Protecting biodiversity has a major role in tackling climate change. However, a thriving natural environment can also support local appeal of a city or municipality. Following updates to its Green Bond Framework, MuniFin now offers green finance for projects that promote biodiversity.
Article Summary
- While carbon neutrality and climate action dominate public debate, the conversation around biodiversity remains less prominent. Biodiversity loss is deeply intertwined with the challenges of climate change and represents a major threat to humanity and our shared prosperity.
- In August 2025, MuniFin revised the criteria for its Green Bond Framework. Projects that enhance biodiversity and support climate change adaptation are now eligible for green finance.
- One such initiative is the restoration of the Tourujoki River in Jyväskylä, which has secured green finance to revitalise local ecosystems.
Climate change features daily in the media, with mitigation efforts focusing heavily lowering greenhouse gas emissions across a variety of sectors, e.g. energy, transportation and construction. By contrast, biodiversity protection and halting nature loss receive less attention — despite being equally critical issues.
Biodiversity underpins the planet’s habitability and diverse ecosystems are at the forefront of climate change mitigation. According to the UN, roughly a third of the greenhouse gas reductions needed over the next decade could be achieved by enhancing natural carbon sinks — land, forests and oceans. Biodiversity also ties to economic stability: the World Bank estimates that over half of global GDP is dependent on nature.
“Biodiversity loss is not yet as familiar to the public as climate action. Yet it is closely connected to climate change and, according to many experts, poses an even greater challenge,” says Anssi Wright, Senior Specialist, Sustainable Finance at MuniFin.
In the Finnish municipal sector, the country’s larger cities often lead the way in many developments. It is a similar matter when it comes to halting biodiversity loss.
“Last year, Finland’s ten largest cities issued a joint declaration at the Nature Forum to halt biodiversity loss and strengthen ecosystems. This September, the statement was updated. It’s inspiring to see these cities taking collective steps to tackle nature loss,” Wright notes.
Green finance expanded to biodiversity to support new projects
In Finland, municipalities are pivotal actors in climate work and biodiversity action: while legislation and broader targets come from a national level, projects and activities are planned and lead locally.
Municipalities supervise nature conservation and landscape protection in their area and can propose natural areas for protection. A key factor is also the municipalities’ authority on local land use: they are responsible for the planning of land use, its environmental impacts and making sure this supports ecological sustainability, outlined by the Ministry of the Environment (click to go to the ministry’s website).
The demand for green finance has grown significantly across the municipal sector – and the supply needs to follow. In early 2025, MuniFin launched its sustainability-linked loan to encourage municipalities to draw up and update their climate plans. The financial incentive is the loan’s margin discount.
In August 2025, MuniFin also updated its Green Bond Framework: this brought projects related to biodiversity and climate change adaptation for the first time under the umbrella of green finance. The aim is to better reflect the evolving picture of what municipalities are doing for the climate, environment and nature.
“Biodiversity protection and climate change mitigation are closely intertwined challenges,” Wright says. “We wanted to respond to future financing needs of municipalities and support their environmental goals more comprehensively.”
In addition to MuniFin’s clients, also the markets are beginning to pay more attention to biodiversity.
”Biodiversity is attracting increasing attention among investors. This speaks of a growing awareness of its critical role in sustainable finance”, MuniFin’s Sustainability Manager Elina Sääskilahti notes.
A new kind of project: restoring the Tourujoki river
The Tourujoki River restoration project, launched in 2024 in Central Finland’s regional capital Jyväskylä, aims at returning the river to as natural a state as possible. For MuniFin, it was also a fresh initiative: the project is the first biodiversity initiative to secure green finance through the updated framework.
“Our aim is to see the return of species that thrive in flowing waters once migration barriers are removed and habitats restored,” explains Jarmo Toikkanen, Green Construction Manager at the City of Jyväskylä.
Flowing near the city centre, Tourujoki is an integral part of the local cityscape. Biodiversity is at the heart of the project, but it also works to enhance the area’s appeal: the restoration is part of the wider development of the Kangas district, which will provide homes for 5,000 residents and around 1,000 jobs.
The City of Jyväskylä recognises the value of a vibrant natural environment — both for local residents and as a draw for the city as a whole.
“The restoration of the Tourujoki river has been widely anticipated by residents. I hope the revived river environment will become a scenic gem of the Kangas district,” says Toikkanen.