As biodiversity rises on the agenda of regulators and financial institutions, the demand for reliable data and analytical tools has been met with a range of emerging solutions, each requiring critical discussion and validation. Over two days in October, more than 120 academics and experts from finance and ecology convened at Singapore Management University for a cross-disciplinary dialogue on integrating ecological complexity into financial analysis and economic decision-making. We bring you a rundown of the workshop highlights.
Welcome Address Prof Bert de Reyck (Dean, SMU Lee Kong Chian School of Business)
The Dean welcomed the workshop as a timely opportunity to strengthen collaboration between ecologists and finance experts, with the aim of quantifying business impacts on nature, assessing the economic consequences of biodiversity loss, and developing tools for stress-testing and capital allocation.
He reaffirmed SMU’s strong commitment to sustainability and its growing leadership in sustainable finance research through SGFC. Situated in a biodiversity-rich region, SMU is well-positioned to advance dialogue and innovation at the nexus of nature and finance.
Day 1 – Keynote Speech: “Biodiversity and Finance” Prof Franklin Allen (Imperial College London) / Chair: Prof Zhang Hong (SMU)
Mobilising finance for biodiversity presents economic, ecological, and institutional challenges that contrast sharply with the more mature field of climate finance. Unlike climate markets, which benefit from clearer metrics and aggregation, biodiversity is inherently more complex and less standardisable, yet no less vital.
Central to this discussion is the Kunming-Montreal Global Biodiversity Framework, often described as biodiversity’s equivalent of the Paris Agreement. Under this framework, nations are committed to restoring 30% of degraded ecosystems, mobilising USD 200 billion annually by 2030, and reforming USD 500 billion in nature-harmful subsidies. Yet, many governments remained financially constrained and politically divided on biodiversity funding.
Historical and contemporary examples illustrate the stakes. From the near-extinction of the American bison and the restoration of its genetic integrity in Yellowstone to the habitat loss threatening orangutans in Southeast Asia, these stories reveal biodiversity’s deep ecological, cultural, and moral significance.
Turning to the design of finance instruments, the nascent sector of biodiversity credits remains limited, with voluntary credits so far accounting for only USD 325,000 to USD 1.87 million in cumulative sales. Compared with voluntary carbon offsets, often criticised for their limitations, credits incorporating biodiversity add-ons, such as CCB co-benefits have demonstrated resilience to market scrutiny.
Biodiversity markets face significant scale and liquidity constraints due to the high heterogeneity of species, genetics, and ecosystems, making institutional models more promising than open markets. Specialised institutions can raise deposits or issue securities while applying domain expertise to evaluate projects, supported by governments through enabling policy and oversight, though private capital must lead where public budgets and political will are insufficient.
Debt-for-nature swaps and regulatory mandates could serve as key tools and essential complements to financial innovation, exemplified by the Galápagos Blue Bond model and regimes such as the UK’s requirement for developers to deliver net biodiversity gain (e.g. 110% of baseline).
Constrained public budgets make private capital indispensable. Creative approaches in impact investing, biodiversity-linked securities, blended finance, and other mechanisms can allow finance not merely to support but to actively drive conservation outcomes.
Session 1: Measuring the Impact of Business on Nature Chair: Prof Lou Yun (SMU)
“Quantifying and Valuing Biodiversity Impact of Business” Prof Hao Liang (SMU)
Leveraging the Global Impact Database on Biodiversity to measure and monetise business impacts, an investigation of a Southeast Asian agri-food company revealed that 70% of its total biodiversity footprint occurs in the upstream value chain, primarily driven by land use for agriculture. For a global portfolio valued at $10 billion, $2.6 billion of impact was attributed to biodiversity loss.
These valuation results offer actionable insights for investors, enabling the use of integrated impact metrics for portfolio inclusion, benchmarking against peers, and evaluating engagement opportunities by distinguishing direct and indirect value chain impacts.
