Home ImpactKey themesClimate and nature Climate and nature Climate and nature lie at the core of Finnfund’s mandate as a development financier and impact investor. Climate change and biodiversity loss are two of the key global crises of our time. They cause significant threats to the well-being of the planet and the sustainable development of societies and economies – and their consequences are clearly visible across the globe. We believe that the private sector and investors have a key role to play in developing, introducing, adapting and fostering new, environment-friendly business models and solutions. Strengthening biodiversity and adopting climate-smart approaches reduce business risks and create new business opportunities. You may find some examples of our work for climate and nature among our impact stories. Climate change and biodiversity loss are two of the key global crises of our time. Photo: Shutterstock Every investment is assessed Finnfund assesses the risks, opportunities and impacts related to climate, nature and biodiversity of every investment before the investment decision as well as annually during the investment period. The assessment includes both physical and transition risks of climate change for all direct investments. As part of the climate risk assessment, Finnfund also identifies possible climate change adaptation needs and opportunities in every investment, both from a business perspective and in terms of the support the business may give to adaptation efforts among their clients and in society. The process of assessing climate risks and potential is further explained in this article and in Finnfund’s annual reports. In the case of nature and biodiversity risks, the focus is on physical risks. Currently, the risk assessment methodologies cover direct risks and impact, and to some extent supply chain risks. When nature and biodiversity risks are identified, investees are required to follow mitigation hierarchy practices and establish biodiversity action and management plans – based on the assessment against the applicable IFC Performance Standards – that ensure no-net-loss as a minimum. The same principles of assessing the risks and opportunities apply to fund investments, but the assessment can be made either by Finnfund or by the fund manager. To quantify and better understand the climate effects of its investments, Finnfund calculates and / or models investments’ absolute emissions, avoided emissions of energy investments, and carbon removals of forestry investments. These results are published in Finnfund’s Annual Report. The methodology and the process of climate accounting at Finnfund is further explained in this article. Among other climate and nature-related tools that Finnfund applies in its investment cycle, the Planetary Boundaries Investing Framework is a new tool for assessing and monitoring investments’ potential for generating positive planetary effects and for controlling negative outcomes in selected investments. The framework also contributes to Finnfund’s strategic target to inspire other investors and mobilise private capital for sustainable development. Finnfund’s investments also form part of Finland’s climate finance, including official development assistance related to climate action. Since 2022, Finnfund has partnered with MLR Forestal, a Nicaraguan agroforestry company, on a pilot project to restore 554 hectares of degraded forest land with significant biodiversity potential in Nicaragua. Photo: Finnfund Our commitment Support to mitigation of climate change and biodiversity loss as well as for adaptation and resilience are among Finnfund’s key objectives and development achievements. We are committed to supporting climate action, strengthening the well-being and diversity of nature, and mitigating climate, nature and biodiversity risks in our investment activities. In our strategy (2024-2027) we aim to continue allocating half of our new investments to climate and nature. The progress towards this objective is reported in our annual report. This commitment is reflected in our investment strategy and our focus on sectors such as renewable energy, forestry, agriculture, and financial institutions, including microfinance, as further explained in our sector-specific Theories of Change. We push for more systematic, harmonised, and transparent disclosure and reporting practices both in our own operations and encourage the companies we finance and other investors to do the same. Since 2021, we have continuously developed our approach to assessing and managing climate-related risks and opportunities, aligned with the four pillars of the Task Force on Climate-related Financial Disclosures (TCFD). In 2023, the TCFD was disbanded, and its recommendations were incorporated into the ISSB (International Sustainability Standards Board) standards. Finnfund does not currently report according to the ISSB standards, but we continue to apply the TCFD reporting framework. As of the beginning of 2024, Finnfund also joined the early adopters of the Task Force on Nature-related Financial Disclosures (TNFD). Finnfund’s climate- and nature-related reports can be found as part of our Annual Reports. Respectively, our climate and energy statement and nature and biodiversity statement further refine and elaborate our approach and guidance. Climate and energy statement Nature and biodiversity statement Climate risk assessment and identification of adaptation opportunities – our work in practice Climate accounting – our work in practice Impact stories Reports Thematic news News 06 May 2025 Finnfund announces successful completion of multi-tranche green and sustainable bond offering Finnfund, a Finnish development financier and impact investor, issues nearly EUR 200 million of… News 26 August 2024 New policy statement guides Finnfund’s investment activities in strengthening natural values and biodiversity Development financier and impact investor Finnfund has adopted a policy statement that brings together… News 26 January 2024 Let’s talk biodiversity – Finnfund’s nature and biodiversity statement in preparation “Biodiversity is life in all its forms and the protection of life,” said Sami… News 24 January 2024 