Biodiversity Finance: A Call for Research into Financing Nature

Abstract

Biodiversity conservation will eclipse climate change risk mitigation and adaptation as the next grand challenge for sustainable finance. Closing the financial gap between what is currently spent and what is needed to be spent over the next ten years to mobilize private investment to maintain ecosystem integrity and biodiversity, and the services they provide, is estimated to exceed hundreds of billions per year. Yet, there are no studies in the top tier journals in Finance that have framed the risks related to biodiversity loss, how those risks might be priced, or how the private financing flows need to be intermediated. We lay out one framework and outline important open research questions for financial economists to pursue.

Keywords: Biodiversity, finance, climate change, investments, corporate financial management

JEL Classification: E50, G40, G11