“Drivers and Solutions to Southeast Asia’s Biodiversity Crisis – A Focus on the Agribusiness” Prof Janice Lee Ser Huay (NTU)
Southeast Asia’s biodiversity faces urgent threats from land-use change, which accounts for 85% of pressures, alongside logging (66%) and infrastructure development such as dams and mining (51%). These threats manifest differently across nations, with remote and less accessible areas ironically offering greater protection from logging and other human activities. Agribusiness, particularly palm oil, rubber, and pulp and paper, amplifies these pressures across landscapes.
Addressing the crisis requires a combination of strategies, including expanding protected areas, implementing landscape-level approaches through corporate sustainability pledges and certifications such as RSPO for palm oil, and deploying nature-based climate solutions and payments for ecosystem services. Efforts are often constrained, however, by limited funding, weak political commitment, and perverse subsidies, requiring coordinated action to align conservation with economic and development priorities.
Session 2: The Economic Impact of Nature Loss Chair: Prof Yao Tianhao (SMU)
“Trade, Trees, and Lives” Prof Eric Zou (U Michigan)
Brazil’s transition from traditional crops to soybeans and other exports drives deforestation and downstream health impacts. Satellite imagery and a shift-share model show that each 1,000 BRL increase in per-capita export corresponds to a 0.174 percentage-point loss in forest cover, predominantly in savannah regions.
Deforestation-driven air pollution, modelled using downwind indices, contributes to elevated cardiovascular mortality, imposing a health burden of 0.18 statistical life units per USD 1 of agricultural exports. Addressing these environmental health impacts could involve strategies such as phytoremediation, which absorbs and filters pollutants, though challenges remain in disentangling local pollution sources and welfare gains per export dollar.
“The Political Economics of Nature” Prof Cara Vansteenkiste (U Sydney)
Analysis of corporate charitable giving reveals how firms influence local biodiversity regulation. Mapping donations against first-time protected area designations shows that firms, particularly in the chemical industry, increase contributions to NGOs in the year preceding PA establishment.
Distinguishing pre-designation giving as regulatory risk management and post-designation giving as reputational risk mitigation indicates that donations via biodiversity NGOs shape both the timing and scale of local conservation mandates, with significant implications for policy design and corporate accountability.
Session 3: Valuation, Stress Testing, and Scenarios Chair: Simone Cenci (UCL)
“Exploring Endogenous Feedbacks in Nature” Prof Enrico Biffis (Imperial)
Existing biodiversity metrics often emphasise losses while overlooking gains and the effects of invasive species, limiting their usefulness in capturing the full dynamics of ecosystems. Incorporating spatial dimensions into models can offer a more accurate picture, as seen in patterns of tree mortality under water stress in Amazonian regions. Building on approaches from climate scenarios such as the NGFS, there is scope to develop richer datasets and models that reflect the feedback loops between nature and climate. Tools such as climatic safety margins have demonstrated their application in Southeast Asia for assessing resilience.
“Measuring the Value of Biodiversity Through Ecosystem Function: Southeast Asia as a Case Study” Olivia Morris (Imperial)
Biodiversity underpins ecosystem functions, with Southeast Asia, home to roughly 20 percent of global vertebrates and plants, offering a critical case study. Despite sparse data, AI-assisted literature filtering reduced 5,000 papers to 700 relevant studies, revealing a strong positive relationship between biodiversity and ecosystem functions in the region, particularly for carbon sequestration and primary productivity. Much of the existing research remains biased toward habitat and maintenance metrics, revealing the need for future studies to examine species richness, functional diversity, and alternative biodiversity indicators.
“Unpacking the Assetization of Nature: From Fishing Quota to Biodiversity Credits” Prof Simon Schillebeeckx (SMU)
Through assetization, natural resources and ecosystem services can be formalised and structured as financial assets. Historical examples and artificial intelligence analysis identify six stages in asset creation: problem identification, experimentation, legitimation, institutionalisation, financialisation, and market stabilisation. Legitimacy requires alignment across physical, legal, and epistemic dimensions. New Zealand’s individual transferable quotas in fisheries illustrate how similar models could inform the design and governance of biodiversity credits.
