Financing nature:a transformative
action agenda
A discussion paper
December 2023

1

Foreword

Naoko
Ishii

Razan
Al-Mubarak

Frannie
Léautier

Vera
SongweIzabella
Teixeira

Mari
Pangestu

Nature is vital to the health of our communities and the wealth of our economies. There is no life on earth without
nature, and no functioning economy without it either.
A resilient, thriving natural world is also our best chance of meeting climate and sustainable development goals.
Peatlands, wetlands, soils, forests and oceans absorb half of the world’s emissions. A productive and inclusive foodsystem strengthens food security and enhances livelihoods. Protecting nature and supporting equitable access to,and use of, our natural capital is an essential tool for peacebuilding.
Yet our current economic system fails to account for and properly value nature with catastrophic effect. Almost three
years after its publication, we have not heeded the dire warnings of the Dasgupta Review – which called for a radical
change in how we think, act and measure economic success to protect and enhance our prosperity and the natural
world. Humanity has crossed six of nine ‘safe and just’ Earth System Boundaries, and wildlife populations are declining
faster than any time in human history.
It does not have to be this way. The agreement of the Global Biodiversity Framework, alongside the Paris Agreement,
has catalysed significant public and private sector attention on nature. Around the world, we also see examples of
locally-driven, bankable solutions. From regenerative cocoa production in west Africa to forest restoration in the
Amazon and wildlife tourism that conserves and protects endangered species in Botswana, nature-positive models
that deliver for people, planet and prosperity are flourishing.
The question in front of us now is “why do these nature-based solutions remain fragmented pilots?’’. The simple answer isthat nature is not only undervalued, but it is largely seen as “uninvestable”. Nature is location-specific, meaning the metrics
of financing nature-based solutions are inherently more complex. A common approach for measuring and valuing nature
has yet to be mainstreamed, leading to both systemic underinvestment and misdirected investments in nature. Naturebased solutions attract only 15% of the money which goes to traditional climate solutions like clean energy and low carbon
transport. Harmful subsidies receive three to four times more financing than nature-positive investments.
Making nature-based solutions become mainstream investable opportunities requires a radically different approach.
We call on leaders to support an ambitious action-agenda to: (1) Set science-based targets and account for nature to
fully embed nature into economic decision making; (2) Strengthen domestic and global policy processes for naturefinance; (3) Ensure investments and policies are just, inclusive, and accountable; (4) Scale up project finance fornature (eg. through creating regenerative value chains); and (5) Deepen capital markets, mobilize private capital anduse public finance catalytically.
At COP27, the Independent High Level Expert Group on Climate Finance laid out a transformative agenda to unlock
investment for climate action in emerging markets and developing economies. This paper aims to deepen the action
agenda for nature finance, to inspire collective action across public, private and philanthropic finance in how nature isfinanced globally. We hope that COP28 is a watershed moment, where nature becomes firmly embedded in economic
decision making.

2

Contents
Foreword

2

Acknowledgements

4

Key Messages

6

Executive Summary

7

1.

The case for nature – delivering for people and planet

21

1.1

The current economic system finances nature loss and ignore nature’s value

21

1.2

Yet nature is the foundation of the economy and of life on Earth

24

1.3

Momentum to address nature loss is building across policy, business and finance26

2.

Systemic transformation agenda for nature finance

30

2.1

Set targets and account for nature

31

2.1.1

Science-based targets and disclosure frameworks

31

2.1.2

Natural capital accounting

33

2.1.3

Data generation and management36

2.2 Harmonize policies for effective nature financing
2.2.1

Integrated strategies and spatial planning38
38

2.2.2 Trade, tax and subsidy reform

40

2.2.3 Country platforms, implementation vehicles, and enforcement42

2.3 Ensure investments and policies are just, inclusive and accountable
2.3.1

43

Multistakeholder decision-making and design43

2.3.2 Community-led approaches to engagement with IPLCs

43

2.4 Expand project finance for nature
2.4.1

46

Regenerative value chains47

2.4.2 Carbon and biodiversity markets

47

2.5 Deepen capital markets, mobilize private capital and use public finance catalytically 50
2.5.1

3.

