Phase II of the Programme

Phase II funding for the Integrating Finance and Biodiversity Programme was announced in March 2024.

The original programme was launched in April 2023 with twelve pilot projects. They explored the gaps between the financial system and biodiversity, and have engaged with over 250 organisations. The emerging outcomes of Phase I prompted NERC to provide further support until April 2026 to shift from a project portfolio to an integrated Programme.

The vision is to build national capability bridging scientific, finance, policy and third sector communities, harnessing and catalysing world-leading science to enable the greening of finance for nature, and mobilisation of capital for nature recovery. This aligns with the goals of the 2023 UK Green Finance Strategy and Environmental Improvement Plan and helps set the global agenda.

Work is organised within three flagship initiatives

Flagship 1: Financing Green Sector Transitions

This Flagship addresses the need to restore nature in the UK's agriculture sector, which accounts for over 70% of landcover. In collaboration with major players - the agri-food sector, investors, and civil society - it will develop financial tools and policies. These will be implemented at real-world sites in England and Northern Ireland to assess their impact on biodiversity. The research will also analyse the impact on habitats of international supply chains, such as tea and rubber imports. The goal is to create financial instruments and reporting mechanisms that benefit investors, land-users, nature, and society, while addressing the impacts of global agri-food chains on biodiversity.

Flagship 2: Greening Finance for Nature

This Flagship takes aim at the decision-making processes of financial institutions such as banks and asset management companies. Their decisions can impact nature adversely, and this needs to change. The focus will be on portfolio risk management, business strategy, risk disclosure, and the prevention of greenwashing. The challenges include securing reliable data, addressing gaps in scientific knowledge, and bridging the gap between science and finance. The goal is to revolutionise financial decision-making by incorporating nature within it. This will be driven by scientific data and guidance, and new regulatory frameworks.

Flagship 3: Financing Biodiversity

This Flagship tackles the challenge of financing biodiversity conservation with integrity at a large scale. It will promote best practices and coordination in biodiversity finance, and will champion the importance of between-site biodiversity. This will ensure that conservation is effective, interconnected, and extends beyond individual sites. Key stakeholders, including the Biodiversity Credit Alliance, will help to deliver a theory of change for the scaling-up of biodiversity finance. The goal is to define what high-integrity finance for biodiversity should look like, and to identify the barriers and opportunities that exist.

The Hub and Themes

The Flagships are underpinned and supported by a Strategic Coordination and Integration Hub which is home to three themes. The first – Data, tools and metrics – will assess the biodiversity data requirements and infrastructure-needs of stakeholders, and collaborate with IAPB and TNFD to devise principles of high integrity and effectiveness. The second theme – Capacity and innovation – will build capacity in finance and biodiversity through secondments, innovation labs, and events to showcase nature-positive finance. The third - UK nations and international co-operation – will engage UK Nations, consider international best practices, and synthesize knowledge for biodiversity markets and policy.

The Programme as a whole will create an active and ongoing network of researchers and finance practitioners across the public, private, and third sectors.

Independent advisory group

The UK Financial Institutions for Nature Group, established by the Green Finance Institute, will act as the Programme’s independent advisory group. This group of 20 financial organisations will provide guidance on emerging research challenges, feedback on outputs and dissemination, and Programme delivery.