Trillions Against Nature: Why Global Finance Still Fuels Environmental Destruction

The State of Finance for Nature 2026 finds that global finance overwhelmingly rewards activities that destroy nature, with US$7.3 trillion flowing to harmful sectors in 2023 compared with just US$220 billion invested in protecting and restoring ecosystems. It argues that the solution is not more money, but redirecting existing public and private finance away from nature-negative activities toward a nature-positive economy.

The world is running an ecological deficit, and the warning lights are flashing. The State of Finance for Nature 2026, produced by the United Nations Environment Programme together with Global Canopy, the Economics of Land Degradation Initiative, the Frankfurt School of Finance and Management, and the Helmholtz Centre for Environmental Research, shows that nature is being steadily degraded by the global financial system rather than protected by it. Although nature underpins about half of global economic output, investment patterns still treat ecosystems as expendable. The result is a widening gap between what the planet needs and where money actually flows.

Trillions flowing in the wrong direction

The numbers are striking. In 2023, around US$7.3 trillion in public and private finance went into activities that damage nature, including fossil fuels, industrial agriculture, mining, construction, utilities and transport. In the same year, investment in nature-based solutions, projects that protect, restore or sustainably manage ecosystems, reached only US$220 billion. That means more than thirty dollars were spent harming nature for every dollar spent fixing it. This imbalance matters because ecosystems are already under severe stress: wildlife populations have collapsed since 1970, and most planetary boundaries that keep Earth stable for human life have been breached.

How governments and markets drive damage

Public policy plays a major role in keeping this system in place. Governments still provide about US$2.4 trillion a year in environmentally harmful subsidies. Nearly half of this goes to fossil fuels, while the rest supports agriculture, water use, transport, construction and fisheries. These subsidies often lower costs for polluting activities, making them more attractive to private investors. Even when governments pledge to protect biodiversity, budget systems continue to reward practices that degrade land, water and ecosystems.

Private finance reinforces the problem. Roughly US$4.9 trillion in private capital flowed into nature-negative activities in 2023, mainly through bank loans and bonds. Utilities, heavy industry, energy and basic materials absorb most of this money. While investment in oil and gas has fallen in recent years, overall private finance harmful to nature has barely declined. This shows that nature-related risks are still not fully priced into financial decisions.

Nature-based solutions: growing, but still small

There is some progress. Finance for nature-based solutions has increased slowly over time, led mainly by public spending. Governments invested heavily in biodiversity protection, ecosystem restoration, sustainable land use and water management in 2023. Asia, North America and Europe accounted for most of this spending, while many lower-income regions saw declines, highlighting global inequality in access to nature finance.

International public finance through development aid reached about US$6.8 billion and remains vital for poorer countries, even though it is small compared to overall needs. Private finance for nature-based solutions is even smaller, at US$23.4 billion. It flows through tools such as biodiversity offsets, certified supply chains, green and sustainability-linked bonds, philanthropy and carbon markets. These instruments can help, but the report warns that many mainly compensate for damage rather than create truly positive outcomes, and some markets still struggle with trust and transparency.

Turning the wheel towards nature

The report’s central message is that fixing the problem is not about finding new money, but about redirecting existing flows. It introduces the “Nature Transition X-Curve”, which shows the need to do two things at once: rapidly phase out finance that harms nature, and scale up investment that restores it. This requires reforming harmful subsidies, making companies and banks disclose their impacts on nature, and aligning financial rules with environmental goals.

If finance continues on its current path, nature loss will accelerate, bringing higher economic and social costs. But if governments and markets change course, the same financial system could support a trillion-dollar nature transition economy, one that protects ecosystems, reduces risk and supports long-term prosperity.