Biodiversity Finance and IFC

More than half of the world’s GDP is generated in industries that depend on nature and its services, yet this economic activity is causing unprecedented biodiversity loss, risking livelihoods, economies, and climate goals. We must transition to sustainable business models that protect biodiversity and ecosystem services. Finance and innovative financial solutions are key to supporting this transition; and biodiversity finance has emerged as a fast-growing area in green finance with increased interest from investors, financial institutions, and issuers globally.

Despite increased interest, the market lacked guidance on how to invest in this area. To fill this gap, IFC developed the Biodiversity Finance Reference Guide to provide a structured approach for investors and financiers to identify eligible use of proceeds that constitute biodiversity finance. Given this is a nascent area, IFC is developing additional supplemental materials to support the implementation of the Guide.

Building on the growth of biodiversity and nature finance, the Multilateral Development Banks (MDBs) developed the Common Nature Finance Taxonomy to identify nature finance in their portfolios. The MDB Taxonomy provides a standardized list of activities, organized by sector and cross-cutting theme, that qualify as nature finance.

Institutional Commitment

The World Bank Group Climate Change Action Plan commits to scale investments in nature as part of transformative action to address climate change and biodiversity loss crises together. Separate approaches to resolve each crisis risk being less impactful and fiscally inefficient.

In addition, IFC, as part of the World Bank Group, signed a Joint Statement on Nature, People and Planet, committing Multilateral Development Banks (MDBs) to mainstream nature into their operations. The MDB Common Principles for Tracking Nature-Positive Finance provide guidance for tracking nature-positive investments across MDBs portfolios. In line with these principles, the World Bank Group has developed and released Nature Finance Tracking Methodology to be applied across all institutions of the World Bank Group.

In 2025, the Multilateral Development Banks (MDBs) reconfirmed the global commitment to nature finance by updating the MDB Common Principles for Tracking Nature Finance to better reflect the targets and goals of the Kunming-Montreal Global Biodiversity Framework (GBF). These updated Principles reflect (i) the importance of tracking MDB investments that are instrumental to the implementation of the GBF,; (ii) lessons learned from MDBs engaging in Nature Finance; and include (iii) the MDB Common Nature Finance Taxonomy listing nature finance eligible activities