Financialization of nature

The document critiques the process of 'financialization of nature,' which it describes as the reduction of natural elements into exchangeable financial instruments. It argues that pricing biodiversity is a prerequisite for this process, leading to the creation of 'natural capital' and market-based mechanisms like biodiversity banks and green bonds. The author contends that these tools, particularly those based on 'offsetting,' allow corporations to continue destructive activities by purchasing credits, thereby bypassing genuine conservation and violating the rights of traditional land defenders. The paper advocates for community-based governance and food sovereignty as alternatives to neoliberal market logic.

• The financialization of nature is defined as the process of segregating natural elements—such as water, air, and biodiversity—to issue new property titles, which are then traded as 'natural capital' in financial markets.
• Pricing biodiversity is viewed as a necessary first step for financialization, but it is criticized for ignoring equity, failing to reflect the true value of nature, and promoting only those ecosystems that are economically profitable.
• The concept of 'offsetting' is a central and 'perverse' feature of financial instruments, based on the flawed assumption that biodiversity damage in one location can be eliminated by preserving another area, regardless of the unique nature of the destroyed ecosystem.
• Biodiversity banks (or mitigation banks) allow developers to compensate for environmental damage by purchasing 'credits' from restored or conserved habitats; in the US, credits for endangered species can reach hundreds of thousands of dollars.
• Natural capital bonds, including green bonds and rainforest bonds, are presented as tools to attract private investment for conservation, but the document argues they allow polluters to continue destructive activities without meaningful change.
• The document asserts that financialization leads to the displacement of local communities and Indigenous Peoples and the violation of their collective human rights by transferring decision-making power to financial elites.

APA

Friends of the Earth International (2014). Financialization of nature. https://www.foei.org/wp-content/uploads/2014/11/05-foei-position-paper-ENG-lr.pdf

Chicago

Friends of the Earth International. Financialization of nature. 2014. https://www.foei.org/wp-content/uploads/2014/11/05-foei-position-paper-ENG-lr.pdf.

Wikipedia

{{cite press release |author=Friends of the Earth International |title=Financialization of nature |date=November 2014 |url=https://www.foei.org/wp-content/uploads/2014/11/05-foei-position-paper-ENG-lr.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{friendsoftheearthinternational2014financialization, author = {{Friends of the Earth International}}, title = {{Financialization of nature}}, publisher = {Friends of the Earth International}, year = {2014}, month = nov, url = {https://www.foei.org/wp-content/uploads/2014/11/05-foei-position-paper-ENG-lr.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }