led to conflicts over land. Similarly contentious approaches and instruments are playing an increasingly important – and equally controversial – role in the financing of biodiversity conservation following the adoption of the Kunming-Montreal Global Biodiversity Framework (GBF) agreement in 2022.
This introduction describes financing models and instruments that are gaining importance in connection with the GBF. Examples include biodiversity certificates and nature conservation funds that primarily generate their income on the capital market. Approaches and instruments at the interface of biodiversity and climate protection, such as REDD (Reducing Emissions from Deforestation and the Degradation of Forests) and the Tropical Forest Forever Facility (TFFF), are also briefly presented. Both instruments emerged from international climate discussions. However, proponents highlight their contribution not only to climate protection, but also to the protection of biodiversity. A critical look at the alleged annual financing gap of USD 700 billion for biodiversity conservation measures, which has been adopted by the GBF, reveals the connection between the postulated financing gap and market-based, capital market-oriented approaches that are increasingly dominating the debate on the conservation of biodiversity.
Lack of Funding as an (Alleged) Cause of the Biodiversity Crisis
The alarmingly rapid loss of species, natural habitats and genetic diversity underlines just how inadequate measures to conserve biodiversity have been for decades. The Aichi Targets adopted in 2010 under the Convention on Biological Diversity (CBD) are a case in point. The CBD is one of three conventions for the protection of the environment adopted at the United Nations Earth Summit in Rio de Janeiro, Brazil, in 1992. At their meeting in Aichi, Japan, in 2010, the contracting parties of the CBD agreed to implement a total of 20 specific targets for the conservation of biodiversity between 2011 and 2020. Not even one of the 20 goals was fully implemented. “Lack of funding” was quickly identified by many as the main reason for the lack of implementation.
In 2022, the Conference of the Parties (COP) to the Convention on Biological Diversity adopted a follow-up agreement, the Kunming-Montreal Global Biodiversity Framework (GBF). The agreement obliges the parties to the CBD to implement a total of 23 measures by 2030, in the hope that these measures will slow down the threat of biodiversity loss and restore damaged ecosystems. The agreement also sets out four long-term goals to be achieved by 2050, goals that are meant to contribute to the long-term conservation of biodiversity. In addition, industrialized countries undertake to provide financial support to countries of the Global South in implementing the GBF. A new global nature conservation fund, the Global Biodiversity Framework Fund (GBFF), is one of the instruments to address funding needs. The GBFF is temporarily hosted by the Global Environment Facility (GEF), a trust fund administered by the World Bank. The question of how to mobilize the necessary financial means to implement the GBF became the central topic of the 16th Conference of the Parties in Colombia (COP16) in 2024.
Gbf Drives Financialization of Nature
The biodiversity crisis discourse has established the narrative that biodiversity is being destroyed because its financial value for the economy and for financial markets is not visible. More recently, the claim that public money alone cannot close an alleged huge funding gap for measures to preserve biodiversity has been integrated into this narrative.
The Global Biodiversity Framework agreement of the CBD (GBF) adopts this narrative of a gigantic financing gap for biodiversity conservation that can only be closed by mobilizing private capital and the introduction of capital market-oriented instruments. Goal D of the agreement obliges the signatory states to close a supposed “biodiversity finance gap” of $700 billion per year by 2050, while Target 19 envisages increasing global financing for biodiversity conservation to $200 billion per year by 2030. Of this, $30 billion are to be provided annually by industrialized countries as part of bilateral cooperation from 2030 onwards, with the remaining $170 billion to be mobilized from various sources. Financing approaches that mobilize private capital and utilize capital markets are explicitly mentioned in the GBF:
“Leveraging private finance, promoting blended finance, implementing strategies for raising new and additional resources, and encouraging the private sector to invest in biodiversity, including through impact funds and other instruments; ... [s]timulating innovative schemes such as payment for ecosystem services, green bonds, biodiversity offsets and credits.” Target 19 c,d., Decision 15/4 of the CBD. Kunming-Montreal Global Biodiversity Framework
With the adoption of the GBF in 2022, the substantive cornerstones of the CBD for the conservation of biodiversity for the coming decades were decided. The agreement enshrines the supposed financing gap of $700 billion annually until 2050, and highlights the importance of market-based instruments. The focus of the follow-up conference (COP16) in Colombia in 2024 was therefore on the “how” of financing: Which approaches and instruments should be used to mobilize a gigantic $700 billion annually to finance measures for the conservation of biodiversity?
