An innovative programme that will enable UK companies to integrate nature into financial decision-making and to mobilise investment in biodiversity, has received £3 million funding from the Natural Environment Research Council (NERC). 

Around half of global GDP is dependent on nature but human economic-related activities are causing changing land use, pollution and climate change, resulting in the deterioration and loss of important terrestrial, freshwater and marine habitats as well as record declines in many species.

Many companies make decisions that have negative impacts on biodiversity without realising the impacts, the risks to themselves or the extent to which they depend on nature. 

Accounting for, and Investing in, nature, so-called ‘green finance’, will enable them to minimise potentially damaging impacts, support economic growth and contribute to reversing the decline in the world’s biodiversity.

The first phase of the Integrating Finance and Biodiversity (IFB) Programme, led by research institutes including the UK Centre for Ecology & Hydrology (UKCEH), established a network of 250 organisations, comprising banks, investment companies, research institutes, government agencies and NGOs. It involved 12 different pilot projects exploring the gaps between the financial system and biodiversity.

The success of this initial work has prompted NERC to pledge further funding, investing £3 million for the second phase, running until 2026, to establish an integrated programme. 

Professor Richard Pywell, Head of Biodiversity Research at UKCEH and leader of one of first phase projects said: “Our work with finance stakeholders clearly showed the value of AI-enabled sensor technologies to provide reliable and verifiable biodiversity data. It also demonstrated the importance of decision support tools to identify investment opportunities and bring them together to provide large-scale viable investments that benefit nature and deliver multiple, quantifiable ecosystem services.”

Dr Nick Wells, Director of Impact and Innovation at UKCEH, who is leading the programme network, added: “Our vision is to bridge scientific, finance, policy and third sector communities, harnessing world-leading science to enable the greening of financial systems for nature and mobilisation of funding for nature recovery.

“The announcement of further funding allows us to be more ambitious as we work together to develop the knowledge, tools and skills to incorporate biodiversity-related risks and opportunities into business strategy, investment decisions, reporting and high-integrity biodiversity markets.”

The work of the programme is organised within three flagship initiatives:

  • Financing Green Sector Transitions tackles the need to restore nature in the UK's agriculture sector, which accounts for over 70 per cent of landcover and address global biodiversity impacts of the UK consumer focusing on tea and rubber imports. 
  • Greening Finance for Nature addresses risk assessment and decision-making processes of financial institutions such as banks and asset management companies and how they impact and could benefit nature. 
  • Financing Biodiversity responds to the challenge of financing biodiversity conservation with integrity at a large scale promoting best practices and coordination in biodiversity finance.

Professor Louise Heathwaite, Executive Chair of NERC, said the research will support the transition to a more nature-positive global financial system. “This NERC funding will empower financial decision makers in the financial, agricultural and public sectors to consider the impact of biodiversity in their investments.

There is further information about the programme at infinbio.org

The 17 institutions working together on the Programme are James Hutton Institute, Lancaster University, Middlesex University, Newcastle University, Queen Mary University of London, Queen's University Belfast, Royal Botanic Garden Edinburgh, the UK Centre for Ecology & Hydrology, University of Brighton, University of Edinburgh, University of Exeter, University of Nottingham, University of Oxford, University of Portsmouth, University of Reading, University of York, and the World Conservation Monitoring Centre.