In June 2024, UNEP FI reported that private finance for nature had surged to USD 102 billion in circulation, up elevenfold relative to 2020 (USD 9.4 billion). This year, we look forward to the release of a new iteration of the State of Finance for Nature report by UNEP, which will integrate these and other fresh datasets on private finance for nature — a much-needed update to assess where we stand in closing the nature finance gap. Furthermore, efforts at the UN Convention on Biological Diversity (CBD) to track private finance for nature via a new global reporting indicator are taking shape. This will help to match finance coming to countries’ National Biodiversity Strategy and Action Plan (NBSAP) needs. Natacha Boric, Romie Goedicke den Hertog, Ivo Mulder, Jessica Smith, Thomas Viegas and Alexander Wiese write about the latest developments in nature finance as outlined in a UNEP FI and partners webinar, ‘New Green Shoots in 2025’, which brought together a panel of experts and highlighted trends and innovations to look out for in 2025:

Increased momentum behind insuring a nature positive transition 

While insured losses from natural disasters (USD 140 billion) continued to mount last year, recognition that the insurance sector has a crucial role to play in unlocking private finance for nature has grown. Driven by the UNEP FI PSI Working Group for Nature – consisting of around 40 insurers, reinsurers, brokers, and other stakeholders – there has been a rise in understanding within the insurance sector on how firms can play their part to support the implementation of the Kunming-Montreal Global Biodiversity Framework (GBF). This includes through their role as enablers of economic activities, through identifying and addressing nature-related issues across their financial portfolios – including underwriting – and value chains. In addition to their role as risk managers and risk carriers, through addressing emerging nature-related risks and absorbing financial shocks to build resilience for customers and communities. The end of 2024 saw the PSI working group publish a first-of-its-kind set of global guidance for the insurance sector on priority actions on nature.

Advances in technology are already helping foster development of novel insurance products to manage nature-related risk. For instance, NatureX Venture Studio is developing a parametric instrument to support the scaling of regenerative agriculture, and a wildlife insurance product to incentivise better forestry practices to reduce risks in the Amazon. As understanding in the insurance sector and technology advances both develop further, there is an opportunity to leverage to facilitate better data collection (through remote sensing, eDNA) and analysis (through machine learning) to more effectively monitor and assess the state of nature and associated risks.

Utilising AI advances for nature gathers pace 

Innovative applications of AI and technology are, more widely, rapidly reshaping the nature finance landscape. The University of Oxford-led, and European Space Agency-funded LEON (Leveraging Earth Observation for Nature Finance) project involving UNEP FI and 40 ‘early adopting’ financial institutions, for instance, uses earth observation data combined with AI to identify and unlock new and more impactful financing strategies for nature. By leveraging satellite imagery and advanced analytics, LEON is enabling a more precise understanding of nature’s value and risk factors, making it easier to attract investors. Similarly, companies like Cultivo are using AI to streamline investments in nature. Cultivo’s platform identifies high-potential natural assets, calculates their environmental value, and connects them with impact-driven capital. These advancements are making nature-based solutions more accessible, transparent, and scalable. There is also a big push on many fronts to solve the data challenges for financial institutions on nature, with notable efforts by the TNFD and Finance for Biodiversity Foundation among others.

De-risking through targeted public finance gathers more momentum

The importance of de-risking mechanisms cannot be overstated in scaling nature finance at the level required. Organisations like the Development Finance Corporation (DFC) and the International Finance Corporation (IFC) have been instrumental in this area. Following biodiversity bonds launched by Global South UNEP FI member banks, including Bancolombia and BBVA Colombia, IFC provided guarantees to reduce risks for private investors, enabling an unprecedented level of capital mobilization. The US DFC is expected to continue providing derisking support to debt swaps, with a project market of between USD 500-800 billion in value. With this momentum, de-risking is emerging as a cornerstone strategy to attract mainstream finance into projects supporting nature-positive outcomes, especially in emerging markets where debt relief and new capital are most needed. Any re-financing of sovereign debt-distressed countries, however, should lead to lowering the overall debt, lower the debt-servicing costs while increasing funding for conservation in line with national biodiversity action plans (NBSAPs) and nature-related aspects of national climate plans (NCDs). The green bond market continues to increase its share of nature-linked projects, with biodiversity featuring in just 5% of instruments issued in 2020 increasing up to 16% in 2023, and more than USD 400 billion of all green bonds mentioning at least one nature-related theme.