Session 4: Carbon Markets and Biodiversity Credits Chair: Simone Cenci (UCL)
“Ecological Integrity of Avoided Deforestation Carbon Projects” Prof Yiwen Zeng (NTU)
Findings from a global study on the ecological integrity of avoided deforestation projects reveal varied outcomes across 116 sites worldwide. Applying a multi-indicator approach using datasets such as the Forest Landscape Integrity Index, nine projects improved ecological conditions, 29 showed no significant change, nine experienced worsened conditions, and 46 showed mixed results.
Projects combining legal protection with external funding performed best, indicating that maintaining ecological integrity depends on robust evaluation mechanisms that measure both carbon reductions and biodiversity outcomes, consistent with the goals of the Global Biodiversity Framework.
“Accounting for Biodiversity Using the Climate, Community and Biodiversity (CCB) Standards: A Case Study from Sabah, Malaysia” Prof Eleanor Slade (NTU)
Climate, Community and Biodiversity (CCB) Standards integrate biodiversity into carbon finance under Verra’s Verified Carbon Standard, providing a framework that links ecological outcomes with financial incentives. Across 24 projects in 48 countries, over 388 million verified CCB units have been issued, often commanding price premiums due to their rigorous auditing and active community engagement.
The Kuamut Rainforest Conservation Project in Sabah illustrates how careful baseline data collection, adaptive monitoring, and local participation can secure long-term biodiversity and livelihood outcomes. By combining robust standards with practical implementation, the CCB framework offers a tested foundation for embedding biodiversity into future crediting schemes.
“Some Ways We Should, and Some Ways We Definitely Shouldn’t, Build a Biodiversity Crediting System” Prof Will Pearse (Imperial)
Designing biodiversity credit systems involves navigating complex conceptual challenges, as ecological processes unfold along a space-time continuum where competition, dispersal, and speciation operate across varying spatial and temporal scales. The Supertree Grove in Singapore illustrates how biodiversity must be understood in context rather than through static species counts, while uniform metrics, such as offsetting coral reefs with forests, risk ignoring underlying ecological dynamics and producing harmful outcomes. This tension reflects the mismatch between finance, which operates globally and instantaneously, and biodiversity, which is inherently local and temporally constrained. Linking these systems effectively requires contextual, multi-metric approaches that integrate ecological understanding with financial innovation.
Day 2 – Keynote Speech: “Sustainability and the Economics of Biodiversity” Prof Simon A. Levin (Princeton University) / Chair: Prof Holly Yang (SMU)
Economic systems often fail to recognise nature’s intrinsic value, undermining efforts to sustain the biosphere. Traditional discounting mechanisms systematically undervalue future environmental benefits, highlighting the need hyperbolic discounting approaches and inclusive wealth formulae that account for natural capital depletion alongside economic output. Insights from complex adaptive systems theory reveal how small-scale changes can cascade into system-wide ecological collapse, producing warning signals such as critical slowing down, increasing variance, and flickering effects.
Despite these challenges, there are opportunities for meaningful engagement with multinational corporations, which increasingly recognise that environmental degradation affects their bottom lines and short-term interests, as well as long-term ecosystem sustainability. Achieving a sustainable biosphere requires fundamental shifts in how finance markets value ecological assets.
Session 5: Models for Nature-Related Risk Assessment Chair: Terry van Gevelt
“Ensemble-Based Risk Assessment for Southeast Asian Ecosystems” Minxue Tang (Imperial)
Wildfire risk modelling research for Southeast Asia challenges the common misconception that human activity is the primary driver of fire proliferation. While human actions often provide ignition sources, the spread of fire depends more fundamentally on fuel availability and ecosystem dryness than on ignition patterns. The analysis employs the P-model to estimate plant growth, offering insight into how much vegetation is available to burn. These growth estimates, integrated with moisture and other environmental data, feed into the HATS fire model to forecast wildfire risk.
Using large climate ensemble datasets, the framework generates probabilistic fire scenarios that successfully reproduce major events such as those of 1997 and 2015. Even under high mitigation conditions, projections indicate a significant increase in burned area across Southeast Asia, with particularly concerning implications for Indonesia.
