1.4.1 Finance solutions

The BIOFIN Process seeks to understand the drivers of biodiversity loss and ultimately identify, prioritize and implement actions that result in positive changes and outcomes for biodiversity and our society. Most of the actions the BIOFIN Process identifies and prioritizes are implemented through “finance solutions”. A finance solution is an integrated approach to solve a specific problem or challenge by the context-specific use of finance and economic instruments. It is built on a combination of elements that includes one or more finance instruments, financing sources, lead agents or intermediaries, beneficiaries or principal stakeholders, and the desired finance result (see Box 1.3). Figure 1.3 presents a finance solution schematic. The following sections describe each element in more detail, beginning with the finance results

Box 1.3: The Elements of a Finance Solution37

  • The financing sources the solution relies upon.
  • The lead agent or intermediaries tasked to manage the operationalization of the solution: a government entity proposing a tax reform or the bank establishing a trust fund or issuing a bond to deliver conservation finance.
  • The instruments or mechanisms used to mobilize, collect, manage and disburse the funding. They can be strictly financial instruments like bonds or equities, or fiscal and regulatory reforms.
  • The desired finance results.
  • Beneficiaries or principal stakeholders that either receive the financing or are the instrument’s targets.

Figure 1.3: Schematic Diagram Showing the Main Elements of Most Finance Solutions and their Relationship with Finance Instruments