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Nature needs more than pledges: COP31 must give business the confidence to invest
03/11/2026
Professor Ania Zalewska, Professor of Finance in the University of Leicester School of Business, writes:
As governments struggle to finance their environmental ambitions, the private sector has a vital role to play. But unlocking corporate investment in nature will require consistent and binding policies, not another round of voluntary promises.
Governments have promised to halt deforestation, restore degraded ecosystems and reverse biodiversity loss. Yet these ambitions compete with growing demands on public budgets, including healthcare, education and infrastructure. Private investment must therefore play a larger role, but mobilising it requires more than another round of voluntary commitments.
Corporations, banks, pension funds and institutional investors control enormous financial resources. Their investment decisions influence whether forests are cleared, rivers polluted, wetlands drained or landscapes restored. Yet much of nature’s value cannot easily be converted into commercial revenue streams. Species survival, clean water, flood protection and ecological resilience benefit society as a whole. However, the costs of protecting them frequently fall on individual landowners, businesses or governments.
This is classic market failure. Nature creates public benefits but its destruction can generate private profits.
For COP31, the question is therefore not simply how to attract more money, but how to make protecting and restoring nature a rational, competitive and financially attractive business decision.
The promises are growing, but the money is not following
Since the Paris Agreement in 2015, international climate negotiations have increasingly recognised the importance of ecosystems. COP26’s Glasgow forest declaration committed participating governments to halt and reverse forest loss by 2030. COP28 explicitly recognised nature protection and restoration in the first global stocktake. Meanwhile, the separate Kunming–Montreal Global Biodiversity Framework established targets to conserve at least 30% of land and sea and bring at least 30% of degraded ecosystems under restoration by 2030.
Corporate engagement has developed alongside these commitments. The Taskforce on Nature-related Financial Disclosures (TNFD) has encouraged businesses and financial institutions to assess their dependencies and impacts on nature. By September 2026, more than 1,100 organisations were producing some form of TNFD-aligned disclosure. Nevertheless, even companies leading on disclosure cannot substitute for governments establishing common rules.
But disclosing is not the same as investing, and a promise is not an ecological outcome.
The UN Environment Programme’s State of Finance for Nature 2026 estimates that only $220 billion was invested in nature-based solutions in 2023, of which approximately $23 billion came from private sources. More troublingly, an estimated $7.3 trillion flowed into activities harmful to nature. In contract, annual investment in nature-based solutions needs to reach $571 billion by 2030.
The problem is not merely how to raise more conservation finance. It is how to redirect an economic system that continues to reward environmental degradation.
Deforestation rules show why policy credibility matters
When policy ambition outpaces corporate action. The European Union’s Deforestation Regulation illustrates how binding policy can demand more than companies have committed to voluntarily. Introduced in 2023, it requires companies trading commodities including cattle, cocoa, coffee, palm oil, rubber, soy and timber to demonstrate that relevant products are deforestation-free.
By linking access to a major consumer market with environmental performance, the regulation creates incentives for greater transparency throughout international supply chains. Its ambition contrasts with gaps in voluntary corporate commitments: Global Canopy’s Forest 500 assessment found that only 29% of the 500 companies assessed had deforestation commitments covering all relevant commodities in 2025. One-third had no deforestation or ecosystem-conversion commitments at all. These figures illustrate why governments cannot rely on voluntary commitments alone to establish common environmental standards.
When companies seek more than governments deliver. The same regulation also illustrates the reverse: some businesses want firmer implementation than governments provide. The implementation has suffered repeated delays, partly reflecting implementation challenges and resistance from sections of industry and trading partners. Its principal requirements are now scheduled to apply from December 2026 for larger operators.
Not all companies are in favour of these delays. Businesses that have already invested in compliance want governments to uphold the rules and timetable rather than offer further flexibility. For them, postponement creates uncertainty over whether their investment will be rewarded.
In October 2025, major businesses including Nestlé, Ferrero and Olam Agri publicly opposed another proposed postponement. They argued that companies had already invested in preparing their supply chains and that further delays would penalise early movers and create uncertainty. In this case, these companies were asking for more consistent government delivery and timely implementation of the standards already agreed.
The two situations expose different gaps. In the first, policy ambition exceeds many companies’ voluntary commitments. In the second, companies that have prepared to comply seek greater certainty than governments deliver. Clear, enforceable standards can therefore both push lagging businesses to act and protect those that have already invested in sustainable production.
Governments need to set standards that move businesses forward and deliver on them when businesses are ready to act.
What governments must do to unlock investment
Businesses cannot be expected to finance every public environmental benefit voluntarily. Governments must establish the rules that make environmental responsibility commercially viable.
First, they must provide clear, binding and predictable regulatory paths. Deforestation restrictions, habitat protection requirements, environmental due diligence and credible reporting standards create common expectations. They also protect responsible companies from competitors that gain an advantage by ignoring environmental costs. This consistency must extend beyond individual political cycles. Forest restoration and biodiversity recovery take decades. Investors cannot make long-term commitments when environmental regulations are repeatedly postponed, weakened or reversed.
Second, governments must develop credible markets for ecosystem services. Water companies could pay for upstream catchment restoration, infrastructure operators could invest in natural flood protection, agricultural businesses could reward farmers for improving soil health and biodiversity. These arrangements need reliable ecological measurements, enforceable contracts and safeguards against exaggerated environmental claims.
Third, scarce public finance should be used strategically. Development banks, guarantees, concessional loans and blended-finance arrangements can reduce risks and attract private investors into restoration projects that would otherwise struggle to secure funding.
Fourth, governments must address the subsidies and incentives that encourage ecosystem destruction. Financing restoration while subsidising degradation is economically contradictory.
What COP31 should deliver
These policy tools should be judged by what they change, not simply by how much finance they announce. COP31 should move beyond new financing targets and focus on three tests of progress.
First, is less finance supporting environmental damage? Redirecting harmful subsidies, lending and investment could be more consequential than expanding corporate conservation donations. Preventing damage should not be given less weight than paying to repair it.
Second, is private finance genuinely additional? Public guarantees and blended-finance instruments should demonstrate how much new investment they mobilise, who bears the risks and whether ecological outcomes improve. Public money should not simply subsidise investments that would have happened anyway.
Third, are restoration and long-term stewardship delivering measurable ecological improvements? Payments should be linked to habitat condition, ecosystem resilience and biodiversity recovery and not merely to numbers of planted trees, designated hectares or issued carbon credits. Indigenous peoples and local communities must share fairly in the benefits.
It is important to acknowledge that some ecosystems will never generate adequate commercial returns. Governments and international donors will therefore remain indispensable, particularly for protecting threatened species and habitats whose benefits cannot be captured by markets. But public finance can achieve much more when supported by consistent regulation and governance, credible institutions and responsible private investment.
COP31 should be judged not by the number of declarations signed, but by whether it makes investment in nature more credible, durable and effective.
Nature needs an economic system in which protection pays, destruction carries a cost, and restoration becomes a lasting investment rather than an occasional act of generosity.