What was foreshadowed in the GBF became clearer at the follow-up conference: the resource mobilization strategy adopted at COP16 gives ample space to market-based approaches such as biodiversity banks, debt-for-nature swaps, green bonds, nature conservation funds financed via capital market investments and compensation markets, without explicitly mentioning them. In the section “new and additional resources”, for example, only a link in a footnote on the term “innovative schemes” indicates that said innovative schemes are primarily market-based approaches and instruments.
Paragraph 6(c) /Annex I of the strategy underlines the importance of the financial market instruments already mentioned in Target 19 of the GBF (see above) by including the exact wording in the strategy.
The UN Environment Programme (UNEP) speaks of a “new era of biodiversity financing”, while international conservation organizations such as The Nature Conservancy celebrated the decisions as groundbreaking. They benefit from the propagated financial market instruments such as debt-for-nature swaps and work closely with financial market players on the development of the propagated approaches and instruments.
Biodiversity is turned into an investment object for the very financial markets that have been driving its destruction for decades.
Organizations and networks from the Global South, however, warn against this increasing financialization of nature if biodiversity protection is seen first and foremost as a business model for generating new income streams for private investors. They warn that this approach will inevitably threaten the territorial autonomy of Indigenous Peoples and traditional communities. The stipulation of a $700 billion annual financing gap in the GBF, together with the legitimization of market-based instruments as a way to close it, effectively turns biodiversity into an investment object for the very financial markets that have been driving its destruction for decades. Experts also point to interest-driven and implausible assumptions on which the calculations of the supposed financing gap are based (see next section) and to the lack of evidence of success of many of the market-based approaches and instruments that have been propagated for the past two decades.
The Cali Fund, which a COP16 decision operationalized, is based on a different financing approach. Companies from the pharmaceutical, food, chemical, and cosmetics industries, among others, are to pay 0.1 percent of their turnover or 1.0 percent of their profits from the use of natural gene sequences that they utilize in the development and manufacture of new products. These contributions will be used, among others, to implement the goals and measures of the GBF. At least 50 percent of the Cali Fund’s resources are intended to benefit Indigenous Peoples and local communities, a contribution to “recognize their role as stewards of biodiversity”, according to the CBD Secretariat. The fund, which had already been established in the GBF, brought a record number of over 1,200 registered lobbyists from the relevant sectors to COP16. In the end, the prospect of obligatory company contributions to the Cali Fund was staved off: the COP16 decision states that payments into the fund should be voluntary. So far (as of September 2025), the fund remains empty.
What Lies Behind the Financing Gap Narrative?
The $700 billion financing gap stipulated in Goal D of the GBF, which the contracting states commit to closing by 2050, is largely based on the report Financing Nature: Closing the Global Biodiversity Financing Gap. The report became one of the most cited publications on biodiversity conservation in the run-up to the CBD COP15 and has been described as a “milestone” by prominent representatives of the financial industry.
The report was compiled by three US organizations: the Paulson Institute, founded by former US Treasury Secretary and Goldman Sachs employee Henry Paulson; The Nature Conservancy, the world’s largest conservation organization, which declared net assets of nearly $10 billion in 2024 and was also headed by a former Goldman Sachs executive at the time of the report’s publication; and the Cornell Atkinson Center for Sustainability, a think tank founded by the former vice president of JP Morgan.
“To slow and stop the global loss of biodiversity, we must fundamentally rethink our relationship with nature and transform our economic models and market systems,” the executive summary states. However, the report does not elaborate further on what such a new relationship could look like, nor on how economic models and market systems should be restructured. Instead, the message of Financing Nature was: Significantly more money needs to be spent to preserve biodiversity – money that the financial market can provide. Biodiversity is being touted as an investment opportunity.