Finnfund issues a EUR 100 million green bond Finnfund, a Finnish development financier and impact investor, issues a EUR 100 million green… News 20 September 2023 Event: Clean energy in Africa – closing investment gaps Join us on 28 September in Helsinki or online! What does the clean energy… News 16 December 2022 Finnfund and MLR Forestal to work on an innovative biodiversity remediation programme in Nicaragua Finnfund, a Finnish development financier and impact investor, and MLR Forestal, a Nicaraguan agroforestry… News 17 October 2022 Finnfund issues a EUR 75 million sustainability bond Finnfund, a Finnish development financier and impact investor, issues a EUR 75 million sustainability… News 03 October 2022 Finnfund publishes Sustainability Bond Framework Finnfund, a Finnish development financier and impact investor, has established a Sustainability Bond Framework… News 26 April 2022 DFIs pledge to enhance collaboration in support of infrastructure development The leaders of more than 15 Development Finance Institutions (DFIs) gathered to affirm their… News 08 November 2021 Collaborating to accelerate investment in climate adaptation and resilience New multimillion dollar commitments and strategic collaborative actions to overcome key hurdles to private… News 03 November 2021 CDC Group, Finnfund, Norfund propose innovative partnership with New Forests with an ambition to raise $500m for sustainable forestry across sub-Saharan Africa CDC Group (“CDC”), the UK’s development finance institution; Finnfund, the Finnish Fund for Industrial… News 20 October 2022 First investors in African Forestry Impact Platform announced New Forests, British International Investment (BII), Norfund and Finnfund, have signed subscription agreements for… News 02 November 2021 Finnfund is one of the founding members of the Forest Investor Club launched at COP26 At COP26 during the World Leaders Summit’s Forest Day session on November 2, 2021,… News 30 June 2021 New statement on climate and energy will guide Finnfund’s climate actions Finnfund has adopted a new statement on climate and energy. With this statement, Finnfund… News 29 June 2021 New open-access FRESCOS Tool launched for accounting the carbon sequestration in forestry projects Four European development finance institutions (DFI) – CDC Group (UK), Finnfund (Finland), FMO (Netherlands),… News 04 May 2021 Finnfund first development financier to report carbon net-negative investment portfolio Finnish development financier and impact investor Finnfund today released data showing that its total… News 12 March 2020 Finnfund’s new Sustainability Policy finalized and approved Finnfund’s new Sustainability Policy has been finalized and approved by Finnfund’s key decision making… Scroll left Scroll right Thematic blog posts Blog 13 March 2025 Harold Gordillo From buffer zones to digitalisation – advancing biodiversity in practice Nature and biodiversity have gained increased attention across different sectors in recent years, as… Blog 28 January 2025 Peter Chappell The art of avocado farming in Kilimanjaro In the north of Tanzania, under the shadow of Mount Kilimanjaro, and abutting its… Blog 15 December 2023 Aleksi Koskikallio Cracking the climate risk code in credit risk management Climate change and the transition to a low-carbon economy lead to costs for companies.… Blog 06 November 2023 Anne Valto Placing contract farming in the service of development, food security, and equality The 2022 Global Report on Food Crises[1] estimates that at least one in five… Blog 30 January 2023 Terhi Koipijärvi Terhi Koipijärvi: Strategic thinking over administration What is most important in Board work? How to draw the line between operational… Blog 20 December 2022 Anne Valto We got a deal from Montreal COP15 – then what? I had the privilege to attend Montreal COP 15 as a member of the… Blog 12 December 2022 Anne Valto We need ambitious targets for nature and biodiversity In the middle of Finnish winter, birds are swarming around the feeding place in… Blog 25 November 2022 Marko Berglund Supporting alignment with the Paris Agreement through investing in carbon removals Sustainable nature-based solutions provide a ready, proven and economically feasible solution for carbon removal,… Blog 19 October 2022 Sampsa Auvinen Sampsa Auvinen: Crisis is reshaping the global plywood market Can this be true? A modern factory producing high-quality FSC-certified plywood in Ghana? When… Blog 12 January 2022 Seela Sinisalo We are biodiversity Biodiversity has risen to the current sustainability discussions alongside climate change mitigation and climate… Blog 15 December 2021 Seela Sinisalo Learning to understand (and manage) climate risks Floods, typhoons and tornados, forest fires, drought, and extreme heat. Extreme weather conditions have… Blog 13 August 2021 Anne Valto, Juho Uusihakala Capturing adaptation opportunities By Anne Arvola and Juho Uusihakala, Finnfund; Mikko Halonen, Gaia Consulting Oy; and Linda… Blog 04 December 2020 Anne Valto Climate change adaptation = investment? Climate change adaptation in private sector financing – but how do you define adaptation… Blog 12 November 2020 Kenneth Söderling Beyond avoided emissions, DFIs seek carbon removals For quite some time, it has been acknowledged that global CO2 emissions need to… Blog 20 May 2020 Anne Valto Support to smallholder tree farming relieves the pressure on natural forests in Africa On my last two trips to Eastern Africa before the travel restrictions I felt… Blog 08 May 2020 Kenneth Söderling Sustainable cities need clean air – and investments to make it a reality Sustainable development goal 11 aims to make cities inclusive, safe, resilient and sustainable. It… Blog 20 March 2020 Ilkka Norjamäki Woodland or forest? Monoculture and plantation are terms that often are used when it comes to planting… Blog 07 August 2019 Juho Uusihakala Planting seedlings is only the first stage of growing a forest The UN Climate Panel IPCC publishes tomorrow its highly anticipated report on the impacts… Blog 31 March 2018 Ilkka Norjamäki Goodbye to the indigenous forests of Africa Unless there is a drastic change in our actions, it is highly likely that… Scroll left Scroll right