Financial institutions in Spain are taking significant steps toward integrating biodiversity into their investment decisions. A recent report by SE Advisory Services and Spainsif reveals that more than 50% of these entities have begun applying exclusion criteria affecting companies involved in environmentally harmful practices, such as unsustainable palm oil production and illegal logging.
The study, titled “Horizons of Financing and Investment in Biodiversity 2025,” emphasizes that despite the progress, only 17% of funding for biodiversity comes from the private sector, suggesting a significant potential in an otherwise underexplored market. There is also a notable discrepancy in the adoption of environmental risk management frameworks; international financial entities in Spain surpass national ones in this aspect.
Among the initiatives being undertaken by local institutions, attention to sustainable forest management and water resources stands out, aiming not just to exclude harmful companies but also to actively invest in the conservation and restoration of biodiversity. However, the pace of progress varies considerably across different market sectors. Equity investment funds are beginning to adopt more established methodologies concerning biodiversity, while private equity is still in its early stages.
To tackle these challenges, the report suggests three main strategies to mobilize private capital: first, use risk management as a starting point; second, promote financing for corporate transitions to more sustainable practices; and finally, create business models that integrate biodiversity conservation with revenue-generating opportunities.
The report also highlights the emergence of innovative financial instruments, such as biodiversity-linked loans, green bonds, and biodiversity credits. Despite these advancements, the lack of data remains a significant challenge that limits global progress in this area. Nonetheless, some institutions are developing metrics and using measurement tools that allow them to move forward without relying on perfect information.
In summary, the analysis concludes that the transition toward investments that benefit nature has begun. Institutions that recognize the importance of incorporating biodiversity into their financing decisions will enjoy a competitive advantage in the future. This effort represents a collaboration between SE Advisory Services’ expertise in corporate biodiversity and Spainsif’s knowledge of the Spanish sustainable investment market, promising a future more committed to sustainability and environmental conservation.
Source: MiMub in Spanish