“Uncertainty in Conservation and Restoration Baselines” Prof Alexander Ruggles Cobb (NTU)
Baseline uncertainty presents a critical challenge in valuing conservation projects, as limited confidence in projected climate impacts undermines trust in carbon markets. Current methodological approaches often rely on deterministic projections based on historical deforestation rates, which fail to capture the inherent variability of future land use. In contrast, ensemble-based approaches that incorporate multiple baseline scenarios may provide more robust estimates by drawing evidence from observed land change patterns across similar landscapes.
This uncertainty directly affects market outcomes, contributing to the persistent underpricing of conservation credits. Treating baseline determination as a public good allows risks to be systematically characterised, enabling more accurate pricing while fostering coordinated collaboration that ensures market mechanisms capture the full complexity of conservation valuation.
Session 6: Industry Panel – How to Make Nature Bankable?
Chair: Nikki Kemp (SMU)
Panellists:
Ann-Marie Wun, Head of Sustainable & Impact Client Solutions (APAC), Goldman Sachs Asset & Wealth Management
- Audrey Lim, Director of Nature Finance, Standard Chartered
- Melissa Moi, Head of Sustainable Business, UOB
- Megan Roux, Manager, Impact Institute
While nature is theoretically bankable, achieving consistent, actionable investment requires addressing substantial practical and data-related hurdles.
Assessing Bankability and Risk
Nature is increasingly recognised as financially material and, therefore, bankable, yet its complexity complicates risk assessment. Financial institutions are beginning to apply a combination of materiality lenses and geospatial tools to identify opportunities and risks in emerging areas such as sustainable agriculture. Bankability hinges on consistent cash flows, scalable products, and the capacity to quantify both risk and revenue, but these elements remain difficult to standardise across diverse projects. Clear communication with stakeholders is critical, simplifying the narrative to demonstrate the relevance of nature to client bottom lines. A structural challenge persists in aligning banks’ short-term return expectations with the long-term horizons typical of nature projects, highlighting the need for innovative approaches to reconcile these temporal mismatches.
The Critical Role of Data and Standards
Reliable, standardised data remains a major constraint, as nature is inherently localised and complex. Limited data availability makes it difficult to evaluate and quantify project risks, prompting banks to adopt scenario analyses on existing portfolios as a bridge while broader datasets are developed. Technological solutions, including AI, satellite imagery, and drone-based monitoring, offer potential to improve the measurement of biodiversity and ecosystem services. Balancing the need for action with incomplete data requires accepting some uncertainty while continuing to refine standards and analytical capacity.
Financing Mechanisms and Scaling Solutions
Scaling investment in nature depends on innovative financing structures. Blended finance, debt-for-nature conversions, and aggregated small-scale deals allow banks to pool risk, share knowledge, and lower transaction costs. For example, Standard Chartered’s involvement in a debt conversion project is expected to generate USD 124 million for marine conservation in The Bahamas. While these solutions are currently implemented on a limited scale, often through philanthropic arms, they illustrate pathways for bridging green finance with practical, scalable investment models. Expanding such mechanisms will be essential to translate theoretical bankability into consistent, meaningful capital flows for nature-based solutions.
Session 7: Policy Panel – Building an Enabling Ecosystem for Biodiversity Finance & Investment
Chair: Mandy Tham (SMU)
Panellists:
- Mervyn Tang, Head of Sustainability APAC, Schroders
- Steve Kim, Asia-Pacific Regional Counsel, Conservation International
- Ashley Brosnan, Diplomat, Australian Department of Foreign Affairs and Trade
- Theodor Cojoianu (SMU)
A central challenge in mobilising finance for nature is defining high-quality biodiversity investments.
Defining High-Quality Biodiversity Investment
Unlike established asset classes such as equities or fixed income, clear and widely accepted metrics are lacking, making project evaluation difficult. Investment committees often struggle to assess project quality due to limited biodiversity metrics, while quality assessment must account for diverse factors, including project-specific risks and benefits. Governments can play a pivotal role in building long-term market trust, acting as market makers by co-investing with private capital to signal quality and catalyse broader participation.
