Biodiversity and the Financial System

Call for proposals on a research programme

This post is also available in Swedish

The Swedish Foundation for Strategic Environmental Research (Mistra) invites research groups, jointly with the finance industry, other businesses, civil society organizations, the public sector and other stakeholders, to submit proposals for a new research programme. The purpose of the call is to investigate how research and innovation can support the alignment of biodiversity’s needs with the financial system. In line with Mistra’s statutes, the research programme shall be of strategic environmental importance.


The diversity of life is one of the defining features of Earth. It is the result of millions of years of evolution and adaptation and the foundation from which future species and ecosystems will evolve. Its value cannot be confined to monetary terms, nor should the benefits it provides to human wellbeing and development be left unaccounted for.

In fact, undervaluation of biodiversity continues to be a fundamental – although increasingly recognised – problem of the functioning of our economic systems. Our inability to take biodiversity into account in policy, planning and business investment decisions is one of the main reasons why we have failed to halt the loss of species and the degradation of ecosystems, despite it being a political goal for decades (see, e.g., the 1993 United Nations Convention on Biological Diversity, CBD). Demonstrating the values of biodiversity more accurately, and its various roles in sustaining resilient ecosystems, would help illustrate that it must be protected, managed and restored for the future.

Despite the fact that 150 countries have signed the CBD, habitat and species loss continues to escalate in many parts of the world. As shown in the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) global assessment from 2019, ecosystems and biodiversity across the globe are in a state of rapid decline. 75 per cent of land surface is significantly altered, 66 per cent of the ocean area is experiencing increasing cumulative impacts, and over 85 per cent of wetlands (area) has been lost. The Dasgupta review, published in 2021, emphasizes the interlinkages between the economic system and the natural world. Nature, just like produced capital and human capital, is an asset. However, in the current economic system, the cost of depleting natural capital is hidden, as are the values of a great majority of the benefits that it provides human well-being and our economy. In fact, our economies, in the words of the Dasgupta review, “are embedded within Nature, not external to it”.

Markets play a leading role in directing the way in which human society interacts with nature. Human impact on biodiversity is largely defined by our production and consumption patterns. Economic markets have enabled the global population to maximize the benefit it gains from the ecosystem services that the natural environment provides. This extends far beyond food and the extraction of natural resources. Natural ecosystem service markets provide us with, for instance, the supply and filtration of water, the use of fertile agricultural land, and insurance for flood damage. Yet markets are not only failing to preserve global biodiversity, they are incentivizing and financing its destruction. Species abundance, ecosystem integrity and genetic diversity have all been driven downwards by land-use change, over-exploitation, climate change and pollution. This misalignment reflects broad weaknesses and failures in the global economy, including the design of global finance, both private and public. A well-developed body of literature on the human-induced impacts on biodiversity already exists, yet there has been comparatively little focus on the economic systems that incentivize these actions.

The current call for proposals is based on a background report that was prepared by an expert group (Appendix 1). The background report is intended to serve as a backdrop and inspiration for proposals, but this call text will be the basis for the evaluation.


The aim of the call is to overcome critical research gaps impeding the alignment of the financial system with the needs of biodiversity. The current research programme should focus on strategic environmental issues related to biodiversity, the financial system and relevant policy development. Transdisciplinary and interdisciplinary research collaborations, including natural sciences, computer sciences, social sciences and the humanities are encouraged. Interlinkages, interactions, conflicts and trade-offs between different goals are foreseen to be addressed in the programme, as well as potential solutions and their consequences. The programme should reflect and demonstrate its linkages to relevant ongoing policy processes at various levels, including the implementation of the Paris Agreement, the EU Taxonomy for Sustainable Activities, the Convention on Biodiversity (CBD), and the EU Biodiversity Strategy for 2030. All EU member states have committed to delivering the latter, including Sweden, and several of its components have important linkages to the current funding call. Decision making processes within the private sector, both independently developed and connected to legislative or policy frameworks (for example as above), are also of relevance in context of the current call.