Unlock domestic capital markets

50

2.5.2 Ramp up development finance53

2.5.3 Build a comprehensive sovereign debt approach to nature

58

Four investment priorities to value intact nature, restore degraded nature

63

and address the drivers of nature loss
4.

Call to action

Annex – investment solutions, state of nature finance, investment needs

77
80

3

AcknowledgementsCore supporting team:

Barnabé Colin, Naseer Chia, Moritz deChaisemartin, Guido Schmidt-Traub,
Katherine Stodulka

With special thanks
for their expert input:

Jeroen Huisman, Julia Turner, Johanna
Schlueter, Federico Apéstegui Guardia;
Puninda Thind, Roopal Kanabar (Climate
Champions); Camille Maclet (CBD); Rodrigo
Quintana (TNC); Mark Gough (Capitals
Coalition); Simon Zadek (NatureFinance);
Rodrigo Quintana (TNC); Guillaume
Lafortune (SDSN); Nathalie Olsen, Aurelia
Blin (UNEP).

This action agenda has been commissioned by the Center for Global Commons at the Universityof Tokyo, led by a group of expert practitioners and developed in partnership with Systemiq. It
serves as a companion to the Report of the Independent High-Level Expert Group on Climate
Finance (IHLEG) and its follow-up, to be launched at COP28, and a follow-up to the UN High-Level
Climate Champions report “Mobilizing private capital for nature”.
The authors welcome feedback and engagement on this paper and your collaboration toaccelerate this critical agenda.

45

Key Messages
Nature is vital for protecting the health of our communities and the wealth of our economies.
Yet the current economic system continues to incentivize destructive activities, leading tonature breakdown. When nature fails, it disproportionately harms Emerging Markets andDeveloping Economies (EMDEs)

US$140tr

US$530bn

47%

the value of ecosystemservices from nature, 1.5 times
global GDP

paid in subsidies harmful tonature annually – 3.3x the total
amount of nature financeof wealth creation in
low-income countries
depends on nature

Conserving, restoring, and sustainably using nature is critical to achieving
climate and sustainable development targets
AroundAroundClose toAroundOver

11.3 GtCo2e

50%

80%

US$10tr980

nature’s carbon
mitigation potential– equivalent to
stopping burning oil
globally

climate-resilience
infrastructure needs
by 2050 could be met
with nature-based
infrastructureof humanity relies
on nature for
medicine andtreatment

economicopportunities in anature-positive
economymillion people are
employed by nature(farming, fishing), or
27% of the global
workforceYet nature is chronically underfunded. Climate finance is insufficient, inefficient, and unfair –nature finance is worse. We urgently need to scale investment in nature-positive solutions
Only

1/6

18%

nature receives theequivalent of one sixthof flows going to better
energy systemsof total nature financecomes from private
capital70%

2%of finance targets
conservation andrestoration – more is needed
for sustainable agricultureof finance goes to
Indigenous peoples and local
communities – the guardiansof 80% of intact natureUrgent, systemic action is needed to mobilize capital for nature by transforming theenabling policy environment, proving business models, and harnessing financial innovation

1

2

3

Set targets andaccount for nature

Harmonize policies for
effective nature financing

Ensure investments are just,accountable, and inclusive

Science-based targets, disclosure
frameworks

Integrated strategies and spatialplanning

Multistakeholder decision making
and design

Natural capital accounting

Country platforms, implementation
vehicles, enforcement

Community-led approaches toengaging IPLCs

Data generation and management

Trade, tax and subsidy reform

4

5

Scale up project
finance for nature

Deepen capital markets,mobilise private capital, use
public finance catalytically

Regenerative value chains

Unlock domestic capital markets

Carbon and biodiversity markets

Ramp up development financeComprehensive sovereign debt
approach to nature

6

Executive Summary1

The case for nature –delivering for people and planet
Naturei is the foundation of the global economy. It is critical to the health of ourcommunities, the wealth of our economies, and delivery of the Paris Agreement andSustainable Development Goals. Yet our economic systems fail to adequately value
nature. The impacts are stark – we are experiencing nature breakdown, the impacts ofwhich are most acutely felt by rural populations in developing economies.
We lack a harmonized approach to dealing with the complexities of measuring andaccounting for nature, leading to systemic underinvestment in nature-positiveii
solutions and misdirection of existing investments towards harmful activities.
Nature financeiii receives just one-sixth of the capital invested in low-carbon energy.
An approach that systematically embeds nature in decision-making is needed.
Growing political momentum, financial and business model innovation, andcommunity and country leadership create an unprecendented opportunity to ramp
up ambition and action.
i
ii
iii

