Biodiversity 6 Nov 2025
Financing Biodiversity: Why the Financial Sector Can No Longer Afford to Ignore Nature’s Balance Sheet
9 Min Reading Time
This mid-COP30 recap highlights key developments on climate finance, carbon markets, adaptation, and private sector roles as negotiators enter the final stretch in Belém.
As negotiators reach the midpoint of COP30 in Belém, the world’s first climate conference hosted in the Amazon rainforest, the symbolism could hardly be more powerful. This ecosystem sustains 50 million people, including over 400 Indigenous communities across nine nations, making it a living reminder of why climate action matters. Yet the conference’s central challenge remains decidedly practical: transforming a decade of climate commitments into measurable implementation. Brazilian President Luiz Inácio Lula da Silva’s framing of this as the “COP of truth” captures both the urgency and the opportunity, with 111 of 198 Paris Agreement signatories having submitted updated climate plans, momentum is building even as significant work remains.
André Corrêa do Lago, COP30 President, has orchestrated proceedings with the kind of diplomatic finesse that recalls Raúl Estrada-Oyuela’s deft handling of the Kyoto negotiations nearly three decades ago. Like his Argentinian predecessor, Corrêa do Lago understands that progress often means knowing which battles to defer, securing swift agenda approval on consensus topics while parking thornier issues like financing and unilateral trade measures for parallel discussions. This tactical pragmatism aims to avoid the procedural quicksand that has bogged down previous summits.
The financing arithmetic remains sobering. COP29 in Baku secured USD 300 billion annually for developing countries’ climate action by 2035, falling far short of the USD 1.3 trillion needed per year by 20301. This gap represents more than numbers; it defines the credibility crisis facing climate diplomacy. The frustration has boiled over, with developing countries expressing “deep disappointment” at the glacial pace of Article 9.1 discussions – the Paris Agreement provision requiring developed nations to provide climate finance. Countries like Ghana argue that the mandatory “shall” language demands grants, not loans that deepen debt burdens. This financing deadlock compounds broader implementation challenges. Ambassador Mauricio Carvalho Lyrio, Brazil’s Secretary for Climate, Energy and Environment, has seen frustration extend beyond funding to the pace of Nationally Determined Contributions (NDCs) submissions themselves. Even where commitments exist, harder questions emerge about whether they can deliver the transformation required. The gap between ambition and action grows wider with each passing negotiation cycle.
Against this backdrop, Ricardo Mussa, who chairs the Brazilian National Confederation of Industry (CNI)’s Sustainable Business COP30 initiative, captured the emerging consensus: we have entered a phase demanding “less discussion and more execution.” The implication is clear; if traditional climate finance mechanisms cannot bridge the trillion-dollar gap, alternative pathways must emerge. For SE Advisory Services and our clients, the transition from planning to execution is redefining climate leadership. Progress on targets and disclosure is important, but delivery requires a fully integrated approach that links supply chain decarbonisation with accelerated renewable energy procurement, energy efficiency and electrification strategies, high-integrity carbon credit strategy, and nature and climate risk management embedded into adaptation planning. The ability to connect these elements into a science-based, financially resilient decarbonisation plan is now a marker of leadership, turning ambition into measurable impact.
The launch of the Tropical Forests Forever Facility (TFFF) represents COP30’s signature initiative, with USD 5.5 billion already committed toward an ambitious USD 125 billion target. Norway’s USD 3 billion commitment, alongside contributions from Brazil, Indonesia, and others, represents meaningful progress toward the USD 25 billion in public and sponsor capital needed, which will leverage an additional USD 100 billion from private investors, a structure that tests whether climate finance can finally mobilise institutional capital at scale. The facility’s governance structure, incorporating civil society, Indigenous Peoples, and academia through dual advisory and administrative councils, suggests a maturing approach to climate finance.