The proposed research programme is expected to deliver on the overall aim on the call by addressing a selection of the below focus areas. All areas can be included, but this is not a requirement, and additional perspectives can be integrated. 

Biodiversity markets[1] This focus area addresses the potential of market-models as appropriate tools for biodiversity protection, including associated infrastructure and policies needed to support the development of well-governed biodiversity markets. Both modelling exercises that include forward-looking scenarios and case studies are relevant here, the latter drawing from the experience of specific jurisdictions, mechanisms or types of biodiversity. In addition, this focus area could include research to identify how markets and policy have led to pernicious links between global economic activity and biodiversity loss and, most critically, the actions that can be taken to decouple them.

[1] Biodiversity markets is a key concept in the background report, there defined as all exchanges in which biodiversity is implicitly or explicitly priced and known to at least one of the transacting parties.

Integrating biodiversity into finance: For climate, research around financial risks and opportunities has helped trigger a rapid increase in global demand for investment opportunities in low carbon assets. This has been generated directly through new knowledge production, and indirectly through the acceleration of granular, climate-related policy. In contrast, for biodiversity awareness is growing, but knowledge on how to integrate these aspects in the financial sector remains low. This focus area addresses how financial risks and opportunities can include the physical impacts of biodiversity loss and expected and unexpected policy and consumer responses. Relevant to this focus area is also the topic of materiality.

Building biodiversity into asset profiles: While there is an already well-developed and growing body of research around ecosystem services, their      valuation and the role of biodiversity in ecosystem services, there is still a knowledge gap in connecting this understanding and data to the way in which market systems operate today. The ecosystem services most closely linked to biodiversity, for example, are not consistently or explicitly reflected in pricing systems or decision-making, nor are the direct or indirect biodiversity impacts of the products and services that we consume. This focus area explores and clarifies how we can translate existing data and research on biodiversity-derived ecosystem services into formats and standards expected of prospective investments.

Quantifying biodiversity: Measuring and valuing biodiversity still involves numerous challenges and complexities which have not yet been resolved. The use of state-of-the-art data science and AI techniques to capture key aspects of biodiversity can be of relevance here, as well as research building on, broadening and consolidating, previous methods of quantification of biodiversity, such as Life Cycle Assessment and Environmental Impact Assessment. This focus area addresses research questions around metrics, data, uncertainties and gaps, as well as possible biases and ethical concerns.   

Governing market-based approaches:  A careful balance is needed between the scalability provided by biodiversity markets, on the one hand, and the control provided by management and protection, on the other. This focus area addresses this balance, investigating where a market-based approach might be appropriate and where not, and how different approaches can be effectively combined to not interfere with robust public policies. Relevant considerations to integrate throughout the programme are: What are the risks associated with the monetization of biodiversity services and assets? How can these markets be constructed and governed to avoid or mitigate these risks?

Programme planning should cover four years, but with an eight-year perspective. It is vitally important to involve stakeholders and partners right from the planning stage and further on, throughout the research process. Interdisciplinary collaboration is expected in the programme. Relevance and anticipated impact of the research programme must be described in the programme proposal and should be presented visually in a one-page appendix using impact logic.

The programme should be designed so that its purpose can be fulfilled with a minimum of climate/environmental impact.

Who can apply

The call addresses research groups in all academic disciplines working at higher education institutions and research institutes, as well as stakeholders such as the financial sector and other businesses, civil society organisations and the public sector.  Researchers and organisations active outside Sweden may participate, but the principal applicant and planned programme host must be a Swedish institution. Only legal entities can apply for funding. The host institution and other organisations taking part are expected to be coordinated in a consortium and to submit a joint proposal.

Special conditions

  1. Co-funding with at least an additional 10% from private sector/industrial partners is required. The co-funders’ contributions may be partly in-kind, such as staff involved in the programme. The co-funding expected must be reported in the proposal and attested with a certificate from the planned programme host.
  2. Current rules concerning indirect costs: see Appendix 2. Please note that Mistra has a new model for funding of indirect costs from 2021-09-15.

Application process and review 

The application must be written in English, with a summary in Swedish. It must consist of the following parts and appendices and comply with page limits specified. If the proposal exceeds any of the page limits it will not be processed. No appendices other than those listed below may be attached.

