Highlights

Although not sufficient to achieve all biodiversity goals, conservation remains a key component in global biodiversity efforts, as reflected in the World Bank’s portfolio. For the first time, we mapped 526 World Bank–supported protected area sites (out of 880 identified sites) in 130 projects approved between FY 2010 and FY24.

We examined geographic representativeness and found that the World Bank prioritizes biodiversity conservation in areas with high species richness, with 85 percent of 880 protected sites located in dry (45 percent) and humid (40 percent) tropics. Conservation funding for deserts, drylands, mangroves, temperate forests, and flooded grasslands remains low, despite their ecological importance. This pattern is reflective of wider trends in global conservation finance.

The World Bank’s monitoring and, therefore, evidence of biodiversity outcomes are limited. There is a lack of robust monitoring and reporting on biodiversity outcomes. As a result, the ability to credibly demonstrate and learn from biodiversity gains or losses is constrained. This shortfall is rooted in both project design and strategic gaps, including a lack of biodiversity experts able to support clients in incorporating appropriate ecological change metrics into projects at the preparation stage and accounting for these changes over time.

Tree cover data show that, in the context of rapid global deforestation, World Bank–funded protected areas in tropical forests have on average succeeded in maintaining tree cover. Of the 526 protected area sites that we could map, 448 are in tropical forest areas. Using geospatial analyses, we estimate that the 448 sites, on average, maintained tree cover at a rate of +2.0 percent after project close.

The World Bank has applied landscape and seascape approaches to address biodiversity loss and increase resource productivity, though most projects lack reporting on species composition, ecological change, or tenure security.

Although Indigenous Peoples and local communities demonstrate effectiveness in protecting biodiversity, the World Bank infrequently identifies, engages with, and protects them in its conservation efforts; when it has, it has concentrated activities in just a few countries. The share of conservation-focused projects that identify, engage with, and protect Indigenous Peoples and local communities in conservation, as measured by Environmental and Social Framework policies specific to Indigenous Peoples, indicates a relative decline when compared with the share under the safeguard policies.

Most World Bank efforts to support sustainable financing for conservation including endowment funds, payments for environmental services, and ecotourism were successful, but these efforts have decelerated since 2015. More recently, the World Bank has led the way by developing and demonstrating the potential of innovative biodiversity-related financial instruments, including for blue bonds and wildlife bonds. Continued learning is essential to determine their replicability, scalability, and effectiveness in achieving biodiversity outcomes.

Although insufficient to reach biodiversity goals on its own, conservation remains a critical component of global biodiversity efforts. Conservation is crucial for biodiversity, preventing species extinction, maintaining ecosystem services, and boosting ecological resilience. Conservation supports human well-being by preserving ecosystem functions such as pollination, water purification, and carbon sequestration (Díaz et al. 2019). Protected areas, habitat restoration, and species management effectively slow biodiversity decline; without them, bird and mammal extinction rates would be much higher (Bolam et al. 2021). Well-managed marine protected areas increase fish biomass and biodiversity (Edgar et al. 2014). A global study found that protected areas are 33 percent more effective at reducing habitat loss, including deforestation, than unprotected areas, while also noting the limited ability of protected areas to mitigate human pressure, as well as variability in relation to management practices, enforcement, and size (Li et al. 2024). This chapter covers World Bank support for conservation activities. It does not cover IFC or MIGA because they do not finance conservation.

World Bank support for protected areas (and other effective area-based conservation measures) was higher in FY10–15 but has remained broadly consistent over the past decade (FY15–24), aligning with funding replenishment cycles. The World Bank frequently established protected areas to prevent biodiversity loss. We identified 139 lending projects approved between FY10 and FY24 that included conservation activities. Within these projects, we identified 880 conservation areas. While figure 2.1 shows a decrease in World Bank–financed protected areas since FY10–15, it also indicates that support has remained consistent since then. The Environment, Natural Resources, and Blue Economy Global Practice manages 80 percent of the portfolio, which is mostly located in Latin America and the Caribbean and Sub-Saharan Africa. The project activities include the following:

1. The development and management of protected areas, tourism, employment, and livelihoods
2. Wildlife protection and management; the prevention of poaching, trafficking, and human–wildlife conflict; habitat preservation; and the conservation of endangered species
3. Policies and institutions, legal and regulatory frameworks, capacity building, and financing

Figure 2.1. World Bank–Financed Protected Areas over Time

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Figure 2.1. World Bank–Financed Protected Areas over Time

 

Source: Independent Evaluation Group, with WDPA data from April 2025.