For businesses, the launch of the TFFF reinforces the growing importance of nature-based finance in transition planning. High-integrity forest projects can deliver measurable carbon removals, strengthen supply chain resilience, and provide co-benefits aligned with global sustainability goals. Companies should focus on three priorities:
On the compliance side, Brazil launched the Open Coalition on Compliance Carbon Markets bringing together China, Canada, Mexico, the UK, EU members, and others to create shared standards for national carbon trading systems. The coalition aims to prevent double-counting and establish common frameworks for linking compliance markets. Brazil is cementing its regional leadership through concrete action; the Ministry of Finance presented the country’s Emission Trading System (SBCE)’s implementation roadmap, building on the October decree (No. 12,6773) that established the regulatory framework. The law provides for the use of carbon credits generated through accredited methodologies, including those from nature-based solutions such as land-use and forestry activities. With agriculture, land-use change, and forestry responsible for over 60% of national emissions, these sectors are expected to play a central role in generating credits eligible for compliance alongside industrial decarbonisation.
In the voluntary carbon market, Indonesia set ambitious targets at COP30, targeting USD 1 billion in carbon credit sales from 90 million tonnes across forestry, energy, and industry projects. The country secured a mutual recognition agreement with international carbon standard Verra4 for 50 million tonnes of credits and signed a memorandum of understanding with the Integrity Council for the Voluntary Carbon Market (ICVCM) to ensure quality alignment. With 13.4 billion tonnes of potential worth USD 2.8-8.6 billion annually by 2050, Indonesia is positioning itself as Asia’s carbon credit supplier.
Several other countries announced voluntary market initiatives. South Korea plans to establish a credit issuance body next year for a high-integrity global voluntary carbon market aligned with Paris Agreement standards. These announcements built on momentum from earlier this year, when Kenya, Singapore, and the UK launched The Coalition to Grow Carbon Markets in June 2025, a government-led initiative to strengthen voluntary demand for high-integrity carbon credits and provide businesses with consistent guidance across jurisdictions.
This increased supply activity comes as corporate buyers become more sophisticated. SE Advisory Services ‘Carbon Credit Outlook 2025’ found that 55% of companies plan to scale carbon credit purchases by 2030, but they are increasingly selective. The International Carbon Reduction and Offset Alliance (ICROA), which sets best-practice guidelines for the voluntary carbon market, has become a key quality benchmark; 66% of companies now require credits from ICROA-endorsed standards.
For SE Advisory Services’ clients, these developments raise practical questions: how to build carbon credit portfolios that balance cost, quality, and impact; whether to secure long-term supply agreements or maintain flexibility as standards evolve; and how voluntary strategies might need to adapt if compliance requirements expand. As both markets mature, the key is developing approaches robust enough to deliver value regardless of how frameworks shift.
The Loss and Damage Response Fund5, established at COP27 in Egypt to address the irreversible impacts of climate change in vulnerable nations, has taken concrete steps toward operationalisation with the Barbados Implementation Modalities; USD 250 million in grants for 2025-2026. Its first replenishment process won’t begin until 2027, highlighting the persistent gap between climate impacts already occurring and available financial support.
In January 2025, the Adaptation Fund and the Fund for responding to Loss and Damage signed a framework for cooperation6: a tacit acknowledgment that adaptation and loss and damage are, as one fund head put it, “two sides of the same coin.” The logic is straightforward: inadequate adaptation financing today creates larger loss and damage bills tomorrow. Yet this coordination emerges against a backdrop of deepening disagreements over how to fund and measure adaptation itself.
The Global Goal on Adaptation discussions reveal a fundamental divide rooted in the complexity of measuring adaptation progress itself. Unlike mitigation, which can be quantified through greenhouse gas metrics, adaptation encompasses diverse outcomes across vastly different contexts; from drought-resistant crops in the Sahel to coastal infrastructure in small island states.
