Mobilising investments for protecting and restoring biodiversity by harnessing innovative financial solutions and advanced geospatial analytics

Project Information

BIO-CAPITAL

Grant agreement ID: 101135150

DOI

10.3030/101135150

EC signature date 15 May 2024

Start date 1 June 2024

End date 30 November 2027

Funded under

• Food, Bioeconomy Natural Resources, Agriculture and Environment

Total cost

€ 4 695 750,00

EU contribution

€ 4 695 750,00

Coordinated by

CESKA ZEMEDELSKA UNIVERZITA V PRAZE
Czechia

Periodic Reporting for period 1 - BIO-CAPITAL (Mobilising investments for protecting and restoring biodiversity by harnessing innovative financial solutions and advanced geospatial analytics)

Reporting period: 2024-06-01 to 2025-11-30

Summary of the context and overall objectives of the project

Biodiversity loss is a critical environmental challenge, undermining ecosystems and the essential services they provide. The European Union’s Biodiversity Strategy for 2030 calls for urgent action and major investments to reverse this trend. However, public funding alone is insufficient. BIO-CAPITAL is a 42-month Horizon Europe project created to help fill this gap by mobilising private investment for biodiversity conservation, using novel approaches to ensure that funding leads to tangible results.

The central idea is that innovative financial instruments, coupled with advanced monitoring technology, can unlock new resources for nature while giving investors confidence in the outcomes. BIO-CAPITAL’s interdisciplinary consortium spans ecology, finance, remote sensing, and stakeholder engagement. Activities are piloted in five regions across Europe (from forests to farmlands), where local stakeholders co-design and test solutions. The main objectives are to map and evaluate current policy and financing frameworks; to develop and pilot new financing mechanisms (e.g. green bonds, Payments for Ecosystem Services, biodiversity insurance) that reward biodiversity-friendly practices; to establish a robust monitoring system (leveraging satellite Earth observation and field data) to quantify biodiversity gains; and to co-create a biodiversity certificate scheme that standardizes how biodiversity improvements are measured and valued (analogous to carbon credits for nature). By achieving these objectives, BIO-CAPITAL aims to channel new financial flows into biodiversity protection, achieve measurable ecological improvements on the ground, and provide models that can be scaled up across Europe.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

In its first 18 months, BIO-CAPITAL built a strong foundation across analysis, technology, and stakeholder engagement:

Analyzing the landscape: The team reviewed EU and national policies and financial instruments related to biodiversity, identifying key gaps and barriers. These findings guide the design of the project’s solutions and will inform upcoming recommendations.

Building the monitoring framework: A monitoring and verification system was established to track biodiversity uplift in the pilots. The consortium defined a set of biodiversity indicators aligned with EU targets and built a geospatial data platform to process Earth observation data for all sites. By month 18, baseline conditions were mapped in each use case and initial satellite-based indicators were validated with field data. This provides an objective baseline from which to measure future biodiversity improvements as interventions are rolled out.

Designing financial solutions: The project began developing new financial mechanisms to drive investment in nature. An investment blueprint was completed for one pilot (regenerative agriculture in France) – a business model that blends funding sources and links returns to biodiversity outcomes. In parallel, a Payments for Ecosystem Services scheme was drafted to reward land managers for measurable ecological benefits, and an index-based “biodiversity insurance” product was prototyped to hedge risks. Local stakeholders participated through workshops and interviews, ensuring these financial models are realistic and have buy-in for pilot testing.

Co-creating biodiversity certificates: A multi-stakeholder process was launched to design a biodiversity certificate that could certify (and potentially monetize) biodiversity gains. The team decided to focus the certificate’s initial criteria on actions (e.g. adopting agro-ecological practices, restoring habitats) rather than long-term species outcomes, since many benefits take time to manifest. Emphasizing the implementation of proven positive practices keeps the scheme credible yet practical for land managers. This concept is being aligned with emerging “nature credit” ideas in the EU to maximize its policy relevance.

All work packages progressed as planned. Cross-disciplinary coordination meant insights from one area (e.g. policy analysis) fed into others (e.g. indicator design and finance). By month 18, BIO-CAPITAL had met its key milestones and was ready to move into the next phase: on-the-ground demonstration of the new finance mechanisms and certificate framework.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

BIO-CAPITAL is pioneering new approaches at the intersection of ecology and finance. It is integrating advanced Earth observation techniques with financial innovation in ways not seen before. For example, the project’s framework links satellite-measured biodiversity indicators directly to investment performance – a novel approach that ties ecological outcomes to financial rewards. This breakthrough bridges scientific monitoring and market mechanisms, providing credible assurance of environmental impact to investors.

On the technical front, the project’s use of multi-source satellite data and machine learning enables biodiversity to be monitored across whole landscapes at a resolution and frequency not previously achievable. On the financial front, BIO-CAPITAL’s creation of new instruments (such as biodiversity-linked bonds, PES schemes, and insurance) and its biodiversity certificate concept are charting new territory in sustainable finance. The certificate idea, essentially a biodiversity-focused analogue to carbon credits, is especially novel and could lay the groundwork for future policies or market schemes that reward nature conservation. Collectively, these advances demonstrate how biodiversity protection can be rigorously measured and given financial value. By reducing uncertainty (through better data) and standardizing models, BIO-CAPITAL is opening the door for much greater private-sector involvement in biodiversity conservation than was previously possible.