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A global consensus now recognises biodiversity as equal to climate change in its importance to sustainable development. While multilateral development banks (MDBs) have developed a strong emphasis on climate change, how do they approach biodiversity as a new priority? Current literature on MDBs' approach to climate change is prolific, but scholarship on biodiversity is scarce. Here, we compare MDBs' climate and biodiversity efforts in order to identify differences, analyze causes, and ultimately propose ways for MDBs to prioritise biodiversity. Methodologically, we analyze MDB documents in the form of policies, high‐level announcements, and strategies, in order to compare climate change and biodiversity across five aspects: Financing, policy, strategy, client requirements, and environmental reporting. Subsequently, we apply automated text analysis to examine mentions of climate change and biodiversity in annual reports. Focusing on the 10 largest MDBs, we find that across all five aspects, MDBs' prioritisation of biodiversity lags far behind that of climate change. From that, we recommend that biodiversity be prioritised by MDBs in three ways: By adopting an integrated strategic approach to environmental issues that goes beyond climate, by not only addressing biodiversity through safeguards but also through labeled projects, and by assigning targets as proportions of total financing. [ABSTRACT FROM AUTHOR]

Many financing decisions continue to exacerbate global biodiversity loss, despite a growing understanding of the economic and financial risks of biodiversity loss. Applying Coase's financial decision‐making theory based on cost, revenues, and risks, the article analyzes literature and current developments of biodiversity finance and green finance to evaluate why financial decision‐making is incentivized to ignore biodiversity risks and mostly fails to maximize biodiversity conservation or nature‐positive finance. Based on the identified gaps, the article develops four principles to integrate biodiversity into financial decision‐making: (1) regulation must set limits on nature's exploitation, as finance only values limited aspects of nature as "bankable," while the destruction of other parts are without negative or positive value to the investor; (2) biodiversity‐related financial risk evaluation needs focus on local risks due to the local nature of biodiversity impacts and dependencies (in comparison, e.g., to climate finance's global risks); (3) scale biodiversity finance utilizing its secondary benefits, particularly in conjunction with climate finance; (4) biodiversity finance development needs to be co‐led and championed by financial decision‐makers. This article contributes to the emerging literature on biodiversity finance and green finance for sustainable development with implications for policy makers and standard setters. [ABSTRACT FROM AUTHOR]