Biodiversity Finance Reference Guide [Draft]

Nature, underpinned by biologically diverse eco-systems, plays a critical role for national economies and people’s livelihoods and health. It is also a key component of our response to climate change mitigation, resilience, and adaptation. 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 meeting climate goals.

There is a growing recognition of the need to 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. Currently, however, there is no guidance in the market on project eligibility criteria for Biodiversity Finance.

Amid this growing interest in scaling Biodiversity Finance, IFC has built on the Green Bond Principles and the Green Loan Principles and related resources, including the ICMA Handbook for Impact Reporting, to develop the first draft Biodiversity Finance Reference Guide.

This draft received inputs from public and private sector, academia, international organizations, and civil society, during the comment period that took place from June 15 to July 15, 2022. Feedback received will inform the final document for publication.

IFC’s intention is to contribute to the growth of the biodiversity finance market globally. The final document aims to provide an indicative list of investment activities and components that help protect, maintain or enhance biodiversity and ecosystem services as well as sustainably manage natural resources through practices that fuse conservation needs with sustainable development. We expect this document to evolve over time as the market for biodiversity finance develops and matures.