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Effective nature finance needs better data, analysis and tools

News Published 07 Dec 2022 Last modified 16 Mar 2023

1 min read

Photo: © micheile dot com on Unsplash

Topics: Biodiversity — Ecosystems

Alarming degradation of biodiversity has prompted initiatives for financial investments in nature both globally and in Europe. Besides strengthening biodiversity, such investments can have other important benefits, such as supporting climate action, food security, and improving quality of life in cities. European Environment Agency’s (EEA) new briefing highlights that better data, impact analysis and coordination mechanisms are needed to make nature financing effective.

The EEA briefing ‘Financing nature as a solution’ draws attention to the conditions of effective financing of nature-based solutions. The briefing contributes to bridging the gap between analysis on the state of nature in Europe and development of effective biodiversity finance.

To support environmental policy, there is a clear need to considerably increase public and private investments in protecting and restoring nature. However, these investments are challenged by several barriers, such as lack of sufficient data and standardised impact metrics.

According to the EEA briefing, key improvements would create more favourable conditions for effective nature finance. First, biodiversity data needs strengthening to allow for measuring impacts of investments. Moreover, nature and financial data need to be integrated spatially to allow for effective targeting of interventions, such as nature restoration.

Also, there is a need for standardised models about the environmental impacts of different business activities. The EEA briefing notes that while some activities are clearly destructive at local scale, others can create a variety of lower pressures, and some can have mixed impacts or different impacts on different scales.

Finally, protecting and restoring biodiversity requires different types of finance from different actors. Innovative and differentiated mechanisms and finance instruments are therefore needed to attract a broad range of partners, the EEA briefing says.

The findings of this EEA briefing ‘Financing nature as a solution’ will be discussed at a joint online event with the European Investment Bank at Biodiversity Conference of the Parties COP15 on 14 December 2022. More information is available on the event and registration page.

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