Biodiversity is a strategic cornerstone of Finnfund’s sustainability agenda

Biodiversity is one of the cornerstones of Finnfund’s sustainability agenda. In short, biodiversity refers to the variety of living species on Earth, including plants, animals, bacteria and fungi. At Finnfund we are committed to strengthening the well-being and diversity of nature and to mitigating possible nature and biodiversity risks and detrimental impacts in our investment activities.

Ahead of the International Day for Biological Diversity on 22 May, we caught up with Finnfund’s Environmental and Social Advisers Harold Gordillo and Aleksi Heiskanen and Senior Development Impact Advisor Anne Valto to learn more about how Finnfund advances biodiversity.

Q: To kick-off, what role does biodiversity play in Finnfund’s sustainability work?

Harold: As I wrote in a blog recently, biodiversity comes up regardless of the sector we are looking at, ranging from forestry to digital infrastructure, agriculture, renewable energy – the list goes on. Biodiversity loss is a major threat to the well-being of the planet and the sustainable development of societies. Thus, biodiversity has gained increased attention across different sectors, as it rightfully deserves. Furthermore, biodiversity loss and climate change are indistinguishably linked and, therefore, they need to be considered together, as is the case at Finnfund.

Anne: “Climate and nature driving Finnfund’s investments” is one of the three key strategic objectives of Finnfund’s updated strategy 2024-2027. The aim is that half of the new investments are in climate and nature. Investors and companies play a crucial role in tackling climate change and enhancing biodiversity through their own activities. This can also create new business opportunities, as there is demand for innovative solutions as well as new products and services. Since 2024, Finnfund has had a Nature and Biodiversity Statement that brings together the goals and guiding principles through which we aim to strengthen the wellbeing and diversity of nature, as well as mitigate possible nature and biodiversity risks and detrimental impacts in our investment activities.

Q: Can you please elaborate on the Nature and Biodiversity Statement – what are its key elements?

Aleksi: In short, the statement outlines three key commitments that guide our work. First, we are committed to ensuring no net loss of biodiversity in our investments meaning that we invest in companies whose operations do not cause negative net effects on biodiversity. For every investment decision, we use the IFC Performance Standards Framework to evaluate and minimise risks to nature and biodiversity.

Second, we develop and foster nature and biodiversity net-gains through investments that develop solutions contributing to the goals and targets of the Kunming-Montreal Global Biodiversity Framework (GBF). This includes mechanisms that address both biodiversity loss and climate change, both directly and indirectly. For example, as part of forest investments, existing primary forests are protected and we support reforestation activities that prioritize native species, which not only sequester carbon but also enhance habitat connectivity.

Anne: Third, we are also committed to promoting more systematic, harmonised, and transparent nature-related financial disclosures and reporting. This concerns both our own operations and by encouraging our investee companies and other investors to do the same. Our first Taskforce on Nature-related Financial Disclosures (TNFD) report is now published as a part of our Annual Report 2024. The reporting provided us and the companies great insights to nature risks and impacts, but there are still areas to work with to get even more comprehensive picture.

Q: What are some of the challenges encountered with regard to enhancing biodiversity?

Harold: Challenges are multifaceted as they occur in different sectors at different levels and in the particularities of each region. Companies often have very limited knowledge and technical experience on biodiversity issues, as well as limited resources in terms of budget and top management support to implement necessary plans and procedures.

Anne: Carbon markets are already developed but for nature and biodiversity credits market mechanisms and markets are only emerging. Therefore, nature and biodiversity work is not selfsustained but needs financing. This may be generated for example from carbon credit schemes when climate and nature work go hand in hand. Furthermore, the largest biodiversity risks and impacts often hide in companies’ supply chains where their identification and quantification is not straight forward. Also, companies’ leverage to influence and work with suppliers to improve their performance in biodiversity management is typically limited.

Q: In terms of key achievements regarding biodiversity, what specific examples would you like to highlight in particular?

Aleksi: Some of the most effective biodiversity gains happen on land that’s already been heavily used. That’s why we focus our forestry investments on degraded areas with potential for recovery, while protecting any remaining natural habitats—like MLR’s preserved primary forests in Nicaragua. In Ghana and Sierra Leone, our investee Miro grows native trees in nurseries to restore riparian zones, which protect plantations and reconnect wildlife habitats. Across all land-based projects, we’re also aiming to reduce chemical use by promoting integrated pest and disease management—prioritizing natural methods first to maintain healthy, resilient forests.

Q: To wrap-up, as sustainability professionals, do you have any advice and tips on how we can all protect and strengthen biodiversity in our everyday daily life?

Anne: Simply consume less. Think twice and sleep overnight before making purchase decisions, learn to make a difference between real needs and cravings, and definitely refuse to buy poor quality, rather consider second hand. This week we have an annual flea market at our Finnfund office, as we also encourage our employees to buy second-hand.

Aleksi: Everyday consumption has a significant impact on biodiversity through global supply chains. For example, by choosing plant-based proteins, you not only support your health but also contribute positively to biodiversity by reducing the pressure for land-use change. Additionally, you can let your garden grow wild. Leave the lawn unmowed. A slightly overgrown garden provides excellent shelter and habitat for many insects and pollinators, which enhances local biodiversity.

Harold: It is crucial to consider the entire value chain of the foods we consume. For instance, the soy you purchase may contribute to deforestation, the coffee you buy could be polluting water sources, the chocolate you enjoy might be causing soil degradation, and the tuna you consume may be sourced from unsustainable practices that lead to overfishing. By being mindful of these impacts, we can make more informed and environmentally responsible choices. In sum, as is the case regarding sustainability overall, we can all play a role through our everyday actions and choices.

Read more:
From buffer zones to digitalisation – advancing biodiversity in practice

Nature and biodiversity statement – Finnfund

Aleksi Heiskanen Environmental and Social Adviser aleksi.heiskanen@finnfund.fi

Harold Gordillo Environmental and Social Adviser harold.gordillo@finnfund.fi

Anne Valto Senior Development Impact Adviser anne.valto@finnfund.fi