Note: Protected areas referenced by the World Bank that could not be matched with the WDPA are shown in light green; those that could be matched with the WDPA are shown in dark green. This chart includes duplicate protected areas if they have received support from multiple projects over time. WDPA = World Database on Protected Areas.

The identification of good conservation practices from the literature and World Bank commitments yielded five areas of inquiry, around which this chapter is organized. The five assessment areas are (i) geographic representativeness, or the equitable and proportional representation of different biomes, ecosystems, and taxonomic groups; (ii) engagement and protection of IPLCs; (iii) ecological outcomes, monitoring, and reporting; (iv) ecological connectivity, or the unimpeded movement of species and the flow of natural processes that sustain life across ecosystems, including shifts from fragmented protected areas to landscape approaches; and (v) sustainable finance.

Geographic Representativeness

Geographic representativeness, a principle enshrined in the GBF, ensures that conservation areas cover all major ecosystems and species distributions. A diverse network of protected eco-regions boosts ecological resilience, maintains ecosystem functions, and helps species adapt to climate change threats. Focusing conservation efforts on popular parks, for example, leaves many species and habitats vulnerable to decline or extinction. Reflecting this importance, global targets call for ecological representativeness in conservation efforts (CBD 1992, 2010; GBF target 3). By 2020, 15 percent of land and 7 percent of marine areas were classified as protected globally, but there were notable regional disparities (UNEP-WCMC and IUCN 2021). Arid areas and tropical dry broadleaf forests face especially low protection (Biber et al. 2022; Gaisberger et al. 2022). Other systems such as temperate grasslands, Mediterranean woodlands, peatlands, and the deep ocean also have low conservation coverage (Hoekstra et al. 2005). Expanding protections to these underrepresented biomes is crucial for achieving the global 30×30 target.

The World Bank has focused its biodiversity conservation efforts on areas with high biodiversity richness, or endemism, within specific biomes in the tropics. Using geospatial analysis, we determined that 448 conservation sites in the portfolio of 139 projects are located within two main forest biomes: dry tropics (53 percent) and humid tropics (47 percent). Using a classification of 14 distinct biomes, we then determined that most conservation sites were positioned within tropical and subtropical moist broadleaf forests and tropical and subtropical grasslands, savannas, and shrublands. The concentration of project sites in the former category is mainly due to activities in the Amazon Basin, the Congo Basin, the southern part of West Africa, and Southeast Asia.

The World Bank’s portfolio has limited coverage of subtropical regions, deserts, and mangroves, which are also underrepresented in global conservation efforts. Overall, clients managing significant desert, dryland, and mangrove areas are receiving less support (see figures 2.2 and 2.3). Only 4.8 percent of World Bank conservation sites are in tropical and subtropical dry broadleaf forests. Deserts and xeric shrublands make up 18 percent of the global biome data set and support high biodiversity, including many endangered species (IUCN 2011). However, desert biomes account for just 2.2 percent of World Bank conservation sites. Deserts host 6 percent of the world’s population (Mortimore et al. 2009), who often rely on these ecosystems for livelihoods, food security, and climate resilience.1 Less than 2 percent of World Bank conservation sites overlap with mangroves.2

Figure 2.2. World Bank Project Sites with Biodiversity Conservation Activities Across Biomes

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Figure 2.2. World Bank Project Sites with Biodiversity Conservation Activities Across Biomes

Source: Independent Evaluation Group.

Note: This map has been cleared by the World Bank Group cartography unit.

Figure 2.3. World Bank Project Sites Across Sub-Biomes

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Figure 2.3. World Bank Project Sites Across Sub-Biomes

 

Source: Independent Evaluation Group.

