EMEA asset owners turn to nature-linked bonds for positive outcomes and returns

A new survey* reveals that many asset owners in EMEA are integrating nature and biodiversity into their investment strategies. Labeled bonds are one possible avenue, offering the potential to advance sustainability goals alongside financial returns.

Our survey indicates that respondents are showing an interest in nature- and biodiversity-linked financial instruments. Among those already integrating nature and biodiversity, 40 percent are prioritizing or planning to prioritize such investments in the coming year.

The interest from investors comes alongside a funding gap in the biodiversity space, a topic that is expected to be a key focus at the upcoming COP 30 in Brazil. A major 2024 report by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) highlights an annual “biodiversity financing gap” of up to US $1 trillion.¹

Thoughts from the field: AP2

“The science tells us that there is huge financial risk going forward, if biodiversity loss is not halted,” says Åsa Mossberg, Head of Communication and Sustainability at AP2, the Swedish pension fund. “The global economy is hugely dependent on biodiversity and ecosystem services.” The World Economic Forum estimates that over half of global GDP could be potentially at risk from biodiversity loss.and Sustainability. ²

Recognizing deforestation as a key risk, AP2 developed a comprehensive investment strategy, Mossberg explains. This multi-pronged approach involved engaging with companies to understand their exposure and strategies related to deforestation, and increasing investments in funds that deliver positive outcomes for forests.

“ Previously, there was much more focus on the climate space. But biodiversity-focused investable options are starting to emerge now, ” says Mossberg. Industry data showed a surge in biodiversity-related bond issuance in 2024, accounting for almost one-third of total sustainability-labeled debt, up from just 3 percent in 2015.³

Investing in nature and biodiversity

In the survey, 38 percent of respondents who currently integrate nature and biodiversity indicate that the limited availability of investable nature or biodiversity-focused options remains a barrier to incorporating biodiversity objectives in their investment process. Investment in labeled bonds, such as green and sustainability bonds that earmark proceeds for use in projects that support biodiversity or other initiatives, have been particularly important in providing investors with options. Moody’s estimates that 23% of the global US $1 trillion sustainable bond market is now linked to adaptation and nature-related projects.⁴

More on nature-linked debt

Sustainability-labeled bonds focused on nature and biodiversity are still one of the more nascent categories of the space, but some trends have emerged:

• Sovereigns and institutions such as the EU and the World Bank account for about two-thirds of all biodiversity-related debt issuance, according to the Institute of International Finance (IIF).⁵ In August 2024, the World Bank launched its nine-year, US $225 million Amazon Reforestation-Linked Outcome Bond, the largest biodiversity-focused outcome bond issued to date. It will mobilize US $36 million of capital from investors to support reforestation.⁶ The Rhino Bond, launched by the World Bank in 2022, is a US $150 million instrument linking investor returns to verified black rhinoceros population growth in South Africa.⁷
• Blue bonds are a fast-growing category of the Green Bond Principles. Blue bonds raise funds for projects that support ocean health and marine ecosystems⁸ . Following ratification of the Biodiversity Beyond National Jurisdiction (BBNJ) Agreement—also known as the High Seas Treaty—in 2023, investor interest has sharpened. The World Bank reported in June 2025 that the global blue bond market had grown to a total value of US $15.25 billion, up from US $6.7 billion in 2023.⁹
• Market demand for blue bonds looks set to continue. The survey finds that as many as 39 percent of survey respondents who currently incorporate nature and biodiversity objectives indicate that they are prioritizing or will prioritize investments in sustainable aquaculture and marine ecosystems over the coming 12 months.

Metrics and transparency

Our survey finds that only 21 percent of surveyed investors who are integrating nature and biodiversity regard a lack of clear definitions around biodiversity-related investing as one of the three biggest barriers to increased activity. This compares to 42 percent who cited lack of reliable and/or scalable data, and 39 percent citing lengthy timelines related to environmental or financial benefits as more significant barriers. One reason may be the recent development of a range of standards and definitions, such as the EU taxonomy for sustainable activities, that may bring further clarity to the market. But some research has raised concerns about whether funds raised by labeled bonds are going to broader climate-related initiatives, rather than dedicated biodiversity projects.¹⁰

Recent months have seen key institutions taking steps to address such issues. The International Finance Corporation (IFC), the World Bank’s private-sector arm, in October 2024 launched its Biodiversity Finance Metrics for Impact Reporting to supplement its core Reference Guide, to improve guidance on the eligible activities that constitute biodiversity finance.¹¹

New bond issuance programs have also emphasized transparency. In July 2025, for example, the Inter-American Development Bank (IDB) launched its US $1 billion Amazonia Bonds program, targeting projects in the Amazon that curb deforestation, protect biodiversity and support local communities.¹² Building on issuance guidelines developed with the World Bank, the IDB promises to deliver transparency around use of proceeds, which should, as noted by IDB President, Ilan Goldfajn, give investors “the confidence that their financing will drive real impact.”¹³

The bottom line

Our survey shows that a substantial minority of EMEA investors are prioritizing nature- and biodiversity-labeled bonds, likely driven by the potential to generate nature-positive outcomes alongside financial returns, and the emergence of innovative instruments such as outcome bonds and blue bonds, amongst other reasons. New frameworks and transparency initiatives, led by institutions including the World Bank and IDB, will likely help to expand the market.