1. Introduction

Recently, many financial institutions are turning their focus towards preservation of nature, ecosystems, and biodiversity. There is a growing realisation of negative impacts from financial activities on nature which has made some institutions change their strategies from “do no harm” to “do good”. This is based on recognition of the fact that economic growth has driven biodiversity loss, and that previous strategies aiming to safeguard biodiversity in financing activities have been unsuccessful. While previous strategies have often been ad hoc and aimed at specific activities within financing, the need is now for a holistic integration of biodiversity aspects throughout the whole finance sector. This has potential to unleash the beneficial role that financial institutions could play in the struggle for preserving biodiversity. The focus of this study lies specifically on the Nordic International Finance Institutions (IFI’s), being the Nordic Development Fund (NDF), the Nordic Investment Bank (NIB) and the Nordic Environment Finance Cooperation (Nefco). All three Nordic IFIs have sustainability as part of their mandate and a clear focus on environmental aspects, and it is therefore highly relevant to study what measures they apply in order to ensure that they have a positive impact on biodiversity. The study covers the following topics:

The status globally, in the EU, and the Nordic Region in terms of financial analytical tools and public and private strategies that will ensure that private and public investment promotes, not weakens, biodiversity.
How the Nordic financial institutions (NEFCO, NDF, NIB) work with biodiversity to ensure that they promote, not weaken, biological diversity.
How active the Nordic financial institutions are in financing nature-based climate solutions.
How the institutions follow up on and use the EU’s taxonomy (see EU taxonomy) in their biodiversity work.

The report is commissioned by the Nordic Working Group for Environment and Economy (NME) and the Nordic Working Group on Biodiversity (NBM) under the Nordic Council of Ministers. It has been written by Elvira Borgman, Amalie Engelbrecht Hansen, Alma Møller Nielsen and Rikke Fischer-Bogason from Norion Consult, and Leon Bennun from The Biodiversity Consultancy. We would like to direct our gratitude towards the informants that have provided valuable input through interviews and written correspondence.

1.1. Use of the term biodiversity

The UN Convention on Biological Diversity (CBD) has defined biodiversity as:

“The variability among living organisms from all sources including, inter alia, terrestrial, marine, and other aquatic ecosystems and the ecological complexes of which they are part; this includes diversity within the species, between species and of ecosystems.”

In this study, we will align with this definition. To limit the scope to the most biodiversity relevant activities, this study takes departure in financial activities that are directly related to nature areas, biological systems, ecosystems and species. We do however acknowledge that other activities aimed at for example environmental protection and climate change have indirect effects on biodiversity. These are not primarily studied but may be included in the report to the extent that they are relevant for the analysis.