Amid the escalating biodiversity crisis and climate change, natural capital finance has emerged as one of the most exciting economic approaches of our time. By using financial instruments to protect and restore ecosystems – and simultaneously scaling these efforts globally – nature finance underpins the required transformative path to a sustainable economy that will contribute to our fight against climate change. The European Investment Bank (EIB), and its Chief Climate Change Expert, Nancy Saich, shares her insights on how to strengthen and expand investments in this vital area.
Scaling Nature Finance: EIB’s contribution
As the EU’s financial engine for the green transition, the EIB has set a high standard for investing in solutions that benefit both the climate and biodiversity. According to Nancy Saich, the bank’s approach to nature-based solutions (NbS) is designed to deliver measurable impacts while scaling and enhancing resilience.
“Our focus is on supporting projects with high impact and those that can be scaled and replicated,” Saich explains. Projects such as forest restoration, wetland rehabilitation, and sustainable and climate-resilient agriculture demonstrate how nature investments can combine environmental preservation with sustainable and equitable economic growth and community development.
”The EIB is working closely with the European Commission to support the implementation of the European Union’s 2030 Biodiversity Strategy worldwide. We strive to ensure that all the projects we finance cause “no loss” of biodiversity, and we are factoring biodiversity and ecosystem considerations into all our activities,” Saich adds.
Blended finance: Bridging the gap to private capital
One of the biggest challenges in nature finance is crowding in the private sector. The EIB is working with blended finance, where public funds are used to de-risk investments and make nature projects more appealing to private investors.
“We’ve seen significant success in using public resources as a catalyst,” Saich notes. By partnering with development banks, NGOs, and private companies, the EIB has established models that show how economic profitability can go hand in hand with positive environmental outcomes.
Managing risks
Investments in nature often come with uncertainties, such as ecological risks as a result of exposure to pollution or long-term returns, and it can be hard to develop a revenue stream.
To address these challenges, the EIB has developed advanced methods to assess the economic and ecological sustainability of projects.
“We focus on balancing risks with resilience,” Saich explains.
She adds: “The EIB is aiming to use biodiversity risk scores to help our public and private sector clients move towards a more nature-positive pathway. And we are developing new financial products to help scale up and mobilize nature investments. Our goal is to make it clear that there are opportunities that come with investing in nature. For example, protecting water resources and pollinators help improve the critical supply chains related to the food and agribusiness sectors. Preventing the degradation of forests can protect the supply of valuable commodities and natural resources on which some sectors rely, such as medicines, timber products, and commodities such as cocoa and coffee. Studies have also shown that nature-positive investment strategies could create millions of jobs around the world.”
New financial tools for nature
The EIB is exploring the implementation of innovative financial instruments tailored to nature investments. Green bonds and Sustainabilitylinked instruments for example are among the tools channeling capital into projects that protect critical ecosystems.
“Sustainability bonds have revolutionized our ability to attract institutional investors, and that includes for financing social and environmental objectives beyond climate change – Biodiversity being an important part of wider Green Finance ,” Saich says. “Innovative financial instruments that transfer risk can play a pivotal role in mobilizing both e public and private finance for such investments.
The EIB-financed Land Degradation Neutrality Fund, for example, provides finance and technical assistance for sustainable agriculture and forestry around the world, and the EcoEnterprise Fund supports pro-biodiversity businesses in Latin America,” Saich explains.
She adds: “Furthermore the newly approved climate and nature debt conversion for Barbados has created a reliable source of funding for meaningful investments in protecting nature and addressing climate change, and at the same time contributing to reducing future economic vulnerabilities of the country and supporting sustainable livelihoods through policy implementation,”
Carbon markets and nature-based solutions
Carbon markets are rapidly expanding and could become a significant driver for nature-based solutions. However, Saich stresses the importance of integrating these markets into a broader approach that also ensures biodiversity integrity and social equity.
“If carbon markets are pursued in isolation, we risk unintended consequences,” she warns. “Our goal is to use them as a tool within a holistic strategy that prioritizes ecosystem health and community resilience, and which also protects communities human rights”
Partnerships: The key to success
No single entity can solve the biodiversity crisis alone. For the EIB, partnerships are essential to scaling nature investments.
“Earlier this year, the EIB and WWF announced that they are teaming up to accelerate climate adaptation in Europe by developing Nature-based Solutions that will help to buffer societies and economies against the worsening impacts of the climate and biodiversity crises.
In addition, according to Saich, “Multilateral development banks play a key role in scaling up green investments.
Institutions like the European Investment Bank are already stepping up support for the protection, restoration, and sustainable use of nature.”
The future of Nature Finance
Although nature finance has already shown impressive results, challenges remain. The lack of standardized metrics and limited awareness among investors create barriers to further growth. However, Saich is optimistic.
“Advances in technology, such as satellite monitoring and artificial intelligence, make it easier to document the impacts of our projects, and there is a lot of work going on that EIBis part of to develop good metrics,” she says. “And the growing interest in sustainable finance is opening up new opportunities we must seize.”
For example, Multilateral Development Banks have launched common principles for tracking nature-positive finance. Such information is essential for measuring and incorporating nature into multilateral lenders’ operations, as well as informing other investors about what constitutes a nature-positive investment. Partnerships and joint efforts to put these principles into practice are ongoing.
A financial system for the planet
When looking to the future, Saich envisions a world where nature finance becomes an integral part of the global sustainable financial system. “Not only do we currently invest far too much in activities that harm nature and make our problems worse; we invest only one-third of what is needed to meet the 2030 targets for climate, biodiversity, and land degradation”, Saich explains.
“We want to create an economy that values nature—not just for its intrinsic worth, but also for the vital services it provides to humanity, including in our fight against climate change,” she concludes. “This decade will be decisive, and we are committed to leading the way.”
With innovative solutions, strong partnerships, and a clear vision, the EIB and other pioneers in nature finance offer hope for the future. Nature is not just a resource—it is the foundation of all life. Now is the time to invest in its future.
About European Investment Bank (EIB)
- Founded: 1958
- Headquarters: Luxembourg City, Luxembourg
- Ownership: Owned by the 27 member states of the European Union (EU).
Through their activities, EIB aim to accelerate the green transition, boost technological innovation, bolster security and defence, support regional cohesion and social infrastructure development. Our commitment to international development and capital markets integration safeguards Europe’s strong global presence. Our priorities boost growth, prosperity, technological and social progress in individual member states, across the whole EU and around the world.
Notable Achievements:
- Since its founding, the EIB has invested over €1 trillion in projects around the world.
- It was the first multilateral development bank to stop financing fossil fuel projects, adopting a new energy policy in 2019 to prioritize renewables and energy efficiency.
- The EIB devotes more than 50% of its investments to climate action and environmental sustainability
Global Reach:
The EIB works closely with other EU institutions to foster European integration, promote the development of the EU and support EU policies in over 160 countries around the world.
Did You Know?
The EIB is sometimes referred to as the EU’s “climate bank” for its pivotal role in financing Europe’s green transition.
Website: www.eib.org
Planetary Responsibility Foundation key facts
- Founded: 2022
- Headquarters: Copenhagen, Denmark
- Purpose: To protect and preserve our planet’s nature and biodiversity and promote sustainable development. We do this through a holistic mindset and mission-driven investments and projects that make a difference for both people and the planet and to create returns that can be reinvested in the foundation’s work.
- Strategy: The foundation strategy has two components, RESTORE (nature restoration) and RETHINK (sharing knowledge about building and living more sustainably) that guide our work, and help us create lasting impact.
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For more information, visit: www.prf.dk
