Reimagining nature finance

Natural capital markets (NCMs) are widely heralded as an important solution to the biodiversity crisis. Extensive effort, energy, time, and resources have been invested into making them function. NCMs are intended to catalyse financial flows from the private sector to conservation and nature recovery projects, helping to close the ‘nature finance gap’. Whilst this rhetoric is appealing, there is growing evidence that NCMs (principally voluntary biodiversity and carbon offset markets) are unlikely to ever protect or recover nature at the necessary scale and speed required, nor deliver wide-ranging socio-ecological benefits to a diversity of communities, organisms, and ecosystems. Drawing on interdisciplinary evidence, we outline five established flaws associated with NCMs: persistent barriers to scaling, a compensatory rather than restorative character, the prioritisation of financial returns over socio-ecological outcomes, justice and equity concerns, and measurement challenges. Collectively, they lead us to offer a central claim: NCMs have absorbed a disproportionate amount of political and research attention relative to their limited impact. We call for reimagining nature finance, based on a central tenet: raising funds should be a means to an end, not an end in itself. This reimagined approach requires greater attention to how the structures and requirements of finance shape which regions, ecological outcomes, and forms of governance become visible, valuable, and ultimately financeable. A reimagined approach demands redirecting research and policy attention towards what really matters: finding effective and equitable ways to finance conservation and nature recovery projects which deliver beneficial socio-ecological outcomes.