Note: n.a.= not applicable;This map has been cleared by the World Bank Group cartography unit.

Identifying, Empowering, and Protecting Indigenous Peoples and Local Communities to Achieve Conservation Aims

There is compelling evidence that Indigenous Peoples are more effective stewards of biodiversity-rich landscapes than other groups. Indigenous Peoples, representing 6 percent of the population, manage more than a quarter of the world’s land surface, including 40 percent of terrestrial protected areas and intact landscapes, and one-third of global intact forests (Fa et al. 2020; Garnett et al. 2018; ILO 2019). Forests under Indigenous management are less prone to deforestation and degradation than those managed by external entities (Busch and Ferretti-Gallon 2023; Fa et al. 2020; FAO and FILAC 2021), with their stewardship reducing agriculture-driven deforestation (Pratzer et al. 2023). Biodiversity declines more slowly in Indigenous-managed lands, and these areas offer better restoration and carbon storage (Busch and Ferretti-Gallon 2023; Porter-Bolland et al. 2011; Stevens et al. 2014). Approximately 42 percent of global lands in good ecological condition are within IPLC lands (WWF et al. 2021).

Unlocking Nature-Smart Development: An Approach Paper on Biodiversity and Ecosystem Services highlights the essential role of IPLCs in achieving biodiversity goals (World Bank Group 2021). The paper states that effective conservation of natural habitats requires placing IPLCs, who rely on and help conserve nature, at the center. These communities have deep, place-based ecological knowledge developed over millennia, enhancing biodiversity preservation (Dawson et al. 2024). Good governance (including land tenure security), equitable benefit sharing, and the preservation of local knowledge are crucial for their contribution to conservation (IPBES 2019).

Yet the World Bank infrequently supports conservation activities within IPLC areas, and when it does, it tends to concentrate its activities in just a few countries. Evaluating the relationship between World Bank projects and IPLC lands is crucial for assessing the inclusivity and effectiveness of conservation efforts. Geospatial analyses show that 6 percent of project sites (35 out of 585) are located within IPLC lands, with 12 project sites overlapping Indigenous Peoples territories and 23 located within local community lands (table 2.1; LandMark platform data)—a minor overlap considering the extensive biodiversity encompassed within IPLC lands. These sites span eight countries: Brazil, Colombia, the Democratic Republic of Congo, Mexico, Mozambique, Panama, Peru, and Zambia. Because the LandMark data set underidentifies Indigenous Peoples lands in Africa, we used Garnett et al. (2018), which identifies 83 project sites within Indigenous Peoples lands, representing 14.2 percent of World Bank conservation sites.3

Source: Independent Evaluation Group.

The share of conservation-focused projects that identify, engage, and protect IPLCs in conservation, as measured by ESF policies specific to Indigenous Peoples, indicates a relative decline compared with the share under safeguard policies. Analyzing the incidence of conservation projects that apply the World Bank’s Operational Policy (OP) 4.10 (Indigenous Peoples) and the subsequent ESS7 (Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities) implemented from October 2018 onward, we note a decline in the proportion of projects using these policies to identify, engage, and protect Indigenous Peoples. Whereas 52 percent of conservation projects (49 out of 94) under safeguards applied OP 4.10 (Indigenous Peoples), 25 percent of conservation projects (8 out of 32) under the ESF applied ESS7 (see figure 2.4). This trend is most evident in Sub-Saharan Africa, where most conservation projects are based. The number involved is limited, especially under the ESF, so this trend merits further analysis since new ESS7 provisions and clarifications could reasonably have been expected to increase ESS7’s application in comparison with OP 4.10.

Figure 2.4. Share of Conservation-Focused Projects Applying Operational Policy 4.10 Versus Environmental and Social Standard 7

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Figure 2.4. Share of Conservation-Focused Projects Applying Operational Policy 4.10 Versus Environmental and Social Standard 7

 

Source: Independent Evaluation Group.

Note: The conservation portfolio includes 126 investment project financing projects (of a portfolio of 139) and excludes development policy financing and category C/low-risk projects. ESS = Environmental and Social Standard; OP = Operational Policy.

