Biodiversity is highlighted as a priority within the EU resource efficiency roadmap (COM (2011) 571) , one of the flagships of the EU 2020 strategy, and in the 7th European Environmental Action Plan (Decision No 1386/2013/EU). The EU adopted in 2011 an EU Biodiversity Strategy to 2020, ‘Our life insurance, our natural capital'. It aims to halt biodiversity loss and the degradation of ecosystem services, restore them to the extent possible by 2020, and help avert global biodiversity loss. It sets targets in six main areas: the full implementation of EU nature legislation; maintaining and restoring ecosystems and their services; more sustainable agriculture, forestry and fisheries; tighter controls on invasive alien species, and a bigger EU contribution to averting global biodiversity loss. The EU Strategy emphasises the need to take full account of the economic and social benefits provided by nature contribution and to integrate these benefits into reporting and accounting systems. The Strategy also aims at delivering on global biodiversity commitments under the Convention on Biological Diversity and contributes to the new global 2030 Agenda for Sustainable Development.. A Mid-term review of the strategy was published in October 2015 (available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52015DC0478). The report concludes that progress has been made in establishing important policy frameworks: the new common fisheries policy, the Invasive Alien Species and Timber Regulations, and the introduction of biodiversity provisions in bilateral trade agreements, to name just a few. The reformed common agricultural policy provides opportunities for enhanced integration of biodiversity concerns but the extent of take-up by Member States will be decisive for success. Overall, the mid-term review shows that at the current rate of implementation, biodiversity loss and the degradation of ecosystem services will continue throughout the EU and globally, with significant implications for the capacity of biodiversity to meet human needs in the future. It concludes that the 2020 biodiversity targets can only be reached if implementation and enforcement efforts become considerably bolder and more ambitious. The EU’s Agenda for Change adopted in 2011 sets out the overarching development policy of the European Union. It states that development is not sustainable if it damages the environment, biodiversity and natural resources or increases exposure and vulnerability to natural disasters. Furthermore, it promotes a green economy that can generate growth, create jobs and help reduce poverty by valuing and investing in natural capital. In line with the Agenda for Change, a new EU flagship initiative – Biodiversity for Life (B4Life) – was created to support developing countries through efforts to halt biodiversity loss. It focuses on delivering support to regions suffering from biodiversity and ecosystem crises, such as deforestation, wildlife poaching and ecosystem function collapse, and by tackling biodiversity and ecosystem conservation in ways that also aid socio-economic development and poverty eradication. B4Life brings together under the same umbrella framework all EU-funded development cooperation projects and programmes that target biodiversity as principal objective, with the aim of ensuring better coherence and coordination. B4Life concentrates its operations in three priority areas: good governance for a sustainable management of natural capital; ecosystem conservation for food security and sustainable rural development; and ecosystem-based solutions towards a green economy. In 2014, the European Commission published a practical common framework for biodiversity-proofing the EU budget, which includes general guidelines for national and regional authorities and for Commission services, in order to ensure that spending has no negative impacts but supports biodiversity objectives. It also includes specific guidelines targeting national and regional authorities in Member States, for Cohesion Policy Funds, Common Agricultural Policy funds the Connecting Europe Facility, and the European Maritime and Fisheries Fund. Biodiversity-proofing of EU development cooperation has been addressed through the mainstreaming of environment and climate change. A compulsory environmental screening for any new development cooperation action addresses potential impacts on protected or vulnerable areas, ecosystem services, the introduction of alien species, and the use of fertilisers, pesticides or other chemicals. Programming has paid special attention to the potential for biodiversity protection and improvement. The EU has taken initial steps to reduce indirect drivers of global biodiversity loss, including wildlife trade, and to integrate biodiversity into its trade agreements. Further information can be found in the report accompanying the Mid-Term Review of the EU Biodiversity Strategy to 2020 (available at http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52015SC0187&from=EN).

The mid-term review of the EU Biodiversity Strategy to 2020 contains some illustrations of the benefits of achieving biodiversity targets in the EU . For example, at around EUR 5.8 billion, the annual costs of maintaining the EU Natura 2000 network are but a fraction of the economic benefits generated by the network through services such as carbon storage, flood mitigation, water purification, pollination and fish protection, together worth EUR 200-300 billion annually. There are also important economic benefits in combating invasive alien species (IAS), which have been estimated to cause damage of at least EUR 12 billion a year to the EU economy (whereas the cost of combating IAS has been estimated at EUR 1.46-1.47 billion a year and is expected to decrease to EUR 1 billion a year over time following the implementation of the EU Invasive Alien Species Regulation) . With the assistance of the European Commission and the European Environment Agency, all EU Member States are undertaking work on ‘Mapping and assessment of ecosystems and their services’ (MAES). The aim is to complete this work by 2020. The results will allow public decision-makers and private-sector stakeholders to capture the socio-economic values of the EU’s ecosystems in their decisions. Much of the bio-physical mapping and assessment has been completed and a number of reports have been published. A first report published in April 2013 provided an analytical framework for mapping and assessment of ecosystems and their services in Europe. The second mapping and assessment report was published in March 2014. It proposes indicators that can be used at European and Member State level to map and assess biodiversity, ecosystem condition and ecosystem services according to the Common International Classification of Ecosystem Services (CICES v4.3). In 2014, the first map of European ecosystems was published by the European Environment Agency. A first report on 'European ecosystem assessment - concept, data, and implementation' was published in June 2015. It contains an inventory of the best available data to be used. Work is under way to design and implement an integrated accounting system for ecosystems and their services at EU level, notably through the Knowledge Innovation Project 'Integrated system for Natural Capital and ecosystem services Accounting' (KIP INCA). The EU also supports activities on Natural Capital Accounting (NCA) at international level, e.g. by financially supporting the programme 'Wealth Accounting and the Valuation of Ecosystem Services' (WAVES) led by the World Bank and a project led by the United Nations Statistics Division and the United Nations Environment Programme focusing on the implementation of NCA in Brazil, China, India, Mexico and South Africa. The EU continues to support the global initiative 'The Economics of Ecosystems and Biodiversity' (TEEB), launched by Germany and the European Commission in 2007. The European Commission published a TEEB-inspired study on ecosystem accounting and valuation, 'A synthesis of approaches to assess and value ecosystem services in the EU in the context of TEEB' and is working on follow-up actions in the EU and its Member States. The EU also supports a new study 'TEEB for Agriculture & Food'. The study aims to provide a comprehensive economic evaluation of the ‘eco-agri-food systems’ complex, and to demonstrate that the economic environment in which farmers operate is distorted by significant externalities, both negative and positive. The underpinning rationale for the project is to make the externalities of economic production systems visible, with the ultimate aim of allowing decision-makers to capture these values in order to improve decision making from a holistic economic standpoint. In addition, the EU supports financially five developing countries (Ecuador, Bhutan, the Philippines, Tanzania and Liberia) in conducting TEEB country studies. The EU is a member of the Natural Capital Coalition (which evolved from TEEB), a global platform which brings together the many different initiatives and organizations working on natural capital under a common vision. It aims to develop a harmonised framework for natural capital valuation and accounting in the private sector and apply it in business decision making to facilitate the development of more sustainable long-term business models.