Nature: the natural world, with emphasis on the diversity of living organisms and interactions among themselves andwith their natural environment. This includes categories such as biodiversity, ecosystems, ecosystem functioning, thebiosphere, humankind’s shared evolutionary heritage, and biocultural diversity (adapted from Diaz, S. et al. [2015])
Nature-positive: a high-level goal and concept describing a future state of nature (e.g., biodiversity, nature’s contributions to people) that is greater than the current state. (SBTN 2020, Abridged Glossary for Initial Guidance)
Nature finance: finance that contributes to activities that conserve, restore or sustainably use nature, and that aligns
financial flows with the goals of the Global Biodiversity Framework and Paris Agreement (adapted from OECD andConvention on Biological Diversity)

7

The current economic system fails to adequately account for and value nature’s
contribution. It incentivizes harmful activities that disproportionately affect the mostvulnerable countries and communities. Our failure to adequately account for nature has led
to nature breakdown – humanity has crossed six of nine Earth system boundaries, and wildlife
populations have declined by 69% on average. Impacts are most severe in emerging markets
and developing economies (EMDEs), whose rural populations rely heavily on nature for theireconomic well-being and are most vulnerable to its depletion.
The financial system is inefficient, insufficient and unfair1 – it creates disincentives todeploy capital in EMDEs and creates barriers to investing in climate action. These barriers
are even higher when investing in nature:•

The metrics of financing nature are inherently complex. Compared to climate (where
reducing greenhouse gas emissions is typically the sole indicator of progress), tracking
nature impact requires location-specific data across multiple variables, such as freshwater
availability, soil health and biodiversity intactness. Defining and monitoring locationspecific metrics and solutions is essential to global, regional and local action on nature,alongside ensuring this data can be integrated into financial and policy decision-making inan efficient and actionable way.

•

Harmonized approaches for measuring and valuing nature have yet to bemainstreamed. Shifting towards nature-positive activities at scale requires a harmonizedapproach in the way we understand, measure and account for our relationship with nature.
Without this, it is more difficult to integrate nature in decision-making processes (e.g.,
investment, tariff regimes, government accounts, insurance policies, risk management).

•

Nature-positive project financing faces added challenges compared to investments
in energy, mobility or industry. Investors perceive high risks to investing in nature, due toupfront costs, long payback periods, lack of training for farmers, fishers and loggers, and theoften small or disaggregated nature of projects. Moreover, some of the priority solutions innature do not have underlying business models, whereas in the rest of the climate financeagenda, the majority does.

•

Environmental crime, such as logging, illegal mining and the trade and trafficking of
wildlife threatens the survival of biodiversityiv. It exacerbates climate change, damages
ecosystemsv, and harms Indigenous Peoples and Local Communities (IPLCs)vi.

iv
v

vi

8

Biodiversity: the variability among living organisms from all sources including, inter alia, terrestrial, marine, and otheraquatic ecosystems and the ecological complexes of which they are part; this includes diversity within species,
between species, and of ecosystems. (Convention on Biological Diversity)
Ecosystem: “all the living things in an area and the way they affect each other and the environment” (Cambridge
Dictionary). Ecosystem functions are “the physical, biogeochemical, and ecological components, processes, andoutputs of ecosystems that are driven by multiple controls, such as abiotic and climatic factors, ecosystem structure,
biodiversity, human disturbance, and land management” (Duncan et al., 2015). These functions largely depend on
ecosystem condition and quality (adapted from NGFS)
IPLCs: typically, ethnic groups who are descended from and identify with the original inhabitants of a given region, in
contrast to groups that have settled, occupied or colonized the area more recently (IPBES)As a result, the conservation, restoration, and sustainable use of nature is chronicallyunderfunded, resulting in a significant need for additional investment. Finance for nature
is skewed towards conservation, although production systems – such as agriculture – drive
the majority of nature loss. Private finance is insufficiently mobilized, and not enough public andprivate finance goes to EMDEs, where it is most urgently needed.
•

Nature finance is skewed to support conservation and restoration activities, which
receive 70% of current financing. Supporting these activities is critical and they remain
deeply under-funded. Scaling nature finance overall should combine conservation andrestoration with investment in a systematic transformation of commodity production andinfrastructure development.

