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Nature loss

How much capital have labelled bonds allocated to biodiversity?

Written by Josephine Richardson

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Sustainable labelled bonds promise to direct capital towards specific environmental and social objectives. But how closely does actual allocation follow framework eligibility?

This paper analyses allocation reporting for USD3.153tn of labelled bonds to find out — with biodiversity emerging as a striking gap. Despite being included in 6% of bond frameworks by notional, biodiversity has received just USD25bn of allocated capital — 0.8% of the total.

The paper also finds that framework breadth has grown: the average number of eligible categories per bond has increased from 4.41 in 2019 to 5.94 in 2024. More categories offer issuers greater flexibility — but may give investors less certainty about where proceeds actually land.

About the author

Josephine Richardson

Josephine Richardson

Managing Director, Head of Research

Based in London, Jo leads AFII’s research and a global team supporting fixed income investors as they align their portfolios with climate and sustainability goals. She joined AFII after 18 years in fixed income markets at JPMorgan.

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