Key Impact Points:
- Over $7 trillion in financial flows still fund nature-negative activities annually—overshadowing the $200 billion directed to nature-positive solutions
- UNEP FI and WWF urge inclusion of biodiversity goals in finance taxonomies to align global capital with climate and nature outcomes
- Countries like Colombia and Brazil are leading the way with integrated green taxonomies that de-risk investments and guide sustainable development
Nature and Climate: Two Sides of the Same Coin
Sustainable finance taxonomies are emerging as a critical tool in aligning global capital with both climate and nature goals, according to Sem Houben and Emily Dahl in an opinion piece for the July 2025 edition of OMFIF Sustainable Policy Institute Journal. They warn that ignoring the “climate-nature nexus may expose institutions and societies to financial risks and missed economic opportunities.”
The authors argue that financial institutions must recognize the interdependence of climate stability and healthy ecosystems—and act accordingly.
The Investment Imbalance
Nature underpins over 50% of global GDP—about $58 trillion. Yet each year, $7 trillion is still funneled into nature-negative activities, while only $200 billion goes toward nature-positive ones that build resilience and mitigate climate risks.
“The Paris Agreement and Kunming-Montreal Global Biodiversity Framework already underscore the importance of mobilizing finance for solutions that achieve decarbonization and nature-related goals,” the authors write, “without introducing negative externalities.”
Why Taxonomies Matter
At the heart of this shift are taxonomies—classification frameworks that help define what is considered environmentally sustainable. These tools provide “clarity, transparency and a common language that help de-risk investments and facilitate cross-border financing.”
“More than just classification systems, taxonomies can serve as a menu for investors,” the authors explain.
Colombia’s 2022 green taxonomy, for example—the first in Latin America and the Caribbean—covers not only climate mitigation and adaptation, but also water, soil, pollution, and biodiversity preservation. Designed to be interoperable with the EU taxonomy, it’s seen as a blueprint for integrated sustainable finance strategies.
UNEP FI’s Expanding Role
UNEP FI is accelerating support for countries in developing and refining sustainable finance taxonomies that integrate nature-based criteria. Brazil’s forthcoming taxonomy, for instance, will include explicit biodiversity and ecosystem restoration goals.
Additional initiatives include:
- A biodiversity-specific follow-up taxonomy framework in Latin America and the Caribbean (LAC)
- A regional landscape analysis of ASEAN taxonomies
- Global guidance for regulators and central banks on net-zero and nature-positive taxonomies in partnership with UNEP World Conservation Monitoring Centre and UNEP Economic and Trade Policy Unit
A Global Shift
“Taxonomies are a valuable component” of the sustainable finance toolkit, the authors conclude. By aligning around definitions that support climate goals and protect biodiversity, countries can “unlock the cross-border capital flows required to help economies, nature and societies thrive.”
Related Article: Amita Chaudhury Named Vice Chair of UNEP FI Principles for Sustainable Insurance
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