Hans von Sonntag | 03.03. 2025
Brussels. Photo Hans von Sonntag
Europe stands at a crossroads. Over the past decade, the political landscape has shifted from relative stability to a more volatile state. At the same time, the global order is being redrawn, with imperial ambitions attempting to carve the world into spheres of influence. In response, Europe adjusts its foreign policies, prompting radical budget shifts and prioritising security over sustainability.
As a result, military spending is surging, putting pressure on the continent’s finance agenda, including green finance. The European Commission’s recent push to boost defence funding—including proposals to exempt military budgets from fiscal constraints— raises questions about the future of public funding for climate and conservation initiatives.
The EU’s rollback of sustainability reporting rules has added further uncertainty for investors. Conservation NGOs in Europe, long dependent on public funding, are largely unprepared for these changes.
Economic Outlook and Budget Priorities
Despite these shifts, the economic backdrop isn’t as dire as some fear. The European Central Bank (ECB) forecasts GDP growth of slightly above 1% in 2025, with a modest uptick in subsequent years and a projected inflation reduction to 2.1%. Luis de Guindos, Vice-President of the ECB, said on 15 January 2025: “The labour market remains resilient, with employment growing in the third quarter of 2024, again by more than expected.”
At the same time, European nations are dramatically increasing their defence budgets. Poland plans to allocate 4.7% of its GDP to defence in 2025, a response to the perceived Russian threat. Estonia and Latvia, which share borders with Russia, have pledged 5.0% of their GDP to defence, citing their vulnerability to potential aggression. Recognising the shifting geopolitical landscape, Germany plans a new €200 billion special defence fund, adding to its 2022 €100 billion special military budget.
Despite the surge in military spending, the EU remains committed to its environmental initiatives. The 2025 EU budget still includes research, health, education, and climate action provisions. The European Commission has also proposed a €100 billion Clean Industrial Deal to support domestic green manufacturing and lower energy costs. However, these commitments remain vulnerable to geopolitical realities, with the potential for funding reallocation if the security situation further deteriorates.
The Role of ESG and Private Green Investments
Private green finance has evolved significantly over the past decade. In contrast to a stagnating U.S. market, ESG investments continue to grow in Europe. However, recent regulatory changes, including the European Commission’s proposal to ease corporate sustainability reporting, have created uncertainty. The so-called “Simplification Omnibus” seeks to reduce reporting burdens by 25%, potentially saving European businesses €40 billion. While this move aims to improve global competitiveness, critics argue it risks undermining corporate accountability and investor confidence in ESG commitments.
Given the rising defence spending and the need to maintain green commitments, bolstering the income side is essential. This could involve strengthening private-sector participation in green finance, expanding public-private partnerships, and utilising innovative financial tools such as green bonds. A diversified funding approach will ensure that sustainability efforts remain robust despite shifting fiscal priorities.
Conservation NGOs: Unprepared for the New Landscape
To remain relevant, European conservation NGOs must rethink their approach. Historically, many have relied on EU-backed programs such as the LIFE Fund and Horizon Europe. However, these funding streams may shrink or become increasingly competitive with shifting fiscal priorities. Additionally, evolving regulatory requirements demand greater administrative capacity, diverting resources from on-the-ground conservation work. Though less restrictive, private funding requires different engagement strategies that many NGOs have yet to master.
Compounding these financial challenges is a changing political climate. Right-wing nationalist movements in several EU member states have framed environmental policies as economically burdensome and restrictive. This makes securing long-term conservation commitments more difficult, as political support fluctuates based on short-term economic and security concerns, even though nature provides substantially more economic benefits than costs.
To navigate this new reality, conservation NGOs must diversify their funding sources and reduce dependency on public subsidies. One approach is to build stronger partnerships with private companies seeking to enhance their ESG credentials through biodiversity investments. Corporate-backed rewilding projects, nature-based carbon inset initiatives, and land stewardship agreements could provide new revenue streams. Additionally, leveraging green finance instruments such as green bonds and impact investing could ensure more stable, long-term funding while aligning with EU sustainability objectives.
Beyond financial strategy, conservation NGOs must position themselves as key players in the growing regenerative economy. Advocacy for conservation-friendly agriculture, sustainable forestry, and ecosystem restoration as viable economic sectors could open new funding opportunities. However, this shift requires a philosophical change for many conservationists accustomed to classic preservation approaches, which have historically focused on setting aside land for non-economic use.
A Necessary Shift in Strategy and Storytelling
Collaboration will be key beyond funding. Conservation NGOs must strengthen alliances across industries, research institutions, and local communities to increase their influence and resource-sharing potential. This will require a significant shift in storytelling, from traditional environmental narratives to arguments that align conservation with economic and security interests.
Digitalisation also offers opportunities to amplify impact. Technology-driven citizen science initiatives and AI-assisted biodiversity monitoring could provide cost-effective ways to scale conservation efforts while demonstrating tangible results to funders and policymakers.
If Europe’s conservation sector wants to withstand the coming financial and political headwinds, it must embrace agility, innovation, and a diversified funding model. Waiting for governments to prioritise conservation again may take longer than the planet can afford.