The African Group, the 54-nation negotiating bloc representing the continent, argues that existing indicator frameworks inadequately capture these regional realities and proposes a two-year working group to develop more contextually appropriate measures before finalising decisions at COP32 in 2027. The EU pushes for immediate progress, demanding at least one indicator per target be approved at COP30. This isn’t merely procedural; it reflects deeper disagreements about whether standardised global metrics can meaningfully capture adaptation success across radically different vulnerabilities and geographies.
The financing disputes compound these tensions. Developing nations demand that developed countries triple their collective adaptation contributions between 2025 and 2030. The Arab Group, representing 22 Arab League nations, specifically proposes adaptation financing should equal half the New Collective Quantified Goal (NCQG)7, the post-2025 climate finance target replacing the USD 100 billion annual commitment. This would mean approximately USD 150 billion for adaptation. European negotiators have firmly rejected both proposals, exposing the persistent gap between adaptation needs and available finance.
Yet adaptation is slowly moving forward where it matters most. Belém Action Plan for Health represents a watershed moment, the first international climate adaptation document dedicated specifically to health. This isn’t a tangential concern; it is the recognition that climate change is fundamentally a health crisis. Heat waves impacting thousands from Pakistan to Phoenix, dengue and malaria reaching higher altitudes and latitudes, air pollution choking cities across Asia, Africa, and Latin America. These aren’t future risks but present realities.
For businesses, the message is unambiguous: adaptation planning cannot wait for global consensus. Companies are already prioritising climate-risk and supply chain vulnerability assessments, climate-adjusted infrastructure investments, and workforce heat stress protocols. The private sector is beginning to understand what negotiators struggle to formalise; that protecting human health and maintaining operational resilience are inseparable from climate adaptation. They are adapting because they must, not because international agreements are clear.
The week before COP30, São Paulo’s Climate Implementation Summit8 revealed the scale of investable opportunities. The Climate Bonds Initiative9 mapped USD 4.4 trillion in climate-aligned investments across just 12 economies through 2035. Brazil alone represents USD 141 billion in forest restoration opportunities over three decades – concrete projects with defined pathways, not theoretical potential.
Brazil’s financial framework is rising to meet this opportunity. The Brazilian Sustainable Taxonomy10, approved in August 2025, integrates climate, nature, and social dimensions to guide capital flows. The country’s third sovereign sustainable bond issuance during COP30, raising USD 2.25 billion, demonstrates market appetite. The Principles for Taxonomy Interoperability11, launched at the São Paulo Stock Exchange on 11 November 2025, aim to harmonise global frameworks and reduce fragmentation.
This momentum comes as established markets send mixed signals. The European Parliament voted to reduce reporting requirements under the Corporate Sustainability Reporting Directive (CSRD) and narrow the EU Taxonomy’s scope, citing burden reduction and simplification. This divergence, emerging markets building frameworks while developed markets pare them back, creates complexity for multinational businesses operating across jurisdictions.
The trajectory is clear: sustainable finance is becoming simply finance. The distinction between “green” and “traditional” investment grows increasingly artificial as climate risk becomes investment risk, and sustainability metrics become standard due diligence.
This convergence was evident during the CNI panel on climate governance moderated by Mathieu Piccin, Sustainability Business Director for Latin America at SE Advisory Services, where financial institutions discussed how they are actively shaping the transition through climate governance and capital allocation rather than waiting for regulatory mandates. The frameworks being built today will determine how quickly this integration happens.
SE Advisory Services’ report in partnership with Spainsif – ‘Financing and Investment: Horizons in Biodiversity 2025’, reveals financial institutions globally are already developing distinct biodiversity strategies despite data gaps and unclear metrics. For corporations, this signals a fundamental shift: biodiversity impacts are moving from reputational concerns to material factors affecting capital access. Banks are beginning to integrate nature-related risks into lending criteria, while asset managers deploy sophisticated models quantifying nature risks across portfolios. Companies with high nature dependencies need to reassess their operations through a financial risk lens. Biodiversity assessment is set to become as routine as credit analysis within this decade.
