Spending Against Survival: How Global Finance Continues to Drive Nature’s Decline

The State of Finance for Nature 2026 finds that the world spent US$7.3 trillion in 2023 on activities that damage nature, compared with just US$220 billion on protecting and restoring it, putting economies at growing risk. The report calls for a rapid redirection of finance away from harmful subsidies and investments toward nature-based solutions to secure long-term economic stability and resilience.

The global economy is quietly undermining its own foundations. According to the State of Finance for Nature 2026, governments and financial markets continue to pour vast sums of money into activities that destroy ecosystems, while investing far too little in protecting and restoring nature. Produced by the United Nations Environment Programme with partners including Global Canopy, the Economics of Land Degradation Initiative, the Frankfurt School of Finance and Management and the Helmholtz Centre for Environmental Research, the report shows that this imbalance is no longer just an environmental problem, it is a serious economic risk.

In 2023, finance flows directly harmful to nature reached an estimated US$7.3 trillion. By contrast, investment in nature-based solutions, projects that protect, restore or sustainably manage ecosystems, totalled just US$220 billion. That means the world is spending more than thirty dollars destroying nature for every dollar spent fixing it. Nearly half of global GDP depends on healthy ecosystems, yet the financial system continues to reward activities that degrade forests, soils, freshwater and biodiversity.

Subsidies that lock in environmental damage

Public finance plays a major role in sustaining nature loss. Governments spent around US$2.4 trillion in 2023 on environmentally harmful subsidies, mainly supporting fossil fuels, industrial agriculture and excessive water use. Fossil fuel subsidies alone exceeded US$1.1 trillion, remaining far above pre-pandemic levels despite global pledges to phase them out. Agricultural subsidies tied to fertilisers, pesticides and irrigation continue to encourage practices that degrade land and pollute ecosystems.

While some subsidies fell after the 2022 energy crisis, the report finds that many remain deeply embedded in tax and budget systems. Reforming them is politically difficult, as they often support powerful industries or help keep consumer prices low. But the report argues that poorly targeted subsidies distort markets, drain public budgets and crowd out investment in sustainable alternatives.

Private capital still flows to the wrong places

Private finance is responsible for an even larger share of nature-damaging activity. Around US$4.9 trillion flowed into sectors with high ecological impacts in 2023, including utilities, energy, construction, heavy industry and basic materials such as metals and chemicals. Bank lending is the main channel, particularly for energy and utility infrastructure that places heavy pressure on ecosystems.

Although investment in oil and gas has declined in recent years, overall private finance has not shifted decisively toward nature-positive activities. The report highlights how public subsidies reduce risk and boost returns in polluting sectors, making them more attractive to private investors. This combination of public and private finance locks economies into destructive pathways and delays the transition to more sustainable models.

Nature-based solutions remain underfunded

Nature-based solutions are presented in the report as essential economic infrastructure, not niche conservation projects. These include restoring wetlands to reduce flooding, managing forests to store carbon and protect biodiversity, and improving soil health to support food security. Together, they help address climate change, biodiversity loss and land degradation at the same time.

In 2023, total finance for nature-based solutions reached US$220 billion, with public funding accounting for about 90 per cent. Domestic government spending provided US$190 billion, concentrated in biodiversity protection, sustainable agriculture, forestry and fisheries. While spending increased in regions such as Asia, North America and Europe, it fell sharply in Africa, highlighting persistent global inequalities.

International public finance for nature reached US$6.8 billion. Although growing, this remains small relative to global needs and is under pressure from geopolitical tensions. Private finance for nature-based solutions was just US$23.4 billion, coming mainly from biodiversity offsets, certified supply chains, sustainable bonds and carbon markets. The report cautions that many of these mechanisms compensate for damage rather than deliver truly positive outcomes for nature.

Turning finance toward a nature-positive future

To close the gap, the report introduces the “Nature Transition X-Curve,” a simple idea with big implications. Harmful finance must be phased out at the same time as investment in nature-positive solutions is scaled up. Adding green projects on top of a system that still rewards environmental damage will not work.

Key actions include reforming harmful subsidies, aligning public budgets with biodiversity and climate goals, requiring companies and banks to disclose nature-related financial risks, and expanding blended finance to attract private investment. The report estimates that annual investment in nature-based solutions must rise to US$571 billion by 2030 to meet global commitments.

The message is clear. The world does not lack money, it lacks direction. Continuing to run down natural capital threatens food systems, economic stability and long-term growth. Redirecting finance toward nature-positive outcomes is no longer optional; it is a basic requirement for resilient, inclusive and sustainable economies.