Indigenous leadership – where there is the will, there is the way

Indigenous leadership is increasingly recognized as essential in advancing equitable and impactful nature finance. Initiatives such as the Savimbo biodiversity credit project in the Putumayo region of the Colombian Amazon illustrate this development. Led by Indigenous communities, Savimbo provides biodiversity credits tied to sustainable land management practices, ensuring both financial returns and cultural preservation. Beyond these projects, organizations like Nia Tero and the Indigenous Peoples Major Group are advocating for greater direct access to funding by Indigenous communities. Their leadership goes beyond advocacy, with actions focused on embedding Indigenous rights and knowledge systems into financial mechanisms. These initiatives set a strong example for others to follow, but still the number of transactions does not yet match the stated ambition of greater Indigenous inclusion into such projects. The recently-agreed “Cali Fund” will channel industry contributions from digital sequence information (DSI) to support Indigenous communities who steward nature. Additionally, a new permanent body under Article 8(j) will enhance Indigenous Peoples participation in biodiversity decision-making. Listen to a UNEP FI webinar that gave UNEP FI members the chance to hear from Indigenous leaders.

Financing intact nature – nested, jurisdictional REDD+ enters the spotlight

Most in this space agree we should finance conservation ahead of restoration, because it is more cost-efficient and because existing tropical forests commonly harbour more biological diversity than land in the process of being restored, but the mechanisms for financing intact nature are more challenging. Championed by the Brazilian government, the Tropical Forest Forever Facility (TFFF) is an ambitious initiative designed to drive large-scale financing for the protection and restoration of tropical forests. It operates by aligning public, private, and philanthropic capital to create long-term funding mechanisms for intact forest ecosystems. TFFF is unique in its approach, combining conservation finance tools such as biodiversity credits and forest conservation bonds with direct partnerships with local and Indigenous communities. At COP16 in Cali, the TFFF was highlighted for its potential to provide scalable solutions for halting deforestation while simultaneously addressing equity and inclusion for forest-dependent communities.

Heading to UNFCCC COP30 in Belem, stakeholders are seeking financial solutions to halt forest lost in the Amazon and Congo Basin in particular. The recently launched Race to Belém initiative, with USD 100 million backed by a Geneva-based trader and aiming to raise USD 1.5 billion in 10 months, has global attention as the fastest fundraise for nature in history. Using nested, jurisdictional REDD+ (Reducing Emissions from Deforestation and Forest Degradation) credits, the initiative aligns financial incentives with large-scale forest conservation in the Amazon. This approach demonstrates the potential for scalable, high-impact solutions that address climate change and biodiversity loss simultaneously. With billions of dollars already committed, it sets a high benchmark for future fundraising campaigns.

Wealth-holders are coming forward in creative ways

A remarkable trend taking shape is the increasing involvement of Ultra High Net Worth Individuals (UHNWIs) and family offices in nature finance. The Nature 2 campaign-linked fund is aiming to raise USD 1 billion by Belem via commitments from UHNW individuals and institutions to allocate 2% of their managed assets to nature-positive investments. With governments showing caution in committing funds, private individuals and family offices have stepped in to bridge the gap. The Lukas Walton (Walmart family) supported Builders Vision recently launched a groundbreaking USD 70 million guarantee mechanism for the Indonesia debt conversion, de-risking nature-positive investments and paving the way for other private actors to step up. This shift underscores a growing recognition among private wealth managers of the risks posed by biodiversity loss and the opportunities available in investing in nature-positive solutions. Family offices also see a responsibility to do more as government ambition on nature wanes.

Private equity and venture capital expand their footprint

Private equity and venture capital continue to scale their engagement in nature-focused solutions. Superorganism, for instance, has now invested in 15 portfolio companies dedicated to biodiversity restoration and ecosystem services. These include startups innovating in areas like regenerative agriculture, carbon markets, and ecosystem monitoring technologies. Other examples include Astanor, focusing on food systems transformation, and leader in the nature investing space Mirova, who launched a private equity platform covering five key environmental thematics: smart cities, clean energy, natural resources, circular economy, and agri-agro technologies. This trend reflects a maturing market where investors are increasingly comfortable navigating the complexities of nature-based solutions, spurred by better data and clearer returns on investment.

What’s next for nature finance?

These developments highlight the growing dynamism and innovation in nature finance, and considerable progress in just four years of these market reviews. Let’s continue to build momentum and ensure that 2025 is a year of meaningful progress in aligning private financial flows with global nature goals. Find out more about UNEP FI’s nature work here.

The webinar was held in partnership with the Principles for Responsible Investment, the EU Environment and Climate Business & Biodiversity Platform, and the Finance for Biodiversity Foundation.

Check out the 2024, 2023, and 2022 webinar recordings for insights into the journey so far.