The number of funds with biodiversity-related themes on Phenix Capital’s Impact Database now stands at 972, representing 55% growth since 2017.
The number of funds targeting biodiversity-related themes has grown by 55% since 2017, according to the latest report from Phenix Capital Group.
Of the 2,200 funds on the Amsterdam-based investment consultancy’s Impact Database, 972 have biodiversity-related themes, with 51% of those (493) currently open for investment. The number of biodiversity funds open for investment totals 361. Total capital of €207bn has been raised towards biodiversity-related themes, while the total target size for funds still open for investment is €88bn.
Despite the uptick in investment, there is still plenty for the private sector to do if UN Sustainable Development Goals (SDGs) relating to biodiversity loss are to be met.
Over 80% of financing for nature-based solutions comes from governments with only 17% ($26bn) coming from the private sector, Phenix notes, citing a UN Environment Programme report on the State of Finance for Nature.
Climate, biodiversity, and land degradation goals would be unattainable unless annual investments into nature-based solutions more than doubled to $384bn/year by 2025 from the current $154bn/year, the report says.
Beyond SDG 5
Phenix’s analysis goes beyond funds targeting SDG 15 – which covers protection and sustainable use of terrestrial ecosystems and forests, the reversal of land degradation and biodiversity loss – to include those whose primary goals include SDG 14 (life below water) SDG 2 (zero hunger) and SDG 6 (clean water and sanitation).
“Practically every SDG is touched by biodiversity. For this reason… we take a closer look at those focusing on a wider selection of SDGs rather than just SDG 15,” Phenix says.
The goal most commonly targeted is SDG2 on hunger which is a target for 678 funds – that reflects the role of the global food system as the primary driver of biodiversity loss. SDG 6 on clean water and sanitation has 299 funds. SDG 15 is covered by 242 funds, investing in sub-themes such as conservation and biodiversity and forestry management.
Phenix notes that SDG 14 is an objective for only 133 funds, despite covering important biodiversity-related themes such as ocean preservation, small-scale fisheries and sustainable aquaculture.
Among biodiversity-related impact funds targeting SDG 14 and 15, real assets is the leading asset class, with 123 funds in total, and assets of €22.6bn. The real asset fund strategy is most popular in Oceania (64%), Central and South America (57%) and North America (51%).
For SDGs 14 and 15, private equity is the most popular asset strategy in Europe (54%), Middle East & Africa (48%) and Asia (43%), with €7.9bn invested in 100 funds. The average fund size for the 34 public equity funds is €905m, which collectively raised €30.8bn.
Public debt targeting these two goals, while only 46 having funds, raised €16.7bn, with an average fund size of €363m, largely due to the popularity of green bonds, Phenix said.