Projects in Sub-Saharan Africa under the Dedicated Grant Mechanism for IPLCs—which aims to provide direct support, enabling their participation in sustainable forest management—lack environmental and social risk management policies specific to Indigenous Peoples. The Dedicated Grant Mechanism is a Climate Investment Fund financing window that provides direct grant support to IPLCs so that they can contribute time-tested approaches to protecting and managing the natural environment. Among the 15 Dedicated Grant Mechanism projects within the scope of this evaluation, OP 4.10 or ESS7 was applied across all 9 projects located in East Asia and Pacific, South Asia, Latin America and the Caribbean, or globally. However, only 2 of the 6 Dedicated Grant Mechanism projects for IPLCs in Sub-Saharan Africa applied a risk management policy specific to Indigenous Peoples (1 in the Democratic Republic of Congo applied OP 4.10), and the only Sub-Saharan African Dedicated Grant Mechanism project under the ESF, in the Republic of Congo, applied ESS7.

Document reviews and interviews highlight several factors that may be contributing to the limited engagement of IPLCs in World Bank conservation activities:

• In the conservation portfolio, the World Bank tends to support Indigenous Peoples who have existing legal recognition and clear collective land and resource rights under national law. According to our review of World Bank project documents, projects hosted by countries that have applied both OP 4.10 and ESS7 in the conservation context always protect or engage Indigenous communities that are recognized by the government and that possess collective land tenure rights recognized under national law. Further, the same Indigenous groups tend to be protected under both OP 4.10 and ESS7, and most of these groups have legally recognized land rights.
• Engaging Indigenous communities may present new challenges because of new ESF requirements for free, prior, and informed consent under specified circumstances that may be especially common in the conservation context. Under the safeguard policies, only free, prior, and informed consultation was required. Furthermore, circumstances that are unique to or especially common in Indigenous territories may make project implementation more complex. A deeper understanding of these dynamics requires an examination of project siting decisions, including the criteria used, the stakeholders involved, the obstacles encountered by environmental and social professionals, and the policy considerations shaping conservation efforts.

Most conservation projects involve land or resource restriction risks that, if left unattended, can cause significant economic and social harm to IPLCs. Eighty-four percent of the World Bank conservation projects applied environmental and social risk management policies concerning land and resources, specifically OP 4.12 (Involuntary Resettlement) under the safeguard policies or ESS5 (Land Acquisition, Restrictions on Land Use and Involuntary Resettlement) under the ESF. Unresolved concerns about potential or realized restrictions on resource access can escalate, as illustrated by the Tanzania Inspection Panel (box 2.1).

Ecological Outcomes, Monitoring, and Reporting

Most World Bank projects with conservation activities do not monitor ecological outcomes. Quantitative ecological monitoring is crucial for understanding biodiversity outcomes. By tracking species abundance, dispersal, genetic diversity, and ecosystem function, the effectiveness of conservation efforts can be evaluated. Advances in remote sensing, spatial data, and AI-based image monitoring enhance ecological monitoring possibilities. Yet only 14 of the 139 projects in the World Bank portfolio with dedicated conservation activities include indicators measuring ecological outcomes.4 More significantly, we found that only 39 of 3,049 indicators could yield ecological information related to the projects’ conservation aims. These indicators included data on species richness, ecological integrity, and ecosystem health, as well as sightings of key species, wildlife abundance indexes, bioindicators, habitat representation rates, and vegetation metrics. The most frequently occurring indicator, the Management Effectiveness Tracking Tool (METT), co-designed by the World Bank, allows comparisons of important process factors globally but lacks information on ecological outcomes.

