High level Sustainable Finance Forum at COP17 

Keynote speech – Beate Trankmann, UNDP Deputy Regional Director (15 minutes) 

Excellency Uchral Nyam-Osor, Prime Minister of Mongolia 

Excellency Sandag-Ochir Tsend, Minister of Environment and Climate Change   

Esteemed Mr. Bold Magvan, Chairman of the Mongolian Nature’s Legacy Foundation   

Distinguished Delegates, ladies and gentlemen  

It is an honour to join you for this Forum.  

And it is a delight to be back in beautiful Ulaanbaatar where I had the good fortune to work closely with partners from government and financial sector institutions during my four years as UNDP Resident Representative and UN Resident Coordinator.  

Excellencies,   

We are not here to debate whether land degradation and desertification is a crisis. We have enough evidence that identifies the top three long term risks for our global economy as extreme weather events, the loss of biodiversity, and critical changes to the earth’s systems.   

We are also acutely aware of the USD 878 billion that land degradation, desertification and drought are annually costing the global community.   

We are here to seek answers to the gaps in our global financial and policy architecture that has recently been highlighted in a UNEP (United National Environment Programme) report on Nature Finance. We are currently facing a stark 30 to 1 imbalance as stated in UNEP's latest State of Finance for Nature report ¹:  

• for every single dollar the world invests in protecting and restoring our nature, thirty dollars are spent in activities that actively destroy and degrade it.   

Globally, we direct a mere USD 220 billion annually towards nature-based solutions.  

Meanwhile, a staggering USD 7.3 trillion in public and private financing is directed towards nature negative activities- from unsustainable agricultural practices to harmful fossil fuel subsidies.  

The hard truth is that our financial systems are not just failing to address desertification but are underwriting it.   

This is not a failure of capital availability, but of capital direction. To meet our global climate, biodiversity, and land degradation neutrality targets and commitments, we must scale up nature-based investments at least 2.5 times to-- USD 570 billion annually.   

This sounds daunting, but it represents just 0.5% of global GDP.  

The rules of the game must change. We cannot expect to fill this gap solely with public funds while the global markets continue to run in the opposite direction.   

We must restructure the incentives, de-risk private investments, improve accountability and transparency systems while ensuring that every public dollar spent, acts as a catalyst for sustainable, resilient ecosystems.  

There is a growing trend in this direction. Countries investigating nature related risks to their economies, such as Mexico, Zambia or Malaysia, recognize this correlation and are taking corresponding action to mitigate (these) risks and capitalize on new win-win Nature-based solutions.   

Against this backdrop, I would like to suggest four key measures that align our capital with the very soil and water that sustain our economies.  

1. First: Re-examine and re-align public finance flows by systematically tracking domestic public and private expenditures that are key to advancing LDN (Land Degradation Neutrality) objectives.   

Public finance is the catalytic, and sometimes the primary source of finance for our environmental agendas. Governments must lead by example. For example, Indonesia with UNDP support, has put in place a budget tagging system that tracks expenditures towards climate change mitigation, adaptation and biodiversity conservation.  

Similarly, to help ensure synergies across finance streams and COP agendas, UNDP is also working with Ministries of Finance across the region and beyond to strengthen multi-partner Country Platforms that are designed to connect development finance, climate and nature finance rather than addressing these agendas through separate processes. One such country platform has been established right here in Mongolia.  

Local, sub-national governments are also following suit in major economic hubs such as Rio de Janeiro, Shanghai, and Mexico City where they are reviewing their environmental finance flows through localized modules to demonstrate how market-based instruments and public finance reforms can help close the global biodiversity finance gap.  

1. Second: Systematically identify counterproductive government subsidies that are currently incentivizing land degradation and actively redesign and green them.  

Over USD 1 trillion in public subsidies currently work against our ecosystems annually. We can start by unpacking their intended and unintended environmental, social, and economic impact. UNDP’s Biodiversity Finance Initiative (BIOFIN) is actively supporting more than 130 countries by aiding governments in this screening and repurposing process. The initiative has unlocked more than USD 2.7 billion in finance for nature assets. In Mongolia for example, the BIOFIN initiative assisted in doubling environmental expenditure from land and resource taxes to USD 11.9 million in 2023, with projections exceeding USD 22 million. These funds are directed specifically to fight desertification and soil degradation, which currently affects 77% of Mongolian soils². 

1. Third: Scale up restoration finance including through innovative revenue streams that are tailored to local ecosystems.   

In addition to disincentivising the financing of environmental degradation, we must explore innovative financial tools that generate dedicated returns, which can be directly reinvested into community-led Nature-based Solutions. These include national mechanisms such as Costa Rica’s National Payment for Ecosystem Services Fund but also livestock, property and land taxes, and ecosystem royalties, some of which already being pioneered here in Mongolia.  

This also requires developing investable project pipelines.   For example, the Platform for Investment Support and Technical Assistance (PISTA)—launched by the UNDP Rome Centre with Italian support—bridges the gap between policy and capital. It actively transforms abstract national environmental targets into highly bankable, investment-ready projects.  

1. Fourth: Actively de-risk nature positive businesses to mobilize private capital at scale, shifting the burden away from purely public funding.  

Currently, the private sector contributes a meager 10% of total investments aimed at protecting and restoring nature.³ To change this, governments must play a catalytic role.   

By utilizing blended finance, concessional loans, and first loss guarantees, we can derisk nature based, regenerative solutions such as sustainable agriculture and forestry enterprises. In doing so, we can turn nature-positive land management from a philanthropic exercise into a bankable, risk-adjusted opportunity for institutional investors.  

BIOFIN’s Tiger Landscape Conservation Facility is a case in point. Operating in Thailand, Malaysia, Bhutan, and Nepal, it includes a dedicated de-risking guarantee facility managed by UN Capital Development Fund (UNCDF) and a pipeline development facility to improve investment preparedness of relevant MSMEs. The facility aims to unlock up to $200 million in private commercial capital, transforming landscape conservation from a strictly public expenditure into a scalable, blended-finance market.  

Across all these priority actions, we have to make sure we put Indigenous Peoples and local communities, including pastoralists, women, and youth, at the center of our efforts. They are the real custodians of many of our lands, whether they are formal owners or informal and, in many cases, more sustainable users.    

Excellencies, Distinguished Delegates,  

Over the next two weeks here in Ulaanbaatar, our task is clear: we must bridge political ambition with bankable, structural solutions.   

We know the capital exists in the global economy. The challenge before us is no longer just mobilizing more money but fundamentally changing its direction. We must ensure that the trillions of dollars currently flowing against nature are urgently redirected to restore our soils, secure our water, and build resilient economies.  

It will take public and private actors and civil society to come together and partnerships across sectors to shape this fundamental transformation of our financial systems. UNDP stands ready to support this ambition.  

We are here to help you de-risk investments, develop green public incentives, broker relationships and unlock the private capital that your ecosystems demand.  

Before I close, let me thank our partners for their leadership and commitment to this agenda:  

Here in Mongolia: the Ministry of Environment and Climate Change, and Office of the President,  

Mongolian Nature’s Legacy Foundation and the Mongolia Sustainable Finance Association 

And globally: the UNCCD, the World Bank, the European Union, the Nature Conservancy, and the One UN flagship, the Partnership for Action on Green Economy – PAGE. 

Let us leave COP17 not just with a shared vision for a land-degradation neutral world, but with a concrete financial architecture to pay for it and a system that works for the people and the planet.    

Thank you and I wish us all a highly productive COP.