The State of Biodiversity Finance and Investment Along the Belt and Road
With the threat of a sixth mass extinction on the horizon, biodiversity conservation has emerged as a central discussion topic over recent years. According to the United Nations Environment Programme Finance Initiative (UNEP FI), the global biodiversity financing gap is estimated to be USD 700 billion per year — a significant shortfall which is beyond the fiscal room and capacity of governments and public financing.
The adoption of the Kunming-Montreal Global Biodiversity Framework (GBF) and the establishment of the Global Biodiversity Framework Fund (GBFF) signal a shift and transition towards tangible outcomes and targets in global biodiversity ecosystem. Whilst key challenges remain, including but not limited to, funding shortages, fragmented regulatory frameworks, and limited private sector engagement, financial institutions play a crucial role in ensuring efficient and effective resource and financing allocation towards biodiversity conservation – complemented by innovative financial instruments and risk management mechanisms to bridge the biodiversity funding gap.
This report examines how financial institutions across the Belt and Road region are responding to and engaging on biodiversity topics and considerations, via a survey amongst members of the Green Investment Principles (GIP) for the Belt and Road.
The survey received responses from 22 members, consisting of commercial banks, investment banks, asset managers, insurers and reinsurers, financial technology (fintech) service providers, and regional financial platforms – based and operating in the Greater China region and emerging markets across multiple continent and jurisdictions (including Europe, Africa, Central Asia).
Overall, the sample demonstrates broad representativeness in terms of geography, business model, and degree of advancement in biodiversity or sustainability integration, which offers a comprehensive reflection of the financial sector’s awareness and practices regarding biodiversity-related issues.
Survey Findings
The survey findings point to four main trends:
1. Awareness outpaces action — 85% of respondents acknowledge that biodiversity risks are material to their business. 54.5% respondents have yet to adopt risk assessment tools.
2. Transition risks take center stage — 81.8% respondents identify reputational and legal risks vis-à-vis tightening regulatory pressure as their top concern.
3. Financial product innovation is taking shape — Green credit, green bonds, and Ecological-Oriented Development (EOD) models are gaining traction, but have yet to scale.
4. Sector priorities differ — Agriculture, forestry, fisheries, infrastructure, and tourism stand out as the most biodiversity-dependent sectors, requiring tailored financial solutions.
Based on the survey results and a review of the financial industry’s evolving role in driving climate action, biodiversity-related financial products are expected to gradually transform and shift from supply-side driven to a demand-led growth.
Financial institutions could play a critical role in advancing biodiversity conservation, including via capital mobilization, project financing, risk management, and product innovation. As the biodiversity finance market continue to catalyze and mature, enhanced policy support, international cooperation, capital mobilization, disclosure, development of tools and guidance, capacity building, financial innovation, as well as stakeholder engagement and outreach – will be instrumental in ensuring continuous and sustained development of the biodiversity finance ecosystem.
Drawing on empirical analysis and case studies, this report outlines a roadmap for financial institutions to engage in biodiversity conservation. Biodiversity finance is expected to shift from being primarily policy-driven to demand-driven, alongside strengthened policy support, international cooperation, and financial technology development — hence a core driver of the global green economic transition.
WG1 Biodiversity Finance Report EN.pdf
WG1 Biodiversity Finance Report CN.pdf