Nature-3B is a European research project designed to help financial systems better account for biodiversity and nature-related risks. Its core purpose is to support investors, regulators, and public authorities in shifting capital flows away from activities that damage ecosystems and toward those that protect and restore nature. The project focuses particularly on the role of central banks, financial supervisors, and large institutional investors in driving this transition. 

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The project aims to develop practical financial tools that embed biodiversity considerations into mainstream finance. These include new investment benchmarks that reflect nature performance, guidance for issuing bonds that support ecosystem protection, and analytical tools that help financial authorities assess how biodiversity loss could affect economic stability. By improving data, metrics, and risk assessment methods, Nature-3B seeks to make nature-related impacts more visible and actionable in financial decision-making. 

Objective:  

Overall, Nature-3B’s goal is to strengthen the integration of biodiversity and nature into financial policy and practice, helping ensure that financial markets contribute to long-term environmental sustainability rather than undermining it. 

IIASA contribution:  

IIASA contributes to the aims of Nature-3B by:  

  • Development of spatial maps that identify priority areas for biodiversity protection across Europe and highlight where protected areas could be optimally expanded to meet the 30×30 commitment1. These maps incorporate indicators of natural capital loss, helping to link biodiversity conservation needs with broader environmental and economic considerations. 
  • Evaluation of production potential under existing and optimized cropland allocation for multiple biodiversity conservation scenarios. This geo-spatial assessment includes analysis of inter-linkages between biodiversity targets, EU product demand, and international trade. 
  • Estimation of the land allocation optimization effects (e.g. change of fertilizer inputs) on water demand of the agricultural sector and availability of water for other economic sectors and the environment in terms of both water quantity and quality. 
  • Assessment of risks and opportunities in the EU agricultural sector using representative assets modeling. The goal of this research is to help quantify macroeconomic importance from the ground up, provide detailed entity-level evidence on nature dependence at EU level, and address the issue of potential asset stranding. 
  • Adaptation of innovative de-risking financial instruments for nature-positive investments by transferring the concept of a “floption” (flexible option) from the context of carbon markets into the realm of green bonds targeting biodiversity. The floption concept extends traditional financial option yet provides more flexibility and consequently higher de-risking potential. 

 

Footnotes: 1 The “30 by 30” is a worldwide initiative for governments to designate 30% of Earth's land and ocean area as protected areas by 2030. For more details see e.g. 30x30

Consortium members

Nature-3B is a consortium of 15 organisations:

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Funded by the European Union under the Horizon Europe Programme, Grant Agreement No. 101182455 (NATURE3B). Views and opinions expressed are, however, those of the author(s) only and do not necessarily reflect those of the European Union, European Commission, DG Research Executive Agency (REA). Neither the European Union nor the granting authority can be held responsible for them.