Nature, Risk, and Capital Markets

The decline of nature and biodiversity is creating systemic risks for economies, industries, and financial markets, all of which fundamentally depend on healthy ecosystems. At the same time, the imperative to finance conservation, restoration, and biodiversity protection raises complex questions about the scale of capital required, how it can be mobilized, and what role financial markets should play. These two agendas—managing nature-related financial risks and mobilizing finance for nature outcomes—are often conflated, undermining both effective risk mitigation and adequate nature finance.

This course rigorously distinguishes between these dimensions. Students will learn how nature-related risks propagate through firms, sovereigns, supply chains, and financial institutions, and how these risks are measured, priced, and disclosed. Separately, the course examines financial instruments and market structures designed to finance biodiversity protection and ecosystem restoration. Students will explore biodiversity credits, nature-linked bonds, rhino bonds, debt-for-nature swaps, structured conservation products, and nature-based solutions (NbS) alongside foundational scientific concepts, global biodiversity governance, political economy, and emerging disclosure regimes such as TNFD.

The course culminates in a final project integrating ecological understanding, measurement frameworks, sovereign and firm pricing, financial engineering, and policy analysis.