Tree cover data show that, in the context of rapid global deforestation, World Bank–funded protected areas in tropical forests have on average succeeded in maintaining tree cover. A systematic review of 52 peer-reviewed studies confirms that tree cover change is a valid proxy for biodiversity in tropical forest ecosystems, reporting significant positive correlations between tree cover and biodiversity indexes. Forests—especially tropical ones—harbor a large share of terrestrial biodiversity, and changes in tree cover correlate with changes in species richness and ecosystem health. Tree cover reflects ecosystem structure and connectivity, both of which are critical for sustaining diverse biological communities. While it is a coarse proxy, it is often used when consistent, large-scale biodiversity data are lacking. Of the 526 protected area sites that we could map, 448 are located in tropical forest areas. Using geospatial analyses, we estimate that the 448 sites, on average, maintained tree cover at a rate of +2.0 percent after project close and +3.1 percent during and just after implementation. This shows that these protected areas have helped maintain tree cover and have likely stemmed biodiversity loss in tropical forest areas.

The World Bank helped strengthen management capacity for many Sub-Saharan African protected areas that have maintained or increased their tree cover. The baseline METT scores for closed projects with support for protected areas in Sub-Saharan Africa (25 projects) reveal that the World Bank targeted protected areas with low institutional capacity (or a low METT baseline), as shown in figure 2.5. Protected areas with such low baseline scores are considered “paper parks,” or protected areas that exist in name only. We also find that in closed projects, World Bank–supported Sub-Saharan African protected areas have improved management effectiveness by about 20 percentage points, on average, as depicted in figure 2.5. The average tree cover in Sub-Saharan African protected areas for closed projects with a METT score (25 projects encompassing 98 protected areas) is 1.9 percent, which is on par with the average for all projects with protected areas approved between FY10 and FY14. There is, of course, variation in tree cover in the Sub-Saharan Africa portfolio; these trends are discussed next.

Figure 2.5. Management Effectiveness Scores in Sub-Saharan African Protected Areas, by Subregion

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Figure 2.5. Management Effectiveness Scores in Sub-Saharan African Protected Areas, by Subregion

 

Source: Independent Evaluation Group.

Note: This figure is based on a subset of 33 indicators from 17 projects in Sub-Saharan Africa (of 25) that tracked METT score indicators in a comparable way that could be aggregated. METT = Management Effectiveness Tracking Tool.

Enhanced protected area management can be linked to maintained tree cover in most World Bank–supported protected areas in Sub-Saharan Africa. Tree cover gain is associated with repeat investments, while loss occurs in situations of protracted conflict. In the FY10–19 cohort, 63.6 percent of Sub-Saharan African protected areas had near-stable tree cover (±3 percent, exclusive), 30.2 percent increased by at least 3 percent, and 6.2 percent declined by at least 3 percent. Protected areas that gained tree cover tended to receive more than one round of project support.5 Protected areas in proximity to high-intensity conflict, however, lost more tree cover on average than protected areas in more stable locations. For example, in both Burundi and Mozambique, protected areas located in regions that experienced conflict events saw declines in tree cover, whereas protected areas in more stable parts of the country saw tree cover gains.6 World Bank analytical work highlights the benefits of staying engaged in conflict-affected situations to maintain biodiversity gains, including by partnering with local communities (box 2.2). Other factors that explain performance have to do with the intended use of the protected area and its associated level of protection. In Malawi, forest cover increased in national parks and wildlife reserves managed by the Department of National Parks and Wildlife, but it decreased in forest reserves managed by the Forestry Department, which suffered from low budget, staffing, and enforcement capacity. Teasing out further performance factors across the protected area portfolio could yield useful insights but would require expanded analyses outside of the scope of this evaluation.

Ecological Connectivity

Ecological connectivity—the unimpeded movement of species across landscapes and seascapes—is vital for biodiversity conservation. It supports genetic exchange, species dispersal, and ecosystem resilience, which are all crucial for sustaining biodiversity amid environmental changes (Hilty et al. 2020). Fragmentation from human activities and climate change isolates populations, causing genetic bottlenecks and local extinctions (Hilty et al. 2020). Connectivity structures such as ecological corridors, stepping-stone habitats, wildlife crossings, and marine protected area networks are effective in supporting biodiversity.7 Current efforts focus on landscape and seascape strategies, policies, and restoration to address biodiversity loss.

