Nature – biodiversity, ecosystems and ecosystem services – provides the planet and the global economy with key services that ensure human well-being and drive economic growth and jobs. However, global economic activity and consumption patterns are leading to an unprecedented loss of nature. The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) and the United Nations Convention on Biological Diversity (UN CBD) have identified five direct human-induced drivers of biodiversity and ecosystem services loss: land and sea use change, direct use and (over)exploitation of natural resources, climate change, pollution and invasive alien species.

The implications are alarming: over the past 50 years, there has been a 73% decline in the average size of monitored wildlife populations, with around one million animal and plant species at risk of extinction – more than at any time in human history. Out of 18 ecosystem services, 14 are in decline. The global economy is heavily dependent on nature, with half of its volume exposed to material risks related to nature. Yet, the transformation to nature-smart economies could create annual business opportunities of $10.1 trillion and 395 million new jobs by 2030.

In response to this crisis, the Kunming-Montreal Global Biodiversity Framework (GBF), adopted by 188 countries in 2022, calls for an economy-wide transformation to halt and reverse nature loss by 2030. The GBF estimates the annual financial needs to meet these goals at $700 billion.

The role of bonds in financing nature conservation

The bond market has significant potential to drive investment towards achieving the collective goals set out in the GBF. Green bonds focused on nature and biodiversity have already been issued, with a portion or 100% of the proceeds allocated to conservation and restoration, and/or to activities addressing the direct causes of nature loss. These issuances reflect the growing interest in this type of thematic instrument.

The International Capital Markets Association (ICMA) published “Sustainable Bonds for Nature: A Practitioner's Guide” in June 2025. This voluntary guide is intended for broad market use, providing guidance to issuers, assisting investors in assessing impact and supporting underwriters in designing transactions that preserve market integrity. It also equips external reviewers with a better understanding of what to expect from a sustainable nature-related bond framework. The guide builds on and is intended to be used in conjunction with existing global market standards such as the Green Bond Principles (GBP) and the Sustainability Linked Bond Principles (SLBP).

Use of Proceeds Bonds

Use of Proceeds (UoP) bonds are the most common type of nature-focused bond. They are typically green bonds or sustainable bonds that align with the four key components of the Green Bond Principles (GBP):

• Use of Proceeds (UoP): Nature-related projects can contribute to restoring and protecting biodiversity, ecosystems and ecosystem services; transforming economic activities to reduce the direct drivers of biodiversity loss (such as land and sea use change, overexploitation, pollution, the spread of invasive species and climate change); integrating nature-based solutions across economic sectors; and implementing supporting initiatives and instruments. All of these projects must go beyond “business as usual” (BAU) and must identify, assess and manage environmental and social risks.
• Project evaluation and selection process.
• Revenue management.
• Reporting (allocation and reporting of impacts): All projects should report at least one relevant impact indicator to demonstrate measurable contributions to nature. Issuers are encouraged to report the environmental and social benefits of projects. The guide in the appendix provides a list of relevant metrics for impact reporting and examples of projects that can be financed through nature-focused bonds.

Sustainability-Linked Bonds (SLBs) with a focus on nature

SLBs are another tool through which issuers can achieve measurable improvements in biodiversity and reduce pressure on ecosystems. These bonds are typically general purpose bonds that may include nature-related key performance indicators (KPIs) to demonstrate issuers’ commitment to contributing to the GBF’s objectives.

• KPI selection: Key performance indicators (KPIs) should be relevant, material to the issuer’s overall business or ESG policy, measurable, externally verifiable and, where possible, comparable. Examples include area of habitat restored, amount of pollutants in water discharged, area managed using sustainable agricultural practices or percentage of water facilities using nature-based solutions.
• Calibration of sustainability targets (SPTs): Issuers may refer to targets and trajectories set out in National Biodiversity Strategies and Action Plans (NBSAPs), GBFs, Sustainable Development Goals (SDGs) or science-based target-setting methodologies.

This guide Sustainable Bonds for Nature represents an important step forward for the sustainable bond market, providing a clear framework and tools for entities seeking to finance nature conservation and restoration. It aims to increase the integrity and transparency of the market, thereby supporting global efforts to reverse nature loss. Spring