The 2021 Kunming Declaration led fund managers to reallocate portfolios away from countries where the risk to biodiversity is high, with biodiversity emerging as a downside risk factor. Associated cross-border capital flows benefit countries in the same geographic region, but outside of a fund’s established portfolio. Using a novel measure of legal action to protect nature, this paper demonstrates that countries adopting more legal acts are partially shielded from funds reducing their exposure to countries where biodiversity is at high risk.