The case for investing in nature has never been stronger, yet the money still isn’t flowing. The global economy depends on stable ecosystems, but research puts the nature finance gap at roughly $700 billion a year — the difference between what is needed to safeguard natural systems and what is currently being invested. That shortfall poses risks to supply chains, food security, public health, insurance, and capital markets themselves.

Why Finance Isn’t Flowing Towards Nature

While funds towards climate action and ESG have increased, investment has predominantly concentrated on mitigation and the energy transition. Biodiversity, water, soil and ecosystems remain underfunded, undervalued and underpriced.

For Eva Zabey, chief executive of advocacy platform Business for Nature, the problem is structural. “The core reason this finance gap exists in the first place is that nature isn’t fully recognized – and valued – in mainstream business, economic and financial systems,” she says. She explains that undervaluation is reinforced by perverse subsidy flows saying, “Governments continue to spend an incredible amount of money, at least $2.6 trillion a year, on subsidies that harm nature, often unintentionally. We cannot close the finance gap if finance is still flowing to the very things that cause it.”

It’s clear that the economy exists within nature, with GDP growth often driven by the extraction of nature, whether that's in agriculture, forestry, fisheries, or mining, yet the value of these ecosystems is rarely accounted for until they are degraded or lost.

Zabey argues that ending harmful subsidies, requiring nature-related disclosures through frameworks like the Taskforce on Nature-related Financial Disclosures, and creating credible sectoral pathways would make hidden risks visible, shift capital allocations, and reward resilience. “By requiring companies and financial institutions to report on their dependencies and impacts on nature, we make it a core business issue, not an optional one,” she explains. “As a result, capital will naturally flow away from companies with high environmental risk and toward those that are more resilient.”

Read the full article about bridging the nature finance gap by Felicia Jackson at Forbes.