The scientist André Standing points out that several such “funding gap reports” have been published in recent years. Since the late 2000s, organizations such as the IUCN, UNEP, OECD and WWF, mostly in collaboration with banks like Credit Suisse and management consultancies like McKinsey, have produced such reports. These reports follow a pattern: they establish the existence of a funding gap too large to be closed with public funds, and therefore private capital must be “mobilized”. The recommendations always include strategies such as blended finance (the combination of public funds with private investments) and an expansion of instruments that rely on investments in the capital market.
The Financing Nature report follows this pattern, envisioning that global capital markets will provide most of the funding allegedly needed to conserve biodiversity. The report’s popularity masks criticism of the calculations. The reliability of both the methods used to determine current expenditures for biodiversity conservation and the projections themselves have been called into question. Current spending on biodiversity protection includes billions of dollars for controversial biodiversity compensation or “green” bonds, the contribution of which to biodiversity protection is widely questioned. By including financing through these controversial instruments, the methodology already inflates the figures when determining the current state. While the Financing Nature report estimates current global spending on biodiversity conservation at between $124 and $143 billion, Germany’s state-owned development bank KfW assumes annual spending on biodiversity protection of $100 billion. “The claim that governments, international organizations, philanthropists, and the private sector spend about $140 billion a year on mechanisms that increase biodiversity is untrue. The authors of Financing Nature ignore all of the literature that questions the reliability of underlying data,” said expert André Standing in an interview.
Such interest-driven accounting opens a wide range of new investment opportunities (...) but in no way reflects the actual state.
At the same time, Financing Nature – and thus also Goal D of the GBF – does not consider the contributions and expenditure of millions of Indigenous Peoples, smallholder families and fisherfolk for the conservation of biodiversity. Their financial contribution to biodiversity conservation is thus rendered invisible. Such interest-driven accounting opens a wide range of new investment opportunities, especially for asset management companies / investment funds, but in no way reflects the actual state and distribution of efforts – including financial efforts – to conserve biodiversity.
Approaches and Instruments for the Financing – Or Rather the Financialization – Of Biodiversity Conservation
As mentioned above, the GBF and reports such as Financing Nature describe market-based approaches and instruments in biodiversity conservation as promising and productive new sources of funding to help close the existing gap in the financing of nature conservation measures and biodiversity conservation. This is all the more surprising given that pilot programs and existing experience with biodiversity banks, biodiversity certificatesand compensation instrumentssuch as REDD have revealed numerous risks and inherent contradictions while significant successes in the use of such instruments for biodiversity conservation remain evasive. Nevertheless, the role of public budget contributions is increasingly receding into the background – at least in public discourse. For decades, these contributions constituted the main source of funding for “nature conservation”; in contrast to market-oriented instruments, publicly funded programs played a crucial role, for example, in the demarcation of Indigenous territories and the recognition of collective land rights for traditional communities – demonstrably effective measures for the conservation of biodiversity.
By contrast, since the adoption of the GBF, the number of pilot programs, model projects and initiatives by commercial providers of tradable biodiversity certificates, “Debt-for-Nature Swaps 2.0” (debt restructuring to finance nature conservation) and structured investment funds has increased significantly. Approaches and instruments at the interface of biodiversity and climate protection have also gained in importance. In particular, REDD and the Tropical Forest Forever Facility are said to not only contribute to climate protection but also to biodiversity protection. The “Biodiversity Finance Trends Dashboard 2025”, which is supported by the British government, also highlights the connection between climate and biodiversity finance. It states that 89 percent of bilaterally financed measures to conserve biodiversity also contribute to climate protection, while 22 percent of bilateral climate financing is said to contribute to biodiversity conservation as well.
The following section briefly introduces some of the most controversial instruments, approaches, and initiatives.
Biodiversity Certificates
Biodiversity certificates (often referred to as biodiversity credits) are tradable certificates that purport to represent “measurable conservation outcomes” – such as the protection of a particular species or natural habitat, or parts thereof. Companies can buy these certificates, usually from private providers – for example, to meet voluntary sustainability goals. However, biodiversity certificates are increasingly being used to obtain funding or permits for projects that destroy legally protected habitats or endangered species. Biodiversity certificates thus allow companies to implement environmentally destructive projects even where existing legal regulations prohibit such destruction.
