EBRD, MDBs launch biodiversity finance initiative for project due diligence

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Biodiversity finance initiative

Highlights

The EBRD and other MDBs launched a joint biodiversity finance framework at CBD COP17, integrating biodiversity gains into project due diligence and design.
The initiative supports the 2022 Kunming-Montreal Global Biodiversity Framework and offers measurement tools like habitat quality-hectares for tracking outcomes.
EBRD is piloting the framework in live investments such as Dama Solar (Romania), ELMED power cable (Tunisia-Italy), and Chișinău Urban Enhancement Project (Moldova).

Joint framework links due diligence with biodiversity gains

As reported by European Bank for Reconstruction and Development, the new initiative shows how existing environmental and social due diligence can be used not only to avoid environmental harm but also to identify opportunities for positive biodiversity outcomes.

The associated publication, "Identifying Opportunities to Support Biodiversity Objectives Through MDB Operations", is unveiled at the Seventeenth Meeting of the Conference of the Parties to the United Nations Convention on Biological Diversity, CBD COP17, in Yerevan. It draws on MDB experience in biodiversity risk management and sets out practical ways for development banks and their clients to integrate biodiversity considerations into project design and implementation.

The framework outlines three main pathways for biodiversity gains: shaping project pipelines to support biodiversity objectives, using environmental and social due diligence to identify opportunities for positive outcomes for nature, and promoting landscape-, seascape- and system-level approaches to broader environmental challenges. It also points to measurement methods including habitat quality-hectares and the pressure-state-response framework.

Development finance sector tests approach in live projects

The initiative supports implementation of the 2022 Kunming-Montreal Global Biodiversity Framework, which calls for action to halt and reverse biodiversity loss by 2030 and encourages financial institutions to align portfolios with global biodiversity goals. MDBs say the approach can help translate those commitments into practical outcomes without weakening the independence or rigour of environmental and social risk management.

The EBRD is already piloting the model in recent investments including Dama Solar in Romania, the ELMED subsea power cable between Tunisia and Italy, and the Chișinău Urban Enhancement Project in Moldova. Fatoumata Bouaré, the EBRD's vice president and chief risk officer, says the approach is intended to help clients deliver measurable biodiversity benefits across sectors such as infrastructure, energy and transport while also meeting sustainable development objectives.

In our earlier coverage of an Ontario court case over shoreline work along the Sturgeon River, we detailed fines and court-ordered payments after construction activity was found to have damaged endangered Lake Sturgeon habitat within a conservation reserve. The case underscored how permitting failures and habitat destruction can translate into material legal, operational and remediation costs for companies working near protected areas.

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