COP30’s location in the Amazon has brought equity tensions into sharp relief. Indigenous groups, including members of the Munduruku people, have staged protests at venue gates, calling for greater inclusion in climate negotiations. With 29 Indigenous territories in the Amazon awaiting demarcation, the disconnect between those who protect forests and those who negotiate their future has become visible.
The Belém Declaration on Combating Environmental Racism, adopted at the Belém Climate Summit on 7 November 2025, acknowledges what frontline communities have long understood: climate impacts are neither equally distributed nor politically neutral. For businesses operating in or sourcing from these regions, genuine engagement with local communities becomes essential to sustainable operations. The stakeholder complexity extends far beyond boardrooms and negotiation halls.
The tensions between inclusion and action find resolution in concrete initiatives. The Belém Declaration for Green Industrialisation, backed by over 35 countries and the United National Industrial Development Organization (UNIDO), targets heavy industry decarbonisation (i.e., steel, cement, chemicals) while ensuring job creation. The Vice President of Brazil, Geraldo Alckmin, emphasised that climate goals require real economic transformation. Schneider Electric’s research with Brazil’s Ministry of Development, Industry, Trade, and Services, announced at COP30, maps practical pathways for this transformation, highlighting the country’s strategic advantages – from its clean energy matrix to green hydrogen potential in leading global industrial decarbonisation.
Separately, the Global Initiative on Jobs & Skills for the New Economy, launched earlier in the week by COP30 CEO Ana Toni, mapped the employment opportunity: 375 million potential new jobs in the next decade from climate transition, with adaptation investments alone generating 190-375 million positions. Yet less than 0.5% of climate financing targets workforce development, showing a critical gap.
Schneider Electric’s research with consultancy Systemiq, also announced at COP30, reinforces the scale of this opportunity, projecting 760,000 new bioenergy jobs in Brazil by 2030 alone, while emphasising the urgent need to train professionals in the automation and electrification skills that industrial decarbonisation requires.
The implementation challenge extends beyond industrial transformation. The AI Climate Institute (AICI), launched at COP30, aims to equip developing countries with skills to harness AI for climate action. The initiative will provide training programmes for policymakers and technical professionals, focusing on building resource-efficient AI applications suitable for local contexts across the Global South.
This recognition of AI’s role in climate action aligns with our own approach. Our announcement of an AI-native ecosystem for sustainability management demonstrates how we are helping clients worldwide navigate complexity through technology. The vision is collaborative intelligence: Agentic AI working alongside human experts as a digital teammate, creating a force multiplier where complex analysis is automated, freeing consultants and clients to focus on strategic initiatives.
COP30 marks a shift from pledges to execution. The symbolism of meeting in the Amazon, where global climate regulation happens naturally, underscores how far human systems lag behind natural ones. While the forest efficiently captures carbon and regulates rainfall across continents, our negotiations grapple with the inherent complexity of translating climate science into coordinated global action.
President Lula’s characterisation of this as the “COP of truth” proves prescient, though perhaps not as intended. The truth emerging from Belém is neither triumphant nor catastrophic but pragmatically complex. Progress is real but insufficient; finance is flowing but not fast enough; private sector engagement is growing but requires clearer incentives and policy frameworks.
The 60-hour river journey by Indigenous leaders along the Tapajós River, following the same route used to export agricultural commodities, embodies the tensions between development models and ecological imperatives that COP30 must reconcile. Here in the Amazon, the disconnect becomes stark: negotiating climate futures in a forest that already demonstrates how to regulate them.
As we await the conference’s final week, the focus remains on advancing the patient work of implementation that climate science demands. Each COP builds on the last, creating momentum even when breakthroughs seem elusive. For our clients, the message from Belém is clear: the era of climate planning is yielding to the age of climate execution.
The Amazon watches, and waits, as negotiators work to transform promises into measurable atmospheric change. In this “COP of truth,” implementation is the only metric that ultimately matters.
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