The Challenge of Standardisation and Enabling Policy
Standardising metrics is complicated by the localised and heterogeneous nature of biodiversity across ecosystems and users. No single checklist exists, and metrics must balance clarity with flexibility to accommodate different projects, countries, and market participants. Accepting some imperfection may be necessary to initiate investment flows. Policies must embed long-term resilience and safeguards, recognising both political volatility and the inherent limits of private capital to make “un-bankable” products investable. Profitability remains essential to attract private finance, requiring governments and regulators to create appropriate financial incentives while designing mechanisms such as nature credits to bridge the gap between ecological value and market returns.
The Future Landscape of Biodiversity Finance
Looking ahead, urgency and improved data are expected to accelerate the field. Greater adoption of standards like the Taskforce on Nature-related Financial Disclosures (TNFD) will enhance transparency, enabling better evaluation and comparability of projects. This improved information will likely increase competition for existing concessional funding, highlighting the importance of efficient allocation. The continuous development of more robust and accessible data will underpin better decision-making, enabling private and public actors to channel investment effectively into biodiversity and nature-based solutions.
Session 8: The Nature Premium Chair: Simone Cenci (UCL)
“The Climate-Biodiversity-Pollution Nexus: The Pricing of Environmental Credit Risks for European Industrial Polluters” Prof Theodor Cojoianu (SMU)
Industrial pollution poses significant risks to biodiversity, yet financial markets have only recently begun to account for these impacts. Analysing loan and emissions data across European ecosystems, with a focus on freshwater ecotoxicity and the effects of pollutants on biodiversity, shows that banks are adjusting lending terms for high-polluting firms, often through higher collateral requirements. These adjustments demonstrate that biodiversity-related risks are beginning to be priced into markets, highlighting the emerging business case for integrating ecological impacts into financial decisions. While this progress reflects a growing alignment between finance and nature protection, further measures are needed to effectively curb biodiversity loss.
“Nature-positive Real Estate” Katharina Bauer (Impact Institute):
Integrating nature considerations into real estate finance requires moving beyond traditional energy-efficiency measures to address broader climate and biodiversity impacts. Housing, as a materially intensive sector, significantly affects biodiversity yet often remains financially unattractive for investment.
Practical approaches developed with regional banks demonstrate how biodiversity impacts can be measured and managed across the building lifecycle, from material selection and construction to renovation and use. Early evidence indicates that choosing sustainable materials and implementing nature-inclusive measures enhances both biodiversity and climate resilience. Adoption of nature-inclusive packages for homeowners depends on aligning financing solutions with clear benefits, providing a strong business case for sustainability integration.
Closing Remarks Nikki Kemp (SGFC)
Concluding the workshop, Nikki highlighted the progress of the ongoing Nature and Biodiversity Finance Research Project, which began last year and is set to conclude in early 2026. She emphasised SGFC’s commitment to connecting ecological priorities with economic considerations, reaffirming the centre’s role in translating ecological value into financial outcomes. SGFC remains dedicated to supporting pioneering research and strengthening partnerships between academic institutions and industry to drive advancements in biodiversity finance.
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With special thanks to our scribes: Chan Kam Chee (KC) (Research Associate, SGFC), Joshua Andre Banzon (SMU Undergraduate, Ex-President of SMU Sustainable Investment Club), Andrew Brian Tan So (SMU Undergraduate, President of SMU Sustainable Investment Club), Lee Jia Xin (SMU Undergraduate, Research Director of SMU Sustainable Investment Club)
Learn more about the previous editions:
- MIT Sloan School of Management: https://www.linkedin.com/posts/singapore-green-finance_sgfc-representatives-professor-hao-liang-activity-7273240575372333057-aM4I/
- Imperial College Business School: https://www.singaporegreenfinance.com/sgfc-imperial-biodiversity-and-finance-workshop/