Earth observation can help unlock nature finance – but only with the right data
New research from the European Space Agency-funded LEON project shows that Earth observation could become foundational infrastructure for nature finance – enabling the integration of nature-related risks into financial decision-making and unlocking investment at scale. LEON reveals a critical gap but also a clear pathway forward: with the right data systems, nature risks can be measured, managed and priced, as LEON’s co-Directors Nicola Ranger, Joseph Bull and Andy Shaw explain.
Nature is rapidly emerging as a material financial risk – and opportunity – for economies and financial systems. Yet while policy ambition is accelerating, the ability of financial institutions, companies and regulators to act remains constrained by the absence of reliable, decision-ready, spatially-explicit environmental data and analyses linking ecosystems to economic activity.
A major new international initiative is underway to bridge this gap, the Leveraging Earth Observation for Nature Finance (LEON) project. LEON’s early research shows that Earth observation (EO) technologies are now sufficiently advanced to fill the data deficit if they can be translated into tools and datasets that meet financial decision-making needs.
What is needed and why?
Nature finance is often framed narrowly as mobilising capital into conservation or restoration. But in practice, it requires a broader transformation: both financing nature and embedding nature-related risks and dependencies into mainstream financial decision-making. Today, this transition is still in its early stages. Globally, more than US$7 trillion of annual financial flows continue to support activities that degrade ecosystems, while investment in nature-positive activities remains a fraction of what is required.
The lack of tools for financial institutions to assess and price nature-related risks consistently is one reason for this imbalance. Unlike climate change, where greenhouse gas emissions provide a relatively standardised metric, nature is inherently spatial, complex and multi-dimensional. Risks – and opportunities – depend on where assets are located, how ecosystems are changing, and how these changes propagate through supply chains and economies. New types of products and markets require granular data to design and track impact. As a result, portfolios cannot yet be robustly stress-tested for nature-related shocks nor opportunities fully captured.
Satellite data can provide globally consistent, spatially explicit and increasingly frequent insights on land use, water systems and ecosystem condition. LEON is already demonstrating how EO can support core financial functions: identifying risks in supply chains, monitoring land-use change and ecosystem condition, verifying corporate disclosures, tracking the environmental performance of investments and sovereign instruments, and providing early detection of non-compliance in markets. But financial institutions do not need raw satellite imagery: they require processed, standardised and decision-ready indicators that can be integrated into financial models, products, compliance, disclosures and risk systems.
This is where Earth observation offers a step change – and LEON, launched in 2025, responds to this challenge.
LEON’s new assessments show a strong appetite for EO data but challenges in availability and application
The LEON project is structured around six pilot applications – spanning mining and agrifood supply chains, nature-related financial risk, biodiversity credit markets, natural capital accounting and sovereign finance instruments – providing a practical testbed to demonstrate how environmental intelligence can be embedded into financial systems at scale.
The project’s first two major outputs, published today, together provide one of the most comprehensive assessments to date of how Earth observation can support nature finance. The first report maps the opportunities, enablers and requirements for embedding EO data into financial decision-making. It finds that demand for nature-related information is growing rapidly, driven by regulation, investor pressure and emerging financial instruments – but that markets remain constrained by structural data gaps, including the absence of standardised metrics, asset-level geolocation and interoperable data systems.
The second report, based on a global survey of financial institutions, provides insight into how these challenges are experienced in practice. It shows that most of the institutions surveyed are already beginning to assess nature-related risks, dependencies and impacts, and that regulatory frameworks and financial innovation are acting as key catalysts.
Across the project’s pilots, EO is already being applied to real-world use cases – from monitoring mining impacts on water systems to assessing deforestation risks in agricultural supply chains, assessing additionality of projects and supporting nature-related financial risk analytics. However, integration into core financial decision-making remains limited, highlighting a critical gap between technological capability and real-world use. Respondents consistently identified four critical barriers: lack of granular environmental data, absence of standardised metrics, missing asset-level geolocation, and fragmented data platforms.
At the same time, the findings are strongly forward-looking. There is clear and growing demand for EO-enabled solutions: nine-tenths of respondents expressed interest in using EO data, with many willing to pay for decision-ready products. Financial institutions highlighted priority use cases including supply-chain risk analysis, asset-level environmental risk assessment, and verification of environmental performance. Medium-resolution datasets (10–30 metres) with monthly or annual updates were identified as sufficient for many applications, while nearly 80% of respondents emphasised the importance of ‘ground-truth’ validation – through direct observation and measurement – to build trust in the data.
While significant, the challenges are also increasingly tractable – and the policy and regulatory environment is creating strong incentives to address them. In Europe, frameworks such as the Corporate Sustainability Reporting Directive, Sustainable Finance Disclosure Regulation and the Taskforce on Nature-related Financial Disclosures are encouraging firms and investors to assess and disclose nature-related risks and impacts. Advances in EO, data science and digital infrastructure also mean that many of the technical building blocks are now in place.
Securing EO as foundational infrastructure for nature finance
The direction of travel is clear. There is an urgent need to develop standardised, EO-derived environmental indicators aligned with financial disclosure frameworks; to link financial datasets to ecosystems through improved asset-level geolocation; and to embed environmental intelligence into financial analytics platforms. Capacity-building across financial institutions, regulators and data providers will also be essential.
If these steps are taken, EO could become foundational, enabling transparency, accountability and scalability across financial systems. The opportunity is not only to better manage risks, but to unlock new forms of investment in nature-positive activities. LEON shows that this transition is already underway – and that with the right data and tools, financial systems can begin to reflect the true value of nature.
Earth Cap’s Executive Director, Nicola Ranger, is lead author on both the LEON reports published today and co-Director of LEON. Joseph Bull, Associate Professor in Climate Change Biology at the University of Oxford, and Andy Shaw, Director of Assimila, are LEON co-Directors and co-authorsof the report alongside wider members of the LEON consortium.
LEON is funded by the European Space Agency and brings together a multinational consortium of researchers, financial institutions and data providers to connect cutting-edge EO with financial decision-making. Its aim is to help increase investment in nature while embedding nature-related risks into markets. Read more about LEON here.