Ecological Corridors

Although the World Bank has infrequently supported connectivity structures when financing terrestrial protected areas, when it has done so it has been effective. A notable case is in the Brazilian Amazon. Only one-fifth (n = 18) of the projects supporting terrestrial protected areas helped develop, rehabilitate, demarcate, or expand ecological corridors. The World Bank’s support for Brazil’s Amazon Region Protected Areas is a notable exception and has seen exceptional results. In Amazon Region Protected Areas, the World Bank helped protect 60 million hectares of land by establishing large contiguous protected areas rather than isolated patches; setting up buffer zones and sustainable-use areas to create stepping stones for species movement and reduce habitat fragmentation; and linking Indigenous and conservation areas, allowing species movement and sustainable use of resources while respecting Indigenous land rights. Studies that include geospatial analyses show that deforestation rates were significantly lower in Amazon Region Protected Areas than in unprotected areas (Pellin et al. 2022; Soares-Filho et al. 2010).8 Elsewhere, our geospatial analyses—conducted for 35 areas in six closed projects that supported physical connectivity policies and actions—show that 66 percent of these areas increased tree cover between 2016 and 2024 (and had outcomes rated moderately satisfactory or better and positive protected area management effectiveness scores).

Landscape and Seascape-Level Approaches

The World Bank has worked to integrate biodiversity and ecosystem services into landscape and seascape management, beyond protected areas and corridors. Unlocking Nature-Smart Development: An Approach Paper on Biodiversity and Ecosystem Services recognizes that corridors are important for supporting ecological connectivity but alone are insufficient to prevent habitat loss and fragmentation. Rather, in line with the literature, the World Bank promotes landscape-level approaches that seek to balance ecological, economic, and social goals, including by addressing the drivers of biodiversity loss. Between FY10 and FY24, the World Bank approved 59 projects using a landscape-level approach that includes conservation activities; most of these projects were in Latin America and the Caribbean and Sub-Saharan Africa, with some emerging in East Asia and Pacific and in Europe and Central Asia. The projects seek to use territorial planning—integrating land, water, and biodiversity considerations—to optimize ecosystem services and manage competing land use. They emphasize coordination, policy alignment, participation, and decentralized management. Tools such as small grants promote economic diversification and reduce pressure on fragile ecosystems. The Independent Evaluation Group’s 2021 assessment of Madagascar’s Third Environment Program Support Project highlights the need for an integrated approach to address the drivers of biodiversity loss (box 2.3).

Landscape-level projects often do not report on ecological considerations, such as species composition, or on outcomes. Landscape-level projects with conservation aims support afforestation, reforestation, or native forest restoration. The composition of trees and other species is crucial for optimizing biodiversity in landscapes. Native mixed species planting or natural regeneration can restore ecological and sustainable balance, as demonstrated by the World Bank’s restoration activities in the Atlantic Forest (box 2.4). Using nonnative or monoculture species can harm biodiversity and resilience by reducing soil fertility, altering hydrology, or supporting fewer native species. Yet only 44 percent of landscape-level projects with conservation activities (26 of the 59 projects) include species choice, and just 1 measures actual plantings (the Rwanda Volcanoes Community Resilience Project tracks the proportion of native tree seedlings). Also, only 2 of the 59 projects captured vegetation change using the Normalized Difference Vegetation Index, while correcting for natural variability to strengthen the analysis robustness (in the Nigeria Agro-Climatic Resilience in Semi-Arid Landscapes Project and the Ghana Sustainable Land and Water Management Project). The rest use area-based indicators (93 percent) or relegate measurement to the boundaries of protected areas (mostly using the METT). Without systematic monitoring and reporting on ecological outcomes, gaps remain in assessing species survival, ecosystem services, and ecological trade-offs.

Landscape-level approaches also fall short of achieving intended land and resource rights activities to ensure sustainable biodiversity gains. Secure land and resource rights foster sustainable land management, encourage investments in conservation practices, and reduce conflict (IPBES 2019; Larson 2011; UNCCD 2019). Ninety-three percent of the 59 landscape-level projects cite the need to secure communities’ land, tenure, or resource rights, of which 39 financed a relevant activity. These activities included commitments to strengthen community-led resource governance (n = 33); tenure regularization or formalization (n = 16); and legislative or regulatory reforms (n = 5). However, projects with commitments to strengthen community rights mainly reported on participation in resource management deliberative bodies (for example, community forest or watershed management committees; 20 out of 33 projects); 5 out of 16 projects tracked progress on tenure regularization and formalization;9 and 2 out of 5 projects tracked regulatory reforms. The conservation activities supported in Mozambique exemplify how strengthening community land and resource rights can support biodiversity (box 2.5).

