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Nature underpins over half of global gross domestic product, yet it continues to degrade.

Financial institutions that view portfolios through a nature lens can better manage material risks and identify strategic opportunities.

China’s financial institutions are piloting cutting-edge tools but face challenges in data quality, pricing models and viable business cases.

The global environmental landscape has become increasingly complex, with climate change, biodiversity loss, ocean health and plastic pollution all accelerating over the past decade.

Major international agreements, such as the Paris Agreement and the Kunming-Montreal Global Biodiversity Framework, are now being integrated into regional and national policies, regulations and frameworks, driving economic shifts toward the goals set in these accords.

More than half of the world’s gross domestic product (GDP)—valued at approximately $58 trillion —is highly or moderately dependent on nature.

China is particularly exposed, with an estimated 65% of its GDP at risk from nature loss. Despite this dependence, nature degradation continues globally, driven by land- and sea-use changes, climate change, resource exploitation, pollution and invasive species.

Under the leadership of China as the president of the 15th Conference of the Parties (COP15) to the Convention on Biological Diversity, 196 parties committed to undertaking the mission of taking urgent action by 2030 to halt and reverse biodiversity loss, thereby putting nature on a path to recovery.

With just five years remaining until this milestone – and the parallel deadline for the United Nations Sustainable Development Goals (SDGs) – the pace of transition must accelerate significantly.

Financial institutions and real economy sectors face mounting risks of economic recession, which could constrain the financial and human resources available for environmental agendas.

It is, therefore, essential for sustainability efforts to collaborate, not in isolation or competition but in a coordinated and interconnected manner.

Why a nature lens is essential

According to the officially adopted definition by the Convention on Biological Diversity, nature encompasses all life on Earth (including biodiversity), as well as the geology, water, climate and all other inanimate components of our planet.

With biodiversity nesting within nature, only by addressing the full spectrum of economic and societal impacts on nature, using a systemic approach, can we halt and reverse biodiversity loss.

Land, freshwater, ocean and atmosphere comprise the four realms in which our society and economy interact with nature and have an impact on it.

Efforts to address climate change, pollution, water scarcity and ocean ecosystem degradation are all deeply interconnected with the broader nature agenda, including biodiversity loss.

Recommendations of the Taskforce on Nature-related Financial Disclosures Image: Taskforce on Nature-related Financial Disclosures

Examining key sectors – such as agri-food, energy, chemicals, mining and metals and automotives, as listed in the figure below – reveals that their impacts on nature are deeply intertwined with other environmental agendas.

For example, adopting renewable energies can reduce GHG emissions that help mitigate climate change but if the technologies employed have significant negative impacts on nature through their value chains, they may conflict with global biodiversity targets.

A nature lens provides a systemic perspective on environmental SDGs, helping to avoid “progress in one area, setbacks in another.”

Corporate decision-makers who understand the complex linkages between nature and business operations are better equipped to manage the transition and allocate resources effectively for sustainable development.

Business for nature, sector actions towards a nature-positive future Image: World Economic Forum/Business for Nature, Sector Actions Towards a Nature-Positive Future report

Barriers and focus areas

While nature-positive transitions could create $10.1 trillion in annual business opportunities by 2030, global funding for biodiversity is still primarily provided by public finance, with limited private sector participation and often weak risk management practices.

Policy plays a crucial role in mobilizing more social capital for nature by providing regulatory frameworks, tax incentives and risk mitigation tools.

Recent analysis by the World Economic Forum and the International Institute of Green Finance of the Central University for Finance and Economics of China finds that Europe and China tend to use top-down policy frameworks, while the United States and Japan rely more on bottom-up, market-driven strategies.

The more explicitly nature-related themes are mentioned in policy, the more they are reflected in the financial ecosystem.

For example, in China, climate change-related industries and projects are more clearly defined in the green taxonomy, resulting in climate-focused environmental, social and governance funds significantly outnumbering those with other nature-related themes.

Nature-related keyword frequency distribution in China’s sustainable finance Image: World Economic Forum

However, an overemphasis on climate issues cannot substitute for the much-needed action on other environmental agendas. All stakeholders should adopt a systemic, nature-based perspective.

This does not mean that action should be paralyzed by the scale of the challenge; organizations can prioritize themes most material to their business or financial performance.

However, losing the systemic view risks overlooking other nature-related risks and misallocating resources, thereby undermining long-term sustainability goals.

Financial institutions in China face three core challenges in advancing the nature and biodiversity agenda currently:

Lack of credible, accessible, nature-related data.

Limited pricing and evaluation methodologies for nature-related impacts.

Underdeveloped business models with uncertain financial returns.

These barriers are echoed globally, with 86% of financial institutions citing data availability and 78% citing data quality as a key need.

Nature-related sustainable finance in China – Challenges and explorative pathways Image: World Economic Forum

Financial institutions in China are testing several innovative approaches to support biodiversity and manage nature-related risks.

One method involves using artificial intelligence and satellite monitoring to collect real-time data on biodiversity. This helps track environmental changes more accurately and efficiently.

They are also analyzing corporate sustainability disclosures to better understand and assess risks related to nature.

In addition, these institutions are experimenting with new financial tools. These include:

Blended finance (combining public and private funding).Insurance-backed risk-sharing models.Ecosystem service credits, such as using carbon credits as collateral.

These efforts are laying the groundwork for scaling private capital for nature, recognizing that the transition to nature-positive finance will be an iterative journey.

Viewing investments through a nature lens helps financial institutions manage risk and unlock new opportunities.