As biodiversity loss accelerates, financial actors are increasingly engaging with the issue—but not under the banner of biodiversity itself. Instead, they are embracing nature-related risk, an umbrella concept modeled after, aligned with, and integrated into existing climate finance frameworks. This shift raises critical implications for global biodiversity conservation, as it risks prioritizing the most financially legible and climate-compatible environmental concerns.
Concepts shape not only how we understand environmental crises but also how we respond to them. Take sustainable development, for example. Since the 1980s, when it was popularized in the International Union for Conservation of Nature’s World Conservation Strategy, it has shaped global environmental discourse, institutions, and policies, remaining a dominant framework to this day.
The concept of biodiversity emerged around the same time. Coined in 1986 by a group of biologists and ecologists as a contraction of “biological” and “diversity,” it was intended to capture the full spectrum of life on Earth. While biodiversity has successfully penetrated environmental governance, its integration into financial governance has been largely unsuccessful. The same applies to other concepts, such as natural capital, which was designed to make biodiversity legible to financial actors by “speaking the language of the economy.” Yet, despite its widespread use in conservation discourse, it has failed to gain meaningful traction in financial practices.
The estimated financial resources required to halt and reverse biodiversity loss vary widely across studies, with global projections ranging from US$599 billion to US$823 billion annually. Meanwhile, current global biodiversity finance is estimated to be between US$78 billion and US$200 billion per year, highlighting a significant shortfall in funding. While direct comparisons may be misleading, annual climate finance is estimated at US$1.5 trillion.
Over the past decade, a new framework has emerged to integrate environmental issues into finance: financial risk. This shift was spearheaded by a market-led initiative, the Task Force on Climate-related Financial Disclosures (TCFD), initiated by former Financial Stability Board (FSB) president Mark Carney, which established voluntary guidelines for managing climate risks, commonly referred to as “climate-related risks.” Shortly after, central banks and financial regulators pursued a similar agenda through the Network for Greening the Financial System (NGFS), embedding climate change into financial governance.
While biodiversity was initially overlooked in this framework, financial actors have recently shown increased interest. At first, biodiversity loss was framed as “biodiversity-related risk,” a seemingly natural extension of the climate-related risk model. However, my ongoing research shows that a mix of pragmatic considerations and political compromises led to a shift away from this framing. Financial actors—particularly central banks—were concerned that after incorporating climate change and then biodiversity, they would be expected to continuously expand their scope to new environmental issues, requiring repeated efforts to develop new frameworks. To streamline this process, an overarching “umbrella” concept emerged: nature-related risk—a broad category that encompasses biodiversity while absorbing a wider range, if not theoretically all, of environmental concerns. This concept has now been adopted by most financial institutions worldwide, including the aforementioned NGFS.
This broadening is often justified as an “integrated approach,” seeking to align environmental issues under a single financial framework. While there is no discussion to date about replacing or merging frameworks specifically designed for climate-related risks—which remain distinct pillars in green finance—biodiversity, by contrast, is being absorbed into this overarching concept of nature-related risk.
Because this framework is modeled on climate finance, biodiversity is being integrated into financial governance structures, categories, and frameworks that were not designed to accommodate its specificities. It prioritizes environmental issues that can be quantified, standardized, and incorporated into financial instruments in ways similar to climate change—a challenge that biodiversity struggles to meet.
Indeed, there is no biodiversity equivalent to CO₂ emissions—no single indicator can fully capture global biodiversity loss in the same way that carbon metrics allow financial actors to price and manage climate risk, though an intense, perhaps illusionary, search for the “CO₂ equivalent of biodiversity” is underway. Similarly, while climate change mitigation is structured around a single, measurable target—the 1.5-degree goal—biodiversity loss lacks a comparable benchmark that could lead global action. Some nature conservation actors have attempted—mostly symbolically—to introduce a “global goal” for biodiversity, but these efforts remain aspirational rather than operational. Unlike climate change, biodiversity resists global standardization. For instance, while climate impacts are often experienced locally, biodiversity loss is even more spatially specific, with ecosystems varying significantly over short distances. This makes it difficult to develop generalizable financial models for biodiversity.
Beyond these technical barriers, a more fundamental issue remains: biodiversity loss simply fails to attract investors, as evidenced by the figures above. Unlike climate change mitigation, which is driven by large-scale energy transitions that promise financial returns, biodiversity conservation offers no clear revenue streams, making it a much harder sell to financial markets.
By bundling biodiversity with various other “nature-related” issues within a climate finance framework not designed for its specificities, biodiversity risks being overshadowed. While addressing issues such as water scarcity, land degradation, and climate change—all recognized drivers of biodiversity loss and included in the “nature-related risk” framework—is often expected to create positive feedback loops for biodiversity, this approach risks prioritizing certain aspects while neglecting others. A well-known example is large-scale tree-planting initiatives aimed at CO₂ absorption, which frequently result in the prioritization of fast-growing, monoculture plantations over the protection of diverse ecosystems, ultimately undermining biodiversity conservation goals.
While the concept of nature-related risk seems to be the way forward for integrating most, if not all, environmental issues into financial governance, the question remains: how far can we standardize nature without losing crucial aspects along the way?