•

Only 18% of nature finance is private capital. International commitments such as the
Global Biodiversity Framework emphasize that we cannot achieve goals without mobilizing
financial resources from all sources, public and private, and scaling the use of more effective
blended and innovative finance solutions. In 2022 alone, at least US$5 trillion of private
capital was deployed on activities with direct negative impacts on nature, across sectors.2•

Most nature finance comes from, and stays in, advanced economies. Close to 80% of
global nature finance flows originate from and are directed to advanced economies. Yet 60%
of EMDEs are in debt distress, which restricts the ability of sovereigns to invest in nature.

•

Harmful subsidies receive three to four times more (US$530 billion) financing thannature-positive public investments in agriculture, fisheries and forestry3, driving 14% of
global deforestation and dwindling fish stocks.4•

A lack of integrated regulation and enforcement of environmental crime costs theglobal economy almost $300 billion a year. This is punishing people living in poverty,
70% of whom depend on wild species for food and income.

Yet nature is the foundation of our economies and our wellbeing. Humanity relies on a stable
and resilient Earth system: our air, food and the water we drink ultimately depend on the stableprovision of nature’s services. Put simply, without nature life ceases to exist.
Nature also fosters human health and wealth beyond economic value. IPLCs have built
varied ways of understanding and relating to nature. Incorporating these diverse values, views,
and solutions into decision-making not only embraces critical principles of justice and inclusion,
but also ensures that the global community benefits from knowledge, traditions, and innovations
that have historically delivered a safe and just approach to sustainable development.

9Nature is critical for delivering on the Paris Agreement and the UN Sustainable
Development Goals (SDGs):•

Safeguarding nature is essential to mitigating climate change. Peatlands, wetlands,
soils, forests and oceans absorb half of total anthropogenic emissions and store twice asmuch carbon as the atmosphere. Nature’s mitigation potential of 11.3 gigatonnes CO2e by
2030 is the equivalent of stopping burning oil globally.

•

Safeguarding nature is the most cost-efficient way of adapting to climate change.
Replacing or complementing built infrastructure with plants, trees or other alternatives
could provide 50% of climate-resilient infrastructure needs by 2050 and save EMDEs atleast US$100 billion in costs of climate change annually.

•

Safeguarding nature guarantees millions of jobs. An estimated 980 million jobs infarming, fisheries, forestry and tourism – one-quarter of the global workforce – dependon the effective management and sustainability of healthy ecosystems. Meanwhile, anestimated 400 million additional jobs could be unlocked in sustainable agriculture and newmarkets for conservation and restoration.

•

Safeguarding nature means fighting poverty, enhancing food security, and peacebuilding. Nature loss enhances inequalities between and within countries; the world’s
poorest lose access to their means of subsistence and countries become trapped inpoverty. Unsustainable land and sea use makes it harder to feed a growing population.
Nature loss amplifies threats leading to social destabilisation and violence. Four main
factors of insecurity – access to water, food, natural disasters, and migration – can beaddressed by transformative action on nature.

•

Safeguarding nature guarantees human health. Ecosystem services purify water,
regulate air quality, and enable soil formation. The entire population relies on biodiversity
either for traditional medicines or for pharmaceutical discoveries. 200 health journals havecalled on the United Nations to treat the environmental crisis as a global health emergency.

The good news is that political momentum, financial innovation, and technologicalsolutions are converging to turn the tide on nature loss. We must seize this momentum tobuild a systemic transformation agenda for nature.
•

Targets and policy objectives: As the Paris Agreement did for climate, the Global
Biodiversity Framework has focused attention on nature. Nature was central to the G7Communique for Action, the recent G20 New Delhi Leaders’ Declaration called for bettermeasurement of nature data, and it is prominent in the COP28 agenda.

