Financing Biodiversity—But on Whose Terms?

As biodiversity climbs the global agenda, attention has turned to the role of finance. Banks and financial institutions are increasingly positioned as key actors in enabling, or undermining, efforts to halt ecosystem loss.

But a more fundamental question sits underneath that shift: What does “financing biodiversity” actually mean in practice—and for whom?

In 2024, Friends of the Earth US published Financing for Biodiverse Futures? Key Considerations for Financial Institutions to Stop and Reverse Biodiversity Loss, examining how financial institutions are responding to growing expectations to align with the Global Biodiversity Framework (GBF). The report was updated in November 2025 to reflect evolving bank policies and assess how these align with the eight No-Go areas proposed by the Banks and Biodiversity Initiative.

The analysis provides a clear answer: current approaches fall short.

Across an assessment of 13 major international financiers, banks are performing poorly against baseline expectations designed to protect critical ecosystems and uphold the rights of Indigenous Peoples and affected communities. In particular, financial institutions have yet to adequately exclude financing for activities that impact areas where Free, Prior, and Informed Consent (FPIC) has not been obtained, or where ecosystems are considered at risk or critical for biodiversity.

This is not simply a gap in implementation. It reflects a deeper inconsistency in how biodiversity is approached.

On one hand, financial institutions are expanding investments in nature through nature-based solutions, biodiversity-linked finance, and efforts to integrate the value of nature into financial decision-making. These approaches are increasingly positioned as part of the solution.

On the other hand, those same institutions continue to provide project and corporate finance to activities that drive deforestation, land conversion, and ecosystem degradation, particularly in sectors such as extractives, agribusiness, and infrastructure.

Taken together, this reflects not a transition, but a coexistence of opposing financial flows.

The findings point to a baseline that remains insufficiently applied.

Stopping and reversing biodiversity loss consistent with the GBF requires more than commitments or new financial products. It requires that financial institutions adopt and implement clear exclusion criteria, including the proposed No-Go areas, to prevent direct and indirect financing of harm.

This includes treating areas where FPIC has not been obtained and critical ecosystems as out of scope for financing.

This baseline is increasingly articulated through Indigenous-led expectations for financiers, including by the Indigenous Advisory Group to the Banks and Biodiversity Initiative, which I supported in translating into finance-facing outputs and inclusive engagements with representative of global financial institutions.

I am pleased to have contributed to the development and update of the report, supporting the research, analysis, and synthesis underpinning its findings, including assessment of bank policies against the No-Go framework and evolving biodiversity standards.

The report also highlights a second critical gap: accurate measurement and true accountability.

Financial institutions are not yet consistently measuring or publicly reporting on the biodiversity impacts of their full portfolios. This includes both direct and indirect impacts, as well as progress against stated commitments. These failures are limiting their ability to assess whether financing is contributing to, or undermining, biodiversity outcomes.

Without clear exclusions and credible measurement, “nature-positive” finance does not represent a transition, it coexists with, and is undermined by, continued financing of activities that drive biodiversity loss and violate rights.

As financial institutions expand their role in biodiversity-related investments, the question is not whether financial institutions can act, but whether they are willing to align financing decisions with the long-term value of nature, and the stability of the systems their business depends on.