Biodiversity certificates (biodiversity offsets / biodiversity credits / nature credits) have been criticized since their introduction (see also the New Economy of Nature dossier). As recently as October 2025, over 300 organizations signed a declarationcalling for an end to the development of biodiversity credits and offsets. The arguments put forward by critics are manifold. The spectrum ranges from fundamental objections that the approach necessarily reduces unique nature to tradable individual parts and fails to recognize the complexity of ecosystems, to empirical studies that prove that projects generating biodiversity certificates often miss their intended targets but nevertheless justify the destruction of biodiversity elsewhere.
The 2022 GBF is the first official document from a CBD Conference of the Parties to explicitly mention the controversial approach.
The International Advisory Panel on Biodiversity Credits (IAPB) is one of the most influential initiatives for the financialization of biodiversity conservation. In particular, the Panel advocates the introduction of internationally tradable biodiversity certificates. Initiated by the French and British governments, the initiative includes the World Economic Forum, IUCN, the lobby group NatureFinance, the French bank BNP Paribas, the consulting firm EY, the Taskforce on Nature-related Financial Disclosures (TNFD), the US conservation organization The Nature Conservancy, and the Science Based Targets Initiative (SBTi). In May 2025, the Advisory Panel published its “High-level Principles to Guide the Biodiversity Credit Market”.
Another body that promotes the international trade in biodiversity certificates is the “Biodiversity Credit Alliance”. It was launched during CBD COP15 with support from the United Nations Development Programme (UNDP), the United Nations Environment Programme Financial Initiative (UNEP FI) and the Swedish Society for International Development Cooperation (SIDA). Its members are predominantly operators of projects that generate biodiversity certificates, who are pushing for the creation of a global market for such instruments.
The European Commission launched a “Nature Credits” program and published a “Roadmap towards Nature Credits” in July 2025. An NGO report documented extensive shortcomings in the pilot projects of the Nature Credits program shortly after implementation began.
Redd as a Source of Inspiration for International Trade in Biodiversity Certificates
For the past two decades, REDD has been promoted as a great hope for linking forest and climate protection. REDD stands for “Reducing Emissions from Deforestation and Forest Degradation and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries”. The instrument, which was developed in 2005 in the context of UN climate protection negotiations, is also said to make a decisive contribution to biodiversity conservation by promoting the preservation of forests as a habitat for countless species.
The basic idea of REDD is to create financial incentives through performance-based payments or tradable compensation credits to reduce deforestation – and the associated carbon emissions – and to promote reforestation. Tradable offset credits have become the main source of funding for REDD, and the instrument has been criticized as selling indulgences and commercializing nature.
The REDD approach has yet to prove that it can make a significant and demonstrable contribution to forest conservation.
Even after twenty years of funding pilot programs worth millions and financial and technical support for the implementation of REDD programs and private sector projects, the REDD approach has yet to prove that it can make a significant and demonstrable contribution to forest conservation. At the same time, the list of conflicts and scandals related to REDD projects has grown steadily. As numerous studies have pointed out, trom a climate protection perspective, the likelihood that REDD has generated millions of phantom credits, which have contributed to an increase in greenhouse gases in the atmosphere instead of reducing them, is particularly problematic. In 2025, seventeen renowned scientists criticized REDD and summarized the increasingly vocal criticism of recent years in “Demystifying the Romanticized Narratives About Carbon Credits From Voluntary Forest Conservation”. Nevertheless, advocates of international trade in biodiversity certificates in particular see trade in REDD certificates as paving the way for global biodiversity markets.
With the increasing dominance of REDD, programs that promote forest protection through payments for ecosystem services (PES) have also been converted into financing instruments, in which payments are linked to proof of carbon emission reductions. Examples of this include the Amazon pilot project “Floresta+ Amazônia” and the Amazon Fund for Forest Conservation and Climate Protection in Brazil, which the German government has also been financially supporting for years.
Structured Funds and Conservation Trust Funds
Structured funds and conservation trust fundsare expected to play a key role in financing the goals set out in the Global Biodiversity Framework. The World Bank’s Global Environmental Facility (GEF) sees such funds as a “catalyst for innovative financial instruments” and mentions debt-for-nature swaps and private investments in nature conservation as specific examples.
International conservation organizations such as The Nature Conservancy, Conservation International and the Wildlife Conservation Society – often in collaboration with banks such as Credit Suisse or JP Morgan – are increasingly launching structured funds that generate profits on the capital market. These profits are then used to finance nature conservation projects of the respective organizations, among other things.
German development cooperation is also increasingly relying on such funds. KfW asserts that conservation trust funds have raised nature conservation to a new level, both conceptually and financially. As of November 2025, KfW supports 16 nature conservation funds with a total volume of around one billion euros. The Legacy Landscapes Fund (LLF), established in 2020 by KfW on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ), is particularly controversial. Investigations in the LLF-supported Odzala-Kokoua National Park in the Republic of Congo in 2022 uncovered serious human rights violations by armed park rangers against local residents. Although an external investigation by an international law firm confirmed the allegations in mid-2025, the LLF fund remains committed to further financing.
Tropical Forest Forever Facility (TFFF)
The Tropical Forest Forever Facility (TFFF) is being lauded as an innovative new financing approach to fund the conservation of tropical forests. Deposits of (hoped-for) contributions totaling $25 billion from public funds and foundations will be used to mobilize approximately $100 billion in private capital through a newly created investment fund – the Tropical Forest Investment Fund (TFIF) – and invest it in the capital market. The aim is to be able to disburse up to $4 billion annually to countries in the Global South for the conservation of tropical forests. Tropical forest countries will only have access to these payments if they can prove that their deforestation rate has fallen below a set threshold (0.5 percent), that they have transparent mechanisms for the use of funds, and that they use reliable methods for measuring forest area.
TFFF would exploit the crushing debt burden of these countries to raise the hoped-for billions.
Criticism of the TFFF has so far come mainly from social movements and organizations in the Global South. They reject the fund’s investment model, which includes the purchase of government bonds from countries in the Global South. Instead of supporting the long-standing demand for the cancellation of illegitimate debts of countries in the Global South, the TFFF would exploit the crushing debt burden of these countries to raise the hoped-for billions. According to its critics, the TFFF is therefore an instrument that generates returns for private investors on the backs of highly indebted countries in the Global South, and for whose indebtedness the beneficiaries in the Global North share responsibility. The organization Third World Network has pointed out this contradiction in the financing of the TFFF: The capital market profits that are supposed to finance the protection of tropical forests come largely from the developing countries themselves, whose historically illegitimate debt burden saddles them with high debt repayment costs. The British organization CornerHouse describes the TFFF as an instrument designed to “transfer wealth from South to North”.
Conclusion: Turning Nature Into an Investment Object Will Not Stop the Biodiversity Crisis
The Kunming-Montreal Global Biodiversity Framework relies on the unsubstantiated hypothesis that the biodiversity crisis can be stopped with more money. Such an analysis reveals itself as “system-blind” in identifying root cause of biodiversity loss and leads to solutions that focus on biodiversity as an investment object on the capital market instead of fighting the causes of environmental destruction. The risks are huge, as experience with the REDD approach vividly demonstrates: REDD was introduced on the grounds that deforestation could be stopped if only profits could be generated with not only the destruction but also protection of forests. Twenty years after the introduction of REDD, there is no empirical evidence for the postulated positive contribution of the approach to climate protection, and global deforestation continues almost unchecked.
At the same time, the deficits in the approach, inherent contradictions and conflicts in the implementation – especially in connection with the restrictions on smallholder agriculture by the operators of REDD projects – and never-ending scandals surrounding the climate-damaging trade in “hot air” carbon credits from REDD projects are now widely documented.
These experiences and empirical evidence must not be ignored. Relying on failed approaches such as REDD and biodiversity credits or advocating for the financing of forest protection through speculation on the capital market will only aggravate the biodiversity crisis.