•

Financing innovation: increasing recognition of the risks from nature loss has led tothe development and implementation of innovative financial instruments, such as debt

10

conversions for nature (e.g., Belize, Ecuador, Gabon), blended finance vehicles (e.g.,
Vumbuzi Impact Multiplier, Global Fund for Coral Reefs, IDH Farmfit), and innovative tax
schemes (e.g., Limpopo Biodiversity Management Agreements).
•

Voluntary initiatives and corporate commitments: the Science-based Targets for
Nature and the Taskforce on Nature-related Financial Disclosures are building bridges
between nature, business and finance, accelerated by a recognition of the approximately
US$10 trillion in business opportunities across nature.

•

Technological breakthroughs: a revolution in nature data – enabled by remote sensing,
sensors, artificial intelligence, environmental DNA, and drones – is expanding ourunderstanding of nature and our ability to measure, track and account for nature.

2

A systemic transformation agenda for nature
Rebuilding our economy’s relationship with nature will require coordinatedpublic and private sector action across five interventions: 1) Setting targets andaccounting for nature; 2) Harmonizing policies for effective nature financing; 3)
Ensuring investments and policies are just, inclusive and equitable, 4) Expanding
project finance for nature; and 5) Deepening capital markets, mobilizing private
capital and using public finance catalytically. Through these actions in tandem, we
can firmly embed nature in decision-making and support the acceleration and scaleof nature-positive action to deliver on the Global Biodiversity Framework, Paris
Agreement, and Sustainable Development Goals.

1.

Set targets and account for nature

Building a sustainable economic system requires adopting harmonised frameworksof measuring and valuing different types of capital (eg. economic, natural, social). The
mainstreaming of a natural capitalvii accounting framework, supported by science-basedtargets and high-quality nature data to accurately measure and value nature outcomes canensure that nature is fully embedded in decision-making processes. This should be applied
to policymaking, business strategies, investment decisions and procurement standards.
•

Science-based target setting: The releases of the Science Based Targets for Nature(SBTN) and Taskforce on Nature-Related Financial Disclosures (TNFD) framework areoperationalizing nature-related targets, disclosure and investor engagement. Theseframeworks have catalysed action among corporates and financial institutions, withseveral organizations now piloting interim SBTN and TNFD guidance. Such initiatives are
increasingly supported by regulation: Article 29 of the French law on Energy and Climate
requires financial institutions to disclose information about portfolio impacts on biodiversity.
These initiatives should be widely adopted and mainstreamed.

vii

Natural capital: the stock of renewable and non-renewable natural resources (e.g. plants, animals, air, water, soils,
minerals) that combine to yield a flow of benefits to people. (Capitals Coalition [2016], Natural Capital Protocol)

11•

Natural capital accounting: Shifting towards nature-positive activities at scale requires
a transformation in the way we understand, measure, and account for our relationshipwith nature. The lack of a harmonized approach to accounting for nature has hampered
the mainstreaming of nature-positive practices but frameworks like the United Nations
System of Environmental-Economic Accounting (UN SEEA) and the Capitals Coalition’s
Transparent Methodology now make it easier to factor nature into decisions.

•

Data access and management standards: 70% of investors believe a lack of data is a key
barrier to investments that support nature and biodiversity. Whilst the quality of nature data
is improving, and enough to drive initial action, current stocks of publicly available data is notcomprehensive, updated or accurate enough to baseline the ‘state of nature’ and thus totrack changes to natural capital over time. This prevents financial institutions from developing
nature-positive products. More collection and disclosure of data can accelerate the use ofdecision-quality data for nature and support the direction of capital towards nature.

2.

Harmonize policies for effective nature financing

Political momentum is growing, globally, and regionally. Aligned policy processes – oftendelivered at national level through international platforms – can improve planning, incentives,
monitoring, governance, and implementation for climate, nature and development.
•

Better planning (e.g. through spatial planning processes): Governments need to
manage trade-offs between optimizing for different climate, nature and development
outcomes, for example when deciding where to award concessions for industry against
designating Protected Areas. National spatial planning processes - such as thosepioneered by Costa Rica, Paraguay, South Africa and others - could identify high-riskareas off-limits to development, seek out opportunities for nature-based solutions within
production systems, support rigorous management of development impacts, guide therestoration of degraded areas, and codify these priorities in national maps of land use.

