Nature-Related Sustainable Finance in China: A Brief Review

The document assesses the state of nature-related sustainable finance in China, noting that while a systematic policy framework is emerging, funding remains heavily skewed toward climate change rather than biodiversity. It identifies critical barriers—data gaps, pricing difficulties, and unclear business models—and highlights innovative pathways such as AI-driven risk assessment, the 'Ecological Optimization and Development' (EOD) model, and nature-based collateral for SMEs.

• China is highly vulnerable to nature loss, with 65% of its total GDP at risk, yet private sector involvement in biodiversity funding remains limited and often lacks effective risk management.
• China and Europe employ 'top-down' policy frameworks for sustainable finance, whereas the US and Japan rely on 'bottom-up', market-driven strategies. Across all these economies, climate change is the most mature and comprehensively addressed topic, while biodiversity and other nature drivers are in earlier stages.
• China's sustainable finance policy is becoming more systematic, with the People's Bank of China (PBOC) proposing 'three functions' and 'five pillars' in 2021. However, climate change dominates the landscape, accounting for over 60% of nature-related keywords in relevant policies.
• Sustainable finance for nature remains underdeveloped in China; less than 10% of sustainable bonds and funds are directed at nature-related themes beyond climate change, with over 50% targeting climate-related themes.
• Green loans are the dominant tool in China's green finance landscape, reaching a balance of RMB 36.6 trillion ($5.14 trillion) by the end of 2024, though 83.6% of this is concentrated in climate and energy-related sectors.
• Interviews with 17 Chinese financial institutions identified three primary barriers to scaling nature finance: a lack of credible nature-related data, limited evaluation and pricing methodologies for impacts, and underdeveloped business models with uncertain returns.
• Financial institutions are exploring technological and structural innovations to overcome barriers, including using AI and satellite monitoring for biodiversity data, the 'Ecological Optimization and Development' (EOD) model to make ecological projects profitable, and using carbon credits or environmental performance as collateral for SMEs.

APA

World Economic Forum (2025). Nature-Related Sustainable Finance in China: A Brief Review. https://reports.weforum.org/docs/WEF_Nature_Related_Sustainable_Finance_in_China_2025.pdf

Chicago

World Economic Forum. Nature-Related Sustainable Finance in China: A Brief Review. 2025. https://reports.weforum.org/docs/WEF_Nature_Related_Sustainable_Finance_in_China_2025.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Nature-Related Sustainable Finance in China: A Brief Review |date=June 2025 |url=https://reports.weforum.org/docs/WEF_Nature_Related_Sustainable_Finance_in_China_2025.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2025naturerelated, author = {{World Economic Forum}}, title = {{Nature-Related Sustainable Finance in China: A Brief Review}}, institution = {World Economic Forum}, year = {2025}, month = jun, url = {https://reports.weforum.org/docs/WEF_Nature_Related_Sustainable_Finance_in_China_2025.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }