Nefco, the Nordic Green Bank, acknowledges that biodiversity—the diversity of all life on Earth, from ecosystems to species and genetic—is in peril. We also recognise that biodiversity loss has the potential to affect our investment portfolio, sectors and geographic regions of activity.

As a green financier, it is important for Nefco to consider the long-term risks related to biodiversity and natural capital.

Nefco’s Biodiversity Pilot Programme was created in 2022 to test and develop concrete biodiversity solutions co-created with small and medium-sized companies (SMEs) in the private sector. The programme is funded by the Nordic Environmental Development Fund (NMF), which currently receives contributions from the Nordic Council of Ministers. Nefco has managed the NMF fund on behalf of its member countries since 1996.

Environmental issues are important for SMEs for several reasons. In the aggregate, SMEs have a significant environmental footprint. Environmental degradation can also generate challenges for SMEs’ survival and growth. 

The programme has enabled SMEs to learn about biodiversity-related risks and opportunities for their businesses and to test scalable solutions to address them. Our approach was to start working with biodiversity management rather than waiting for established methodologies. We believe that focusing the pilot programme on SMEs has the potential to lead the way for future biodiversity work with organisations of all sizes.

This report presents the key learnings and results of Nefco’s first Biodiversity Pilot Programme from 2022 to 2024.

Nearly one million species are at risk of extinction due to human activities, and 75% of the land surface has been significantly altered by human actions. According to the World Economic Forum, biodiversity loss is currently considered the third most severe global risk, after climate action failure and extreme weather. It threatens not only global health and food security but also economic stability.

The protection of natural resources, species and ecosystems is therefore just as important as tackling the climate crisis. Diverse, well-functioning and resilient ecosystems are also better able to provide society with ecosystem services and benefits that support climate change mitigation, adaptation and disaster risk reduction.

In December 2022, the United Nations Biodiversity Conference in Montréal (COP15) agreed to stop biodiversity loss by 2030. This sent an important signal to the private sector about the need to start assessing and reporting on their impacts and dependencies on nature.

As financial institutions worldwide effectively control the global distribution of funds, they can use this to benefit nature. Each financial institution can set its own agenda for directing investments and project funding. Aligning these agendas with global biodiversity goals can create significant positive momentum. It is also important to directly involve the private and financial sectors to close the financial gap needed to halt nature loss.

The main barrier to scaling up biodiversity action globally is the complexity of data and metrics used. There are many approaches to measuring biodiversity, but currently no scientific consensus on their accuracy. While reporting and metrics are being developed, action needs to be taken immediately. One of the first steps for companies is to build an understanding of their impacts and dependencies on nature, both in direct operations and throughout their value chains.

“The protection of natural resources, species and ecosystems is just as important as tackling the climate crisis.”