•

Better incentives (e.g. through nature-positive subsidies): Governments shouldincorporate nature-related risk management into fiscal recovery packages and budgetaryplanning, revise tariff and subsidy regimes – including the progressive repurposing of$530billion in annual harmful subsidies5 – to support sustainable agriculture and fisherymodels, and align their own procurement with nature-positive outcomes.

•

Better governance and implementation (e.g. through country platforms): Politicalagreements are needed to support transformative change for specific long-term objectives.
Country platforms – such as those Brazil’s Ecological Transformation Plan, and Country
Packages under the Forest and Climate Leaders’ Partnership - can provide a country-led
institutional co-ordination mechanism to identify climate, nature and development priorities,
structure financing instruments to deliver them, build an enabling policy environment, andmobilize bilateral, multilateral and philanthropic donors, as well as private sector actors.

12•

Better monitoring (e.g. through better monitoring, reporting and verification
systems): ensure that commitments are being enforced (e.g. protected areas, prevention ofenvironmental crime) and that action for nature is accurately tracked (e.g. to enable payment
for ecosystem services) through robust MRV systems and enforcement mechanisms.

3.

Ensure investments are just, accountable, and inclusive

Including women, marginalized communities and IPLCs in the design of a nature-positive
economy is essential because they are crucial managers of landscapes and seascapes.
Ensuring the inclusion of these communities in the design, governance and implementation ofpolicies and investments, and the codification and respect of their land rights, is not only a justimperative but a key enabler of nature’s survival.
•

Secure IPLC rights over assets and enhance their resource management: ensuringcommunities conserve or reclaim land tenure rights should be the foundation of any
approach engaging IPLCs.

•

Ensure IPLC inclusion in the creation and governance of PAs and MPAs: for example,
in September 2023, at the UN General Assembly, Maori leaders called on the world
to confer legal personhood to the whale and pledged to work together to implement
Indigenous customary protections across whale migration routes between critical feeding
and breeding grounds. This has created the world’s largest indigenous MPA network, ofover a 2,200,000km2 area.

•

Design place-based financing mechanism with, and for, IPLCs and smallholder
communities: encouraging the creation, strengthening and broadening of financing
tools led by or designed for IPLCs and rural or marginalized communities, with a focus on
reliability of access to long-term funding.

4.

Expand project finance for nature

One of the biggest challenges to mobilizing private sector investment is identifying astrong pipeline of bankable projects. Despite pledges seeking investments with measurable
environmental benefits and financial returns, the perceived lack of clearly investible projects still
limits capital flows. This is because the scale-up of nature-positive pipeline – at the supply level– faces constraints related to the structure of projects and value chains, and the need for project
preparation and technical assistance throughout.
•Scaling regenerative value chains for soft commodity production and ecosystem
restoration requires pairing financial support with technical assistance and highintegrity value chain standards. This can help draw in necessary commercial supply
chain finance, carbon finance, and other market-based solutions.

13

Transparent reporting standards for insetting can help push incumbents such as
massive international traders towards regenerative value chains. Pipeline accelerationand value chain incubation, as demonstrated by Regeneration, can benefit from publicprivate collaboration and engagement at country or landscape level. Incubators need
the involvement of: corporates (as product off-takers), governments (through theirpolicies), financial institutions and technical assistance providers, including the support
philanthropic funding and impact investing.
•

Carbon and biodiversity markets will be critical to value nature and fix market failures.
An increasing range of private-sector business models are rewarding nature protection.
As biodiversity markets grow alongside carbon markets, ensuring the integrity of design,
governance and implementation will be critical. Interest is growing in creating connected
or fully integrated global carbon and nature markets, including through supervised carbon
stock exchanges, jurisdictional credit markets and national credit frameworks.

5.