Some partial estimates of the funding needs for achieving the EU Biodiversity Strategy are available. However, they are only partial and it is not possible to derive an estimate of the financing gap at EU level at this stage, also bearing in mind that some actions would be financed by the Member States. The additional costs of achieving target 2 of the EU Biodiversity Strategy (which states that “by 2020, ecosystems and their services are maintained and enhanced by establishing green infrastructure and restoring at least 15% of degraded ecosystems") were estimated to range from EUR 0.5 to 11 billion per annum up to 2020, depending on different scenarios (the study that produced the estimates is available at http://ec.europa.eu/environment/nature/biodiversity/comm2006/pdf/2020/Fin%20Target%202.pdf ). The costs of fully implementing the Natura 2000 network are estimated at EUR 5.8 billion per annum.

Significant efforts have been made in the EU to encourage domestic support from the private sector. The re-launched EU Business and Biodiversity Platform (B@B Platform) provides an EU-level forum for sustained and strategic dialogue about the links between business and biodiversity. Through three separate thematic workstreams – on natural capital accounting; innovation for biodiversity and business; and access to finance and innovative finance mechanisms – the Platform aims to deliver tangible results by working with business to develop tools and approaches that integrate biodiversity considerations into business practice. The Platform also helps to coordinate and to raise awareness of innovative national and international initiatives on business and biodiversity, and showcase business best practices at EU level. The Platform has over 250 Members including over 20 multinationals, over 100 SMEs, 20 Member State representatives and numerous NGOs. B@B is a member of the Global Platform on Business and Biodiversity under the Convention on Biological Diversity representing the EU region. The B@B Platform's third workstream (on access to finance and innovative finance mechanisms) focuses on demonstrating the benefits to business, including SMEs, of biodiversity-related investments, as well as showcasing financing schemes for biodiversity and champions in the finance sector who are funding biodiversity-related projects or who are using nature-related criteria for financing decisions. In 2014, the workstream identified a range of biodiversity investment opportunities (e.g. pro-biodiversity business/certified products, biodiversity offsetting and habitat banking, Payment for Ecosystem Services schemes and bio-carbon markets, financial services), funds and financial instruments supporting investment in biodiversity in the EU and worldwide, and key actors in the financial sector championing integration of biodiversity into investment decisions. In 2015, the workstream developed a more detailed analysis of financial needs and opportunities in key areas of biodiversity action (certified products, offsets, green infrastructure, Payment for Ecosystem Services, biodiversity friendly businesses). The role of different sources of private and public sector finance, including EU funds, in addressing these needs and opportunities was also examined. The European Commission and the European Investment Bank (EIB) established in December 2015 the Natural Capital Financing Facility (NCFF), a new financial instrument which provides loans and investments to support projects in EU member states which demonstrate that the preservation of natural capital can generate revenues or save costs, whilst delivering on biodiversity and climate adaptation objectives. Currently there are clear barriers to the uptake of many natural capital projects, including lack of experience, long investment and project payback periods, and uncertainties about target markets, revenue streams and profit margins. The NCFF is a pilot to establish a pipeline of replicable, bankable projects that will serve as a "proof of concept" and demonstrate the attractiveness of such projects to potential investors. Eligible projects will address payments for ecosystem services, green infrastructure, biodiversity offsets and investments for innovative pro-biodiversity and adaptation businesses. The final recipients for NCFF are public or private entities, including public authorities, land owners and businesses. The total budget for the Investment Facility amounts to EUR 100 – 125 million for 2014-2017. The European Commission contributes EUR 50 million as a guarantee for the investments and finances a EUR 10 million support facility. In February 2015, the European Commission launched a study on biodiversity financing and tracking that inter alia aims to analyse in depth cases of payments for ecosystem services in order to identify barriers encountered, possible solutions and opportunities for financing biodiversity in the private sector. The study results are expected in the first half of 2016. The European Fund for Strategic Investments (EFSI), adopted on 25 June 2015 and covering a period of three years, also provides opportunities for innovative financing for biodiversity, e.g. by providing financing for investments in ecosystems in view of environmental and resource efficiency benefits. Horizon 2020, the EU Framework Programme for Research and Innovation (2014-2020), supports research and innovation relevant to biodiversity and ecosystem services, notably research on innovative nature-based solutions.