Work

Gaps between demand and supply of biodiversity impact finance in the Global South

Year: 2025

Type: review

Abstract: This contribution seeks to fill knowledge gaps on what kinds of biodiversity impact investment models already exist, what factors are constraining biodiversity impact finance in the Global South, and what could be done to bridge the gap. The review identifies complexity, high transaction costs, unfamiliarity with the product, and shortages of bankable projects as key challenges pertaining to the financial sector. On the investors’ side, concerns often revolve around the risk–return ratio, insufficient global biodiversity data, and the lack of an international framework defining biodiversity finance. On the investees’ side, there is anxiety over power imbalances from the past finding their way into these new products, which could be detrimental, especially in areas with informal land rights. To move forward, learning platforms and training opportunities on impact finance could be provided to stakeholders, and more resources are needed for de-risking investments through blended financing approaches.

Source: Current Opinion in Environmental Sustainability

DOI: 10.1016/j.cosust.2025.101568

Authors: Astrid Zabel, Vong Nanhthavong, Michael Epprecht

Institution: University of Bern

Language: English

Topic: Sustainable Finance and Green Bonds

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Partnerships for the goals, Reduced inequalities, Life on land

Open Access status: hybrid

Estimated APC paid: $4,200