Deepen capital markets, mobilize private capital and use publicfinance catalyticallyAt the demand level, neither domestic nor international capital is moving fast enoughor at the scale required. Capital markets have traditionally viewed the risk-reward ratio
of investing “into” (e.g., conservation) and “for” nature (e.g., sustainable agriculture) as
prohibitive. An end-to-end de-risking infrastructure and strategic use of concessional
capital to de-risk private investment are needed to mobilize more and better naturefinance. Investment is constrained by: the time-value gap of investments, the need for recurringinterventions (conservation and restoration), the relatively small size of investments, thegeographical aggregation of risks in a landscape (agriculture, fisheries, forestry, infrastructure),
and the increased vulnerability of habitats and frequency of natural hazards (all assets).
•

Unlock domestic capital: domestic resource mobilisation for nature should focus onbringing liquidity to nature stewards and SMEs, through affordable, accessible financing in
all forms: debt, equity, and blended finance.
•

Domestic capital markets are uniquely placed to engage the local private
sector and consumers. They have the footprint and capacity to deliver financeat retail level (local banks, asset managers, corporates, informal financiers andnational DFIs). Shifting agricultural value chains and markets in EMDEs requires
providing better access to financing for smallholder farmers and small and medium
enterprises (SMEs).

•

Farmers and fishers (nature stewards) require better access to working
capital. Liquidity shortages create a huge food security risk in Asia and SubSaharan Africa where smallholders produce 80% of the population’s food. It also
prevents multi-year agricultural transitions. Liquidity shortages can be addressed14through: secured long-term commercial contracts, the creation of bank accounts,
supplier financing solutions including cash management and working capital, debt
to early or mid-stage companies with limited or flexible collateral requirements;
access to small loans and credit (local currency) for working capital and long-term
finance, and technical assistance to borrowers for documentation and reporting.
•More mechanisms to enhance domestic bank capacity are needed. Priorities
include: building awareness and capacity, creating incentives for banks to lendthrough guarantees, mechanisms for international commercial banks to increase
local banks’ capacity, and facilitating the distribution of nature-positive finance (e.g.,debt, insurance, equity) portfolios.

•

Corporates with outsized impact on value chains (e.g., coffee, cocoa, palm oil)should commit to reducing deforestation in their supply chains and help build
consumer demand for more sustainable products. These companies need tocommunicate to shareholders that long-term activities which may impact shortterm value are critical and should be rewarded.

•

Ramp up development finance: development banks must be central to creating
an effective response and bringing diverse actors to support a shared agenda oftransformative development. As detailed in the Triple Agenda Roadmap, MDBs must be
bigger, better, and bolder. Their capacity to address market failures and act as a source ofpipeline, makes them essential to mobilize private capital through risk mitigation and risk
pooling, address nature-related risks, and provide transition signals to the wider system.
•

Development banks could further strengthen the impact of their US$18.7
trillion assets through mandates and targets for nature finance. This includes:
scaling MDB adaptation finance allocations, building ambitious climate and naturetransition action plans, creating explicit targets for nature within financing forclimate, and capacity building – at the interface of agricultural intermediaries, market
access players, microfinance institutions and other value chain actors – to increasefinancial inclusion and access to finance for smallholders and communities.

•

Development banks can build bridges between sovereigns and private actors.
Natural Capital Labs could be structured as incubators for innovative financing fornature and solutions addressing barriers.

•

Development banks, in particular MDBs, should further develop and promotecatalytic and concessional instruments. Concessional capital used fortechnical assistance and project preparation can help unlock private investment
by developing a stronger project pipeline. Risk transfer – hedging on currency risk,
political risk or commodity price insurance – can be provided by DFIs and MDBs toaddress a host of risks in EMDEs. Guarantees and ‘first loss’ tranches – are highly
catalytic but under-utilized – can target many risk types and attract private capital
players both domestically and internationally.

15

•

Build a comprehensive approach to integrating nature into sovereign debt markets:targeted mechanisms – debt-free financing, debt buybacks, and refinancing tied to naturepositive outcomes – could contribute to rebalancing sovereigns’ financial stability andenhancing stewardship to future generations.
•

EMDEs face mounting economic pressure as debt burdens rise – 60% of
EMDEs are either in or close to debt distress, placing severe limits on public
investment in nature. This is reinforced by the unequal architecture that makes
EMDEs access to financing inadequate and expensive.

