Businesses Call for $2.6 Trillion Nature-Harmful Subsidy Reform Before COP17

More than 130 companies and financial institutions representing over $600 billion in revenue and $4.7 trillion in assets under management are calling on governments to begin national reforms of environmentally harmful subsidies and incentives within the next 12 months. The open letter, convened by Business for Nature and the Finance for Biodiversity Foundation, targets at least $2.6 trillion a year in public spending that the signatories say contributes to soil degradation, water stress and ecosystem loss.

 

The letter argues that reform should focus on redirecting existing public spending rather than raising new funds. Governments are being asked to establish cross-ministerial processes and develop national reform plans with input from business, finance, producers, civil society, local communities and Indigenous Peoples. Signatories include Nestlé, Unilever, Danone, H&M Group, Ørsted, Vattenfall, Legal & General, Rabobank, BNP Paribas Asset Management and Storebrand Asset Management.

 

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The call comes ahead of COP17 in Yerevan, where countries are expected to review progress under the Kunming-Montreal Global Biodiversity Framework. Under Target 18, 196 countries agreed to identify harmful incentives by 2025 and reduce them by at least $500 billion a year by 2030. Business for Nature says only 5% of countries have so far set comprehensive national targets, leaving a large gap between the commitment and implementation.

 

Financial institutions argue that the current structure creates conflicting market signals. Anita de Horde, Co-Founding Executive Director of the Finance for Biodiversity Foundation, said investors cannot be expected to align portfolios with nature goals if public incentives continue directing capital towards activities that degrade ecosystems. Hans Stegeman, Chief Economist at Triodos Bank, said delays mean public money continues to support the wrong outcomes, including through fossil fuel subsidies.

 

The signatories say they will support reform by assessing and disclosing nature dependencies and impacts, integrating resource security into strategy and providing governments with practical input on policy design. Some market participants also point to existing mechanisms, such as England’s Biodiversity Net Gain regime, as examples of how private capital can support nature restoration, though they present these approaches as complementary to, rather than substitutes for, subsidy reform.