UN urges defunding of high-polluting industries as finance gap on nature widens
Frank Okon
The United Nations is calling for sweeping financial reform to curb global warming, warning that current investment patterns overwhelmingly favour environmentally destructive industries while starving nature-based solutions of funding.
The appeal follows the release of the State of Finance for Nature 2026 report, which highlights a stark imbalance between spending on environmental protection and investment in high-polluting economic activity. According to the report, for every dollar invested in protecting nature, around $30 is spent on activities that degrade it.
In 2023 alone, an estimated $7.3 trillion flowed into so-called “nature-negative” sectors, while just $220 billion was directed toward nature-based solutions such as ecosystem restoration, sustainable land use and climate resilience projects.
The UN said redirecting financial flows is the most powerful tool available to shift global markets toward industrial models that reduce environmental harm while remaining economically viable.
The report argues that environmental protection and economic growth should no longer be treated as competing goals. Instead, it calls for industrial standards and economic policies that embed environmental responsibility into core business models.
Among its recommendations are large-scale greening of urban areas to counter heat-island effects and improve living conditions, integrating nature into road and energy infrastructure, and accelerating the production of emissions-negative building materials.
It also urges governments to phase out environmentally harmful subsidies and investments, while rapidly scaling up funding for “nature-positive” activities that support biodiversity, climate resilience and long-term economic stability.
The report notes signs of progress. Global spending on biodiversity and landscape protection rose by 11 per cent between 2022 and 2023. International public finance for nature-based solutions increased by 22 per cent over the same period and was 55 per cent higher than in 2015.
However, the authors stress that these gains are dwarfed by the scale of environmentally damaging investment. While public funding has driven most of the growth in nature-based solutions, private capital continues to flow disproportionately into polluting sectors.
The report identifies utilities, industrials, energy and basic materials as among the most damaging industries. It also highlights fossil fuels, agriculture, water, transport and construction as sectors that continue to benefit from environmentally harmful subsidies.
“If you follow the money, you see the size of the challenge ahead of us,” said Inger Andersen, Executive Director of the UN Environment Programme, responding to the findings.
She contrasted the slow growth of nature-based solutions with what she described as surging investment in harmful activities, warning that incremental change will not be enough.
“We can either invest in nature’s destruction or power its recovery,” Andersen said. “There is no middle ground.”
The UN said the report underlines the urgency of reshaping financial systems to support economic activity that works with, rather than against, the natural world, warning that failure to act risks locking in environmental damage with long-term economic and social costs.
