'Biodiversity is getting sidelined entirely' – EU budget plan sparks backlash from impact scene

Reaction continues to come in from the impact community, after the European Commission presented its proposal for its next long-term budget in mid-July.

Environmental groups are unhappy with the proposed budget (known officially as the Multiannual Financial Framework) for 2028-2034. Many environmental projects look to be getting axed, as the Commission focusses on security, competitiveness and borders.

In particular, campaigners and the impact community are up in arms over the decision to scrap dedicated funding sources such as the hugely popular LIFE programme – the EU's only funding instrument for environment and climate – and roll everything into one ‘competitiveness’ instrument worth hundreds of billions of euros.

Having everything in one, argues the Commission, makes the funding more flexible to respond to member states’ needs. On the other hand, having everything in one pot, with little in the way of earmarking, leaves member states free to forego any spending they don’t want to do – like climate action, for instance.

The funding gap will only increase

One of the biggest casualties of this will be the EU’s nascent efforts on biodiversity, which the Commission’s proposal would leave with no earmarked funds at all.

"Biodiversity underpins ecosystem services critical to climate resilience, food security, and health," said the leading sustainability data platform Illuminem.

Nonetheless, this issue, little-understood by many policymakers around Europe, will likely fall by the wayside. This is bad news for a sector that already, according to the Commission itself, has a funding gap of $37bn.

"I find it deeply concerning that the dedicated biodiversity fund has been dissolved and that there are now no clear targets for nature protection," Ole Margraf with the climate fintech platform Carbon Equity tells Impact Loop. "Without earmarked funding, biodiversity risks being sidelined entirely in favour of industrial or economic priorities, making the already significant €37b funding gap even harder to close."

What does it mean for the impact scene?

Taking to Linkedin, Margraf laid out some of the consequences for funding of biodiversity-focussed impact companies. He points out that public funding will become less transparent – given the lumped-together nature of the new fund – "creating gaps private capital must fill."

He also says it will increase the need for stronger impact metrics, so firms vying for the dwindling pile of money will stand out more, and that there will be the need to measure concrete biodiversity impacts even more.

But is there enough private capital to get anywhere near plugging the gap?

"There’s growing private interest in nature-based solutions, but I still feel that biodiversity isn’t getting the investor attention it deserves," says Margraf.

"In the current market climate, capital is largely flowing into safer, more familiar investments (and increasingly back into defence), which is a real shame given the urgency of the biodiversity crisis. The capital is out there, but without clearer metrics and greater visibility, biodiversity-focused projects continue to struggle to attract it."