Research

Mistra Finbio is a transdisciplinary research programme centred on doing cutting-edge research while simultaneously developing science-based outputs that can promote real-world impact. In Mistra Finbio, we leverage key networks in the academic and finance sector alike, with the aim of serving as a testbed for piloting novel metrics and tools to achieve scalable impact. We do this by engaging strategically selected impact partners who can translate research into immediate realworld change. 

The programme brings together researchers from diverse disciplines – computational biology and bioinformatics, ecology and systematics, financial and trade economics, and philosophy – as well as partners from the finance sector, to collaboratively develop meaningful ways of incorporating biodiversity into financial decision making. We also examine key ethical and governance concerns associated with the monetisation of biodiversity, synthesising lessons from past and ongoing efforts to develop markets for biodiversity and ecosystem services, and exploring future risks and opportunities. We take a holistic systems perspective on the financial service sector and address the information needs of various different types of financial actors. 

Mistra Finbio aims to play a pivotal role in initiating and accelerating the inclusion of science-based sustainability criteria, particularly biodiversity, in decisions made throughout the financial sector. 

By co-creating new research and testing novel metrics and tools to capture corporate biodiversity impacts with our impact partners, we are developing applicable use cases. The firm intention of Mistra Finbio is to demonstrate the benefits of integrating biodiversity into financial decision-making.

Mission and vision

Our vision is a future where financial investments promote and shape an economy that supports a resilient biosphere and prosperous societies.

Our mission is to facilitate real change in the financial system in a way that benefits biodiversity by developing theory and decision support tools, and by conducting empirical research that can inform financial actors’ strategies and promote investments that enhance rather than harm nature.

The financial system depends on and impacts nature through its relationship to companies and how they are able to act. Nature underpins the economy and the financial system as it provides resilience, resources and ecosystem services. The loss of nature and biodiversity is a threat to the economy and financial actors as risks of natural hazards, shocks and conflicts increase, while resilience is eroded.

The financial system depends on and impacts nature through its relationship to companies and how they are able to act. Nature underpins the economy and the financial system as it provides resilience, resources and ecosystem services. The loss of nature and biodiversity is a threat to the economy and financial actors as risks of natural hazards, shocks and conflicts increase, while resilience is eroded. Finance has the responsibility and opportunity to understand this dependency and impact, and to steer its activities to support regeneration and protection of nature and biodiversity. Mistra FinBio positions itself to bring light to these connections and to develop actionable tools to guide a green development for finance sector actors.

We work in four core themes:

There is growing interest in the state of biodiversity across the corporate world, and a range of methods have emerged both for data collection and impact assessment. However, developing reliable metrics for biodiversity, in lieu of easy-to-grasp proxies, is a challenge. Often it is difficult to verify claims in terms of accuracy and biases. 

In order to understand how changes in biodiversity impact financial systems, we need to understand how social-ecological interactions shape biodiversity and, in turn, how changes in biodiversity impact human wellbeing and economic activity, generating knock-on effects within the financial system.

Within the ‘connecting biodiversity to finance’ theme, the focus is on testing and analysing different ways of measuring and describing biodiversity and its connection to finance. This theme consists of two work packages: work package 1 (WP1) led by Fredrik Ronquist and work package 2 (WP2) led by Juan Carlos Rocha.

WP1 focuses on advancing eDNA methodologies to track biodiversity. The objective is to develop robust and scalable techniques that move beyond assessing rare or charismatic species, instead adopting a holistic approach to measure biodiversity at large. These methods could then be used to inform business impact assessments, land management practices, and biodiversity-related investments.

WP2 develops and tests models linking biodiversity changes to systemic risks, including disruptions to ecosystem services and financial stability. The goal is to create tools capable of assessing how local biodiversity impacts, such as those from land-use changes, cascade into broader ecological and economic consequences.

There is an urgent need for transformative change that reverses biodiversity loss and degradation of nature. The financial sector is pivotal in generating and directing capital to support this change, but currently faces a three-fold challenge regarding transformation: a lack of reliable market architecture, insufficient payment mechanisms, and shortage of funding. For finance to successfully support nature-positive change there is also a need for suitable performance indicators and incentive structures. The ‘financing systemic change towards sustainability’ theme focuses on exploring, developing and supporting a shift in the financial architecture toward structures, metrics and pathways that support biodiversity both now and in the future. The theme is made up of three work packages: work package 3 (WP3) led by Ben Caldecott, work package 4 (WP4) led by Beatrice Crona, and work package 5 (WP5) led by Garry Peterson.

WP3 focuses on understanding the requirements for financial institutions to mobilize capital for nature recovery. This work has provided deeper insights into the barriers to mobilizing nature recovery projects and the role of asset location data in nature-related risk analysis.

WP4 aims to make Mistra Finbio research more accessible through pilot projects, events, and thought leadership presentations. In 2024 this work culminated in the launch of the report Doing Business within the Planetary Boundaries in November at the Norrsken Impact Week in Barcelona. The report synthesizes core Mistra Finbio research themes into a single resource and since the launch in November it has been presented at several different events.

WP5 uses scenarios and other futures methods to examine what novel risks and opportunities emerge in the interface between finance and biodiversity now and in the future, and develop scenarios of alternative pathways forward for finance and biodiversity.

Finance plays a crucial role in supporting biodiversity, but even well-intentioned interventions can generate unintended negative side effects that need to be identified and mitigated. Simultaneously, biodiversity loss poses significant, yet poorly understood, risks to economies and the finance sector. To develop effective governance systems for biodiversity finance, these challenges must be addressed. The ‘governing biodiversity finance and identifying biodiversity-related risk’ theme focuses on closing these knowledge gaps. It consists of two work packages: WP6, led by Joakim Sandberg, and WP7, led by Mark Sanctuary.

WP6 evaluates the ethical risks associated with biodiversity finance and explores governance structures to mitigate them. The focus in 2024 has been on the ethical implications of biodiversity measurement metrics used by companies and investors.

WP7 investigates biodiversity-related risks to investors, with a focus on transition and physical risks. In 2024, research in WP7 has progressed on two key tasks: analyzing the effects of international investment agreements (IIAs) on stranded investments and exploring compound climate- and nature-related risks to the economy.

Mistra Finbio ultimately aims to support real innovation in and transformation of financial markets, in relation to biodiversity. We seek to transform current practices by developing new and innovative instruments for capturing and addressing biodiversity. To ensure that the research outcomes are useful in practice we are working with seven carefully selected impact partners operating in different parts of the financial system. The fourth theme, ‘initiation and coordination of transformation processes’, consists of work package 8 (WP8) led by Megan Meacham.

WP8’s main aim is to take ‘late-stage’ ideas and outputs, particularly from WP4, and to facilitate testing research outputs with impact partners. The insights and outcomes from piloting and prototyping will also feed back to the other work packages to inform the continued development of scientific theories and methods.

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