In the wake of the COVID-19 crisis, awareness of nature’s role in sustaining economies has become increasingly prominent. International frameworks such as the Convention on Biological Diversity emphasize the importance of aligning both public and private finance with nature-positive development, ensuring that natural capital is restored at a rate that maintains ecological balance.
The UNDP and the Swedish International Development Cooperation Agency (Sida), through their joint Programme on Environment and Climate Change now in its sixth year, have taken a lead role in advancing this agenda. Their efforts focus on shifting finance away from activities that deplete natural resources and channeling greater investment into nature. Sida and UNDP have supported initiatives such as the Taskforce on Nature-Related Financial Disclosures (TNFD), the Biodiversity Finance Initiative (BIOFIN), and the Biodiversity Credit Alliance (BCA), while also establishing funding mechanisms for coral reef protection.
Between 2020 and 2022, Sida, together with the governments of the UK and Italy, played a critical role in shaping the TNFD. This framework provides businesses with a global system to assess, manage, and disclose nature-related risks and opportunities. TNFD has since been adopted by more than 500 institutions, representing $6.5 trillion in market capitalization and $17.7 trillion in assets under management. Alongside this, BIOFIN works across 133 countries with governments, civil society, and the private sector to catalyze investment in biodiversity, ensuring that ecosystems not only survive but thrive, supporting human well-being.
In addition to financing frameworks, the Convention on Biological Diversity has called for innovative instruments such as biodiversity credits to attract private sector investment. Sida has supported the UN-backed Biodiversity Credit Alliance, which develops standards and principles to ensure credibility in emerging biodiversity markets. Launched at COP15 in 2022, the BCA has since gained significant momentum, drawing participation from over 400 organizations by COP16 in 2024. The initiative enables companies, NGOs, academics, and indigenous communities to collaborate in setting integrity rules for biodiversity credit systems, ensuring that these credits complement traditional regulations and funding.
Sida has also supported on-the-ground investment models that blend public and private finance. Notably, it was the first donor to back the Global Fund for Coral Reefs, a UN multi-partner trust fund established in 2020. The fund currently manages $90 million in grants and $135 million in investments, with further resources expected in 2025, and is active in Fiji, Papua New Guinea, Jordan’s Gulf of Aqaba, and the Maldives.
Efforts have also extended to protecting endangered species and ecosystems, as demonstrated by the Tiger Landscape Investment Fund in Malaysia and Thailand. Supported by Sida, Cartier for Nature, and the German government, this fund mobilizes private sector investment in small and medium enterprises that contribute to the restoration and sustainable management of tiger habitats, with the broader goal of safeguarding entire ecosystems.
According to UNDP Nature Hub Director Midori Paxton, Sida’s collaboration has been instrumental in shaping UNDP’s Nature Pledge—a commitment to halting biodiversity loss, restoring ecosystems, and transitioning towards a nature-positive economy. This will be achieved through shifts in values and narratives, policy and practice, and economics and finance. Sida’s role in pioneering innovative finance solutions has given UNDP a strong foundation to advance this transition for the benefit of people, nature, and future generations.