Biodiversity in Seascapes

The World Bank’s marine biodiversity conservation efforts often highlight land–sea connectivity for sustainability, but many opportunities are missed. Twenty-eight of 46 marine conservation projects support land–sea connectivity, adhering to global best practices in environmental planning and integrated management strategies. These projects consider how upstream activities, such as agriculture or urban development, affect downstream marine environments. Best practice examples are illustrated in box 2.6. Eighteen (of 46) marine conservation-focused projects neglect land–sea connections. For example, the Senegal Natural Resources Management Project focuses on land conservation but fails to address runoff affecting coastal biodiversity. The Grenada Second Fiscal Resilience and Blue Growth development policy credit recognizes land–sea connectivity but lacks actionable strategies to integrate watershed management into marine conservation. Synergies between marine biodiversity conservation and other sector activities, particularly fisheries management, can be enhanced through the selective application of other effective area-based conservation measures, or sites outside protected areas that provide effective, long-term biodiversity conservation.10 But only the Fiji Tourism Development Program showed the potential of other effective area-based conservation measures to boost conservation efforts beyond designated protected areas through actors such as Indigenous communities, the private sector, and government agencies.

The marine portfolio shows inconsistencies in handling displacement and access restrictions, with some projects having clear safeguards and others having vague or no commitments. Twenty-seven projects use Resettlement Policy Frameworks and Process Frameworks to address displacement risks, ensuring community participation, alternative livelihoods, and compensation. Projects such as the Guinea-Bissau Biodiversity Conservation Project and the Caribbean Marine Biodiversity Program integrate displacement mitigation into conservation planning by using participatory frameworks and benefit-sharing mechanisms. Eight projects acknowledge displacement risks but rely on broad commitments, such as “ensuring alternative livelihoods,” without structured compensation plans or legal frameworks. Although these projects recognize the risks, they lack clear, actionable safeguards to prevent disproportionate impacts on communities. For example, the Unleashing the Blue Economy of the Caribbean project mentions displacement risks but does not outline concrete mitigation measures. Some projects also reference economic displacement risks, such as the Ocean Partnerships for Sustainable Fisheries and Biodiversity Conservation project, although it does not provide structured transition support for small-scale fishers affected by regulatory changes. Similarly, the Northern Mozambique Rural Resilience Project identifies risks but lacks a dedicated mitigation framework, instead relying on general economic resilience strategies that do not explicitly compensate affected groups. Twelve project documents make no mention of displacement measures.

Sustainable Financing

Sustainable financing for conservation activities is crucial for sustaining hard-won biodiversity gains. Most conserved areas suffer from financial challenges due to their public goods nature, resulting in habitat loss and diminished ecosystem services. Sustainable finance mechanisms, especially those that use adequate financial incentives or market-driven approaches to attract the private sector, help sustain biodiversity gains. Mechanisms that have proven effective in the World Bank’s portfolio for sustaining biodiversity protection include Payments for Ecosystem Services (PES),11 especially in IPLC areas; conservation or endowment funds; and—to a certain extent—ecotourism, which also provides job opportunities. The following analysis covers the 139 World Bank lending projects with conservation activities.

