Bridging the Biodiversity Funding Gap: The Critical Role of Private Investment in Europe

Gõ Kiến

26-03-2025 

“– Where have all the carp gone? It’s just been a couple of days, but there aren’t many left.” 

In “Joint Venture”; Wild Wise Weird [1]

As biodiversity continues to decline across the globe, Europe faces a pressing question: can private finance help close the yawning gap in conservation funding? A recent study by zu Ermgassen et al. [1] examines the state of biodiversity finance in Europe, revealing both promise and peril in efforts to mobilize private investment.

Public funding for conservation remains inadequate. The European Union estimates a shortfall of €18.7 billion per year to meet its 2030 biodiversity targets. In response, international agreements like the Kunming-Montreal Global Biodiversity Framework emphasize scaling up private investment through tools such as biodiversity credits, green bonds, and voluntary carbon markets [2].

Under that context, by drawing on 25 expert interviews and multiple focus groups, the study identifies key drivers of private interest. Economic pressures—particularly in farming—are pushing landowners to diversify their income. At the same time, evolving regulation, technological advances in biodiversity monitoring, and growing environmental commitments from businesses are fostering demand for nature-based investment opportunities.

Yet, despite this momentum, significant barriers remain. Most biodiversity projects struggle to generate the high financial returns investors seek. Political and regulatory uncertainty, the mismatch between the complexity of ecology and the needs of investors, and risks stemming from social perceptions and inequities further dampen investor confidence. Moreover, poorly coordinated public policies—such as agricultural subsidies that reward harmful practices—often work against the very markets governments are trying to build [3].

The study highlights that public policy is both the architect and the gatekeeper of biodiversity finance. Governments play a central role in creating credible markets, ensuring ecological integrity, and reducing investment risks. Ultimately, while private finance can play a vital supporting role, reversing biodiversity loss will still require a clear Nature Quotient-powered vision, strong political will, and sustained public investment [4,5].

References

[1] Vuong QH. (2024). Wild Wise Weird. https://www.amazon.com/dp/B0BG2NNHY6/ 

[2] zu Ermgassen, S. O. S. E., et al. (2025). The current state, opportunities and challenges for upscaling private investment in biodiversity in Europe. Nature Ecology & Evolution, 9, 515–524. https://doi.org/10.1038/s41559-024-02632-0

[3] Karolyi GA, Puente JT. (2023). Biodiversity finance: A call for research into financing nature. Financial Management, 52(2), 231-251. https://doi.org/10.1111/fima.12417 

[4] Damiens FL, et al. (2021). The politics of biodiversity offsetting across time and institutional scales. Nature Sustainability, 4, 170-179. https://www.nature.com/articles/s41893-020-00636-9 

[5] Nguyen MH. (2024). How can satirical fables offer us a vision for sustainability? Visions for Sustainability. https://ojs.unito.it/index.php/visions/article/view/11267