Adeline Rochet is a programme manager for the Corporate Leaders Group Europe, a business coalition driving the transition to a sustainable, competitive, and resilient economy convened by the University of Cambridge Institute for Sustainability Leadership (CISL).

Europe’s economy depends on the natural world functioning as it should, but the effects of climate change risk undermining increasingly delicate ecosystems. Talks about the European Union’s next long-term budget miss this fact.

Climate-related losses in the EU have already reached €822 billion since 1980, with a quarter of that damage concentrated in just the past four years. Ecosystems are under increasing pressure: more than 80% of protected habitats are in poor condition, soils are degrading and water stress is rising across the continent.

The latest state of the climate report by the EU’s Earth monitoring service Copernicus confirms this worrying state of affairs: 95% of Europe experienced above-average temperatures in 2025.

Economic exposure to nature-related risk is also growing. Businesses, banks and insurers are beginning to reflect this in their risk assessments.

So, will the policymakers in charge of developing the European Union’s next big budget integrate this vision? We are in the midst of finding out.

Every seven years, the EU must negotiate a new budget that will help fund priorities over a seven-year-long period. The current one, which runs out next year, is worth more than a trillion euros.

Talks about the next multiannual financial framework (MFF) for 2028-2034 are now getting serious and the initial outline of this new budget shows it will focus on competitiveness, resilience and prosperity.

But, as the European Parliament adopted its negotiating position for the crunch budget talks and EU member states shape their approach ahead of a Council meeting on May 26, it is clear that the positioning of nature within this framework is strategically underestimated.

Why nature impacts economic growth 

Back in 2022, France’s nuclear power output was severely affected when heatwaves drove up the temperature of the rivers used to cool atomic reactors, impacting other European countries too. This was particularly poor timing given the energy price crisis triggered earlier that year by Russia’s illegal invasion of Ukraine.

Low river levels caused by drought have also heavily impacted economic activity and growth in countries like Germany, due to the negative effect on inland trade, while degraded fields in the Netherlands combined with heavy rainfall have ruined potato harvests.

These examples show that we cannot detach the health of the European economy from the good functioning of nature.

UN General Assembly backs “climate obligations” set by world’s top court

Nearly three-quarters of businesses in the eurozone rely directly on ecosystem services such as clean water, fertile soils and pollination. That dependency extends into the financial system, where around 75% of bank lending is exposed to companies dependent on these natural assets.

They entirely underpin supply chains and financial stability across the European economy. If load-bearing ecosystems collapse, businesses not only face disruption in their own operations, but they will also be exposed to failures from suppliers and customers.

This is not just a risk for individual companies, it is a threat for the whole system.

A budget that looks greener than it is

According to the latest proposals for the next MFF, a single 35% climate and environmental target will replace priorities that used to have distinct funding. As it stands, biodiversity has a 10% target, yet spending has struggled to reach even 8%, already showing how easily it is put to one side in practice.

In the new framework, biodiversity is absorbed into a broader category with no separate tracking or visibility. Dedicated instruments are folded into larger funding envelopes, and nature-based investments are placed in direct and distorted competition with industrial projects.

These are often faster to deploy and easier to measure, making them more attractive.

Headline figures reinforce some appearance of ambition, with €587–635 billion allocated to climate and environmental objectives. But since these are aggregated numbers, they do not show how much will reach ecosystem conservation or restoration.

Less visibility, weaker accountability

Biodiversity funding also remains structurally fragile, with around 80% concentrated in agriculture policy rather than supported by a diversified investment strategy.

This shift is structural: nature has been relegated from a defined priority to a mere discretionary allocation, and the governance model reinforces this dynamic.

Webinar: From Santa Marta to Bonn – where next for the fossil fuel transition?

Greater reliance on National and Regional Partnership Plans (NRPPs) moves decision-making into national spending choices, where fiscal and domestic political pressure will likely mean long-term ecosystem investments struggle to compete with short-term economic demands.

The current MFF paints a worrying picture of structural triple risk for nature: reduced visibility, increased competition for funding and weaker accountability.

Nature is critical infrastructure

It is a point worth reiterating: investment in nature offers clear economic returns. Healthy ecosystems drive resilience by reducing exposure to climate damage and supporting local economic activity.

Public finance plays a decisive role in enabling these investments at scale, making budget design a question of risk management and capital allocation.

Nature-based solutions already perform essential economic functions. They regulate water systems, restore carbon sinks, provide a buffer against extreme weather events and support agricultural productivity.

These are characteristics of infrastructure. Energy systems, transport networks and digital capacity are treated as strategic investments because they underpin competitiveness.

Natural systems play the exact same role, so why does the current budget plan not reflect this?

The next EU budget will shape investment for the decade ahead. Its structure will determine how risks are managed and where capital flows. Nature cannot be erased in favour of competing short-term priorities.

In the upcoming negotiations, European leaders still have the option to treat nature as a structural objective and a core asset, supporting Europe’s resilience and long-term competitiveness. But they must act now, before it’s too late.

The post Nature cannot be ignored by Europe’s next big budget appeared first on Climate Home News.

https://www.climatechangenews.com/2026/05/25/nature-cannot-be-ignored-by-europes-next-big-budget/

Across the state’s heartland, communities such as Indiantown are weighing proposals for hyperscale data centers. The massive facilities would reshape Florida’s rural lands.

By Amy Green

INDIANTOWN, Fla.—Carroll McAllister frets over the prospect of a hyperscale data center opening next to the grassy expanse where she grew up, in a shack her father built.

In Florida, an Agricultural Town in Need of an Economic Boost Eyes Hyperscale Data Centers

Anaerobic digester loans showed “significant delinquency rates,” the U.S. Department of Agriculture said, while environmental groups see the technology driving an expansion of large-scale animal farming operations.

By Steven Rodas, Lisa Sorg

The federal government’s pause on new loans for anaerobic digesters, the controversial method of converting animal manure from large-scale feeding operations into biogas, will now extend through the end of the year.

USDA Extends Pause on Loans for Controversial Digesters That Turn Manure Into Biogas