PES has shown good environmental and livelihood results, especially in community-held lands, but the World Bank’s support for PES has waned. PES is a market-based approach to conservation financing, initially championed by the World Bank, that is based on the principle that beneficiaries of ecosystem services (such as downstream users of clean water) should pay for them, while those who contribute to generating these services (upstream) should be compensated (Engel et al. 2008; Pagiola and Platais 2007; Wunder 2005, 2008). PES programs prioritizing IPLC territories have been particularly successful. Programs in Costa Rica, Ecuador, Guatemala, Mexico, and Peru have collectively supported Indigenous and tribal communities to preserve more than 4 million hectares of forest, representing 10 percent of these communities’ titled lands. Research shows that these programs have not negatively affected voluntary community initiatives to manage and conserve biodiversity sustainably. In Costa Rica and Mexico, these programs have enhanced the efforts of IPLC to manage their territories without compensation (FAO and FILAC 2021).12 The World Bank used PES to support conservation aims in 11 of the 139 projects identified. The 7 closed and validated projects—all rated moderately satisfactory or higher—supported PES in community landscapes and showed effective environmental and livelihood results. For example, PES contributed to a 20 percent reduction in deforestation in biodiversity corridors and excellent economic returns in Mexico, and it helped the Democratic Republic of Congo achieve an estimated 29.5 million tons of avoided carbon dioxide emissions—more than double the original target—by incentivizing agroforestry and land-use planning techniques.13 Yet despite these successes, the World Bank approved few projects with PES mechanisms in the second half of the evaluation period.

The use of conservation trust funds was infrequent but largely effective. Conservation trust funds were implemented in 15 conservation projects, 12 of which were in Latin America and the Caribbean. All but one of these funds were established before FY15. Ten of these funds have demonstrated strong results, achieving significant capitalizations, positive rates of return, and broad protected area coverage. Notably, the Amazon Region Protected Areas Project Transition Fund reached 173 percent of its target capitalization, providing sustainable financing through 2039. The Caribbean Biodiversity Fund attained a market value of $98 million, supporting more than 100 conservation projects in 12 Caribbean countries.

Ecotourism activities have been effective in achieving local economic benefits, but links to biodiversity protection have not been measured. When conducted responsibly, ecotourism provides local communities with incentives to protect forests, wildlife, and landscapes, thereby encouraging sustainable viewing and experiences instead of poaching or overharvesting, while also generating employment and distributive benefits. Thirty-two projects in the conservation portfolio included ecotourism activities. Of the 15 closed and validated projects, 87 percent were rated as moderately satisfactory or higher, and 12 demonstrated positive results in terms of infrastructure improvement, training, increased visitation, revenue, and benefits to local livelihoods. For instance, in Sri Lanka, 5,000 households experienced an increase in income through handicraft sales and guided tours. In Mozambique’s marine protected areas, 1,500 jobs were created, contributing to enhanced park management scores. Meanwhile, Tunisia integrated ecotourism activities into a broader tourism framework to promote tourism diversification, resulting in additional income for more than 12,000 households through tourism-related activities and a 30 percent increase in local employment within the project areas. However, no project has assessed the links between ecotourism and biodiversity (for example, avoided deforestation or habitat preservation).

Although traditional conservation finance tools are less common now, the World Bank has recently taken the lead in developing and showcasing specialized biodiversity-related financial instruments such as blue bonds and wildlife bonds. As demonstration projects, these instruments have been enabled through concessional finance, including the Global Environment Facility and PROGREEN, which has helped de-risk these pioneering efforts. As shown in Making Waves: World Bank Support for the Blue Economy, 2012–23 (World Bank 2024c), the World Bank helped launch the world’s first sovereign blue bond with the government of the Seychelles, designed to fund sustainable fisheries and the expansion of marine protected areas. Launched in 2018, the experience has helped raise global awareness about biodiversity finance and the potential of mobilizing private capital while also demonstrating the need to focus on lowering transaction costs, managing investor risk tolerance, achieving scale, and ensuring sustained ecological and socioeconomic benefits (March et al. 2024; World Bank 2024c). Since 2022, the World Bank has succeeded in developing the Rhino Bond in South Africa, which links investor returns to biodiversity outcomes—specifically, increases in black rhino populations—and initial monitoring has shown encouraging results, including population growth exceeding original targets (World Bank 2025e). Building on this approach, a similar outcome-based “Chimpanzee Bond” is currently being developed in Rwanda, intended to finance chimpanzee habitat preservation through performance-linked investor payments. Given their nascency, continued learning is essential to determine their replicability, scalability, and ultimate effectiveness in achieving biodiversity objectives.