The main part of the proposal (a maximum of 40 pages excluding front cover) must include the following parts:

Summary in English and Swedish

  1. Vision, aims and expected impacts (impact logic in appendix I)
  2. Scientific value, including state-of-the-art
  3. Benefits to society
  4. Management and organisation
  5. Skills and networks
  6. Description of work packages, including deliverables
  7. Communication
  8. Budget (use the budget template)

The following appendices must be attached:

I. Impact logic (see basic example in Figure 1, one page maximum visual illustration)

II. CVs for up to 10 key people (maximum of one page per person)

III. Certificate from planned programme host

Figure 1: Basic example of the structure of an impact logic model.


Note that the following must be clearly specified on the front cover of the programme proposal: (a) preliminary programme title, (b) planned programme host, (c) planned programme director and (d) contact person for the proposal, with full contact details.

Although 40 is the maximum number of pages for the main part of the proposal, reaching this number is not a target as such. Writing concisely and readably is in every applicant’s interest. If approved, the proposal will serve as the basis for the plan that steers the programme.

Attached to the proposal must be a certificate (Appendix III) that the planned programme host (and also the main applicant) is prepared to assume the role of hosting the programme and to make the requisite resources available, and also accepts Mistra’s rules regarding indirect costs. This certificate must be signed by the Vice-Chancellor or Chief Executive.

Mistra programmes are supported by an external board. Please note that neither proposed board members nor advisory boards, reference group members etc should be named in the application, as this increases the risk of conflict of interest in the evaluation process. The external programme board, which is appointed at a later stage in consultation with Mistra, determines the use of the programme’s strategic reserve. In the budget, applicants must allocate 10% for this reserve.

Mistra supports equitable, gender-equal and inclusive solutions to strategic environmental problems. To this end, applicants should design their programmes so that the results can benefit broad groups.  Mistra programmes should strive to be gender balanced and when relevant include aspects of equality and inclusion within their research areas.

Note that heading a Mistra programme is normally a full-time commitment and that every programme is expected to have a communications officer, and a well-considered and clearly defined budget for communication, utilization and implementation. Expertise around impact and policy processes is also highly relevant for the proposed programme. It is advisable to read the section on ‘Managing Mistra programmes’ (

Mistra intends to award research funding for one (1) of the programme proposals submitted. It is not possible to apply for funding for individual projects within the scope of this call.

Please observe that Mistra is subject to the principle of public access to official records. This means that all documents received by Mistra, including proposals and applications, are public. On certain conditions, information may be treated as confidential.

Personal particulars received are managed in accordance with current legislation on data protection. For more information, see Mistra’s data privacy policy (

The proposal should be sent as a single pdf file (including appendices) by email to, to reach Mistra not later than 20 December 2021 at 4:00 pm.

Evaluation criteria

Proposals will be evaluated against the criteria below, in which potential for environmental problem-solving and contribution to sustainable development are crucial.

  1. Approach, i.e. how far the programme has a central, coherent idea and an innovative direction, as described in a well-defined impact logic.
  2. Scientific quality, i.e. how well the programme meets the requirements of advanced research expertise, theoretical proficiency and methodological quality.
  3. Benefits, i.e. how highly developed the collaboration with users of the research results is (and is expected to be), and which supportive communication processes and methods will be used to attain effective implementation.
  4. Management and organisation, i.e. the manner in which the programme will be integrated in the host organisation, how it will be governed and structured, and to what degree it will make efficient use of resources and integrate stakeholders’ perspectives from start.

An international expert panel will evaluate all research proposals that meet the formal criteria of the call. Hearings may be part of the process.



16 September                      Call opens

20 December                       Call closes 16.00


January-February                 Proposals are evaluated

March                                    Funding decision by Mistra’s Board

June                                      Programme start (preliminary)


Information meeting about the call

On October 6 2021, Mistra held a briefing on the call Biodiversity and the Financial System. Q&As followed the presentation. To watch the whole meeting, click below. Q&As below “Documents”.