New research from WRI and NatureFinance offers a first look at what major development banks are doing to support global nature and biodiversity goals.
Photo credit: Noah Buscher – Unsplash
By: Carolyn Neunuebel, Valerie Laxton and Laura Bulbena Janer
The destruction of the Amazon rainforest is one of the world's most pressing ecological crises. It is also an economic crisis. The Amazon is home to 40 million people, most of whom rely on the forest for their livelihoods. It also supports the global economy, from generating rainfall essential to agriculture and water security, to providing medicinal resources, storing carbon and regulating the climate.
It's not just the Amazon; over half of global GDP is moderately or highly dependent on nature. But we've grown the economy in ways that degrade the natural systems upon which it relies.
Halting and reversing nature degradation will require transforming the world's financial flows. We need to eliminate funding that harms nature and significantly increase financing to protect, restore and sustainably manage it.
Multilateral development banks (MDBs), which exist to support countries' development, have been working on the nature agenda for years now and have a key part to play in this transition. A new paper by WRI and NatureFinance offers a first assessment of how they're supporting nature.
Specifically, the research looks at how MDBs are contributing to the targets of the Global Biodiversity Framework, including its goal to mobilize $200 billion for nature annually by 2030. We found that MDBs are increasingly owning their role in addressing nature loss. Yet progress on systematically integrating nature across their activities remains uneven, threatening progress toward $200 billion.
To fulfill their mandates and promote sustainable development, MDBs will need to make faster progress on mainstreaming nature across their operations – or risk undermining all they have achieved so far.
Why Multilateral Development Banks?
Global goals to conserve nature and reverse its decline are enshrined in the 2022 Global Biodiversity Framework. This sets out ambitious targets to protect and restore ecosystems and safeguard biodiversity by 2030.
In early 2025, the international community agreed to a resource mobilization strategy for achieving the framework's goals. The decision specifically calls on MDBs to help shift their client countries toward more nature-positive economies.
MDBs already interact with nature in complex ways, both depending on it and impacting it. For example, a loan to expand an agricultural operation may depend on clean water filtered by forests or on pollination by bees. Take away the forests or the bees, and the project (and the principal on the loan) is in trouble. On the other hand, support for a new rail line or highway could bisect a habitat, stranding populations and disrupting migrations. Or, the project could be designed with wildlife crossings that minimize disruption.
MDBs can also make investments that strengthen ecosystems, economies and societies simultaneously – for example, in landscape restoration, wetland protection or urban greening – helping to drive the transformations envisioned by the Global Biodiversity Framework. These are not merely environmental add-ons; they are the infrastructure of sustainable development.
Even before the Global Biodiversity Framework was finalized, MDBs recognized the connection between nature and development. The World Bank Group, for example, has invested in nature for decades and is a global standard-setter for safeguarding against harmful impacts to nature in project financing.
The 2021 Joint Statement on Nature, People and Planet was an unprecedented acknowledgement by nine leading MDBs that addressing nature loss and climate change are inextricably linked to fulfilling their sustainable development mandates. It marked a collective broadening in MDBs' approaches to nature – from primarily seeking to minimize potential environmental harm toward actively attempting to reverse the drivers of nature loss.
Now, MDBs must translate talk into action. They will have to revisit how they design projects and invest in new businesses and infrastructure. They must also, through interventions like policy-based finance and capacity support, contribute to well-functioning financial systems that allocate resources and manage risks in ways that account for nature.
Progress Toward Mainstreaming Nature at MDBs Remains Uneven
Our analysis evaluated the nine major MDBs that signed the 2021 Joint Statement. We looked at four elements to assess how well these banks are mainstreaming nature in their financing decisions and operations: discourse, collaboration, programs and projects, and financial allocations.
Discourse: MDBs are committing to nature action, but most have not set explicit nature finance targets.
MDBs are powerful contributors to economic discourse, both in countries where they operate and on the global stage. Their thought leadership, institutional commitments and publications shape how nature's role in economic development is understood in both the public and private sectors. They also provide reams of data that are closely studied.
Discourse is also the first step toward driving real-world change. A bank needs to set a strategy or plan around nature to allocate resources effectively and efficiently.
Even though these nine MDBs all signed the Joint Statement on Nature, People and Planet, their high-level strategies and discourses on nature are a mixed bag.
Importantly, none have articulated specific strategies for supporting their client countries to achieve the Global Biodiversity Framework's $200 billion financing target. Meanwhile, just three MDBs directly reference finance for nature within their climate finance targets. And only one, the Inter-American Development Bank, has set a nature-specific finance target.
Setting explicit financing targets and outlining credible strategies to achieve them is crucial. An important next step is for MDBs' shareholders to ensure that the banks set nature finance targets that progressively align with the $200 billion goal.
Targets also require measurement and reporting. Financial institutions of all kinds are increasingly called upon to track and disclose their sustainability impacts and risks. These disclosures make domestic financial markets more resilient to nature loss and can potentially make the private sector more confident in assessing risks and opportunities in nature-related investments. Internationally recognized standards, such as the Taskforce on Nature-Related Financial Disclosures (TNFD), have been developed to meet this call.
However, few MDBs we analyzed use standardized nature-related disclosures at the portfolio level, and none currently follow TNFD guidance. This is the case even though, on average, one-third of MDBs' financial commitments in 2019-2023 were in sectors with material nature-related dependencies and impacts, per TNFD. MDBs should disclose nature-related risks to ensure transparency and guide capital towards nature-positive outcomes.
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Featured WRI Experts:
Carolyn Neunuebel – Research Associate I
Laura Bulbena Janer – Project Manager, Food, Land and Water Program, WRI Colombia
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WRI - World Resources Institute
WRI - World Resources Institute
