Effective nature finance needs better data, analysis and tools — European Environment Agency

The EEA briefing ‘Financing nature as a solution’ draws attention to the conditions of effective financing of nature-based solutions. The briefing contributes to bridging the gap between analysis on the state of nature in Europe and development of effective biodiversity finance.

To support environmental policy, there is a clear need to considerably increase public and private investments in protecting and restoring nature. However, these investments are challenged by several barriers, such as lack of sufficient data and standardised impact metrics.

According to the EEA briefing, key improvements would create more favourable conditions for effective nature finance. First, biodiversity data needs strengthening to allow for measuring impacts of investments. Moreover, nature and financial data need to be integrated spatially to allow for effective targeting of interventions, such as nature restoration.

Also, there is a need for standardised models about the environmental impacts of different business activities. The EEA briefing notes that while some activities are clearly destructive at local scale, others can create a variety of lower pressures, and some can have mixed impacts or different impacts on different scales.

Finally, protecting and restoring biodiversity requires different types of finance from different actors. Innovative and differentiated mechanisms and finance instruments are therefore needed to attract a broad range of partners, the EEA briefing says.