•

There is growing momentum around debt conversions for nature, which
provide a blueprint for scaling and replication. In 2023, debt-for-naturetransactions were approved in Ecuador, Gabon and Peru – with a total value of
US$2.1 billion, or 20 times more than over the past decade. While recognizing thelimitations of these instruments, transactions over the last year provide a model
for co-investment platforms, in which grantors, guarantee providers, insurers andtechnical assistance providers coordinate to provide streamlined services acrossdifferent instruments and transactions, using shared impact principles, aligned
objectives, and operating as “deal teams”. (case study: Galapagós Blue Bond)•

To address a larger share of the total debt stock, nature covenants should be
systematically included in debt restructuring processes. Given the deadlock of
the Common Framework Initiative over reforming the sovereign debt architecture,complementary ad-hoc approaches will be necessary. Nature and climate KPIs
could also be built into debt service relief, such as the Debt Service Suspension
Initiative (DSSI), to complement and reinforce policy-based conditionality.

16

3

Four investment priorities to value intact nature,
restore degraded nature, and address thedrivers of nature loss
If implemented, the systemic transformation agenda set out in Section 2 above
would create an enabling environment supporting nature-positive solutions torapidly replicate and scale. We urgently need to accelerate investments that
address the drivers of nature loss, going beyond conservation and restoration
towards a shift in critical sectors, e.g. agriculture, infrastructure and extractives.
Many nascent success stories show that we have the tools and knowledge todeliver additional investment needs – valued at around US$400 billion annually by2030 – and re-orient existing capital away from harmful activities. The increasing
range of solutions across these investment priorities differ in risk-return profile andcommercial viability. Scaling them requires mobilizing the full spectrum of public
and private capital. In some cases, and unlike for energy systems, public capital
only, combined with regulation and standardisation, will be the critical unlock, whileother opportunities will be suited to commercial capital only.
Nature finance should drive more capital “into” nature – conservation and restoration – but
also “for” nature – shifting agriculture, fisheries, forestry, mining, infrastructure – towards
nature-positive outcomes. The Intergovernmental Science-Policy Platform on Biodiversity andEcosystem Services (IPBES) highlights five key drivers of nature loss: land use change, climatechange, pollution, invasive alien species, and natural resource use and exploitation. Naturefinance should focus on agriculture, forestry and fishing, which is responsible for 85% of species
loss, 80% of deforestation, 70% freshwater use, and drive US$12 trillion in “hidden costs”.
The good news is that a range of bankable nature-positive solutions are flourishing,delivering positive nature, climate and social impact as well as financial returns
for communities, countries, companies and investors. These can be broken down into
four priorities:•

Investments into ecosystem conservation and restoration: the Global Biodiversity
Framework calls for the conservation of 30% of terrestrial, freshwater and marine
ecosystems, and the restoration of 30% of degraded areas, by 2030. This should leadto the restoration of 150 million hectares of degraded agricultural land – an area larger
than Europe.

•

Investments in nature-positive food, forestry and fishing: upfront financing to nature
stewards will be essential to implement agroforestry, no-tillage farming, multi-trophic
aquaculture, improved nutrient management, and rotational grazing, for example. Financewill be needed for technical assistance, machinery, or cost amortisation to nature stewards
in the start of the transition period.

17•

Investments to shift diets: Global diets need to converge towards local variations of
the “human and planetary health diet”, predominantly plant-based diets which include
protective foods (fruits, vegetables and whole grains), a diverse protein supply, andreduced consumption of sugar, salt and highly processed foods.

•

Investments to reduce nature impact of infrastructure and extractive sectors
and develop better production practices: This includes mining, metals, and urban
infrastructure, which should include a shift towards less harmful practices across the
project lifecycle. It also includes water, waste and wastewater utilities, which prevent
pollution of critical ecosystems.

Nature-positive solutions offer different risk-return profiles and call for different
types of financial capital. In some cases, public capital only, combined with regulation andstandardisation, will be the critical unlock, while other opportunities will be suited to commercial
capital only. Scaling the most successful solutions requires mobilizing the full spectrum of public
and private investment, deployed alone or in combination. Catalytic capital to kick-off first-ofa-kind projects (grants, concessional) will be critical for many sectors, but de-risked and purecommercial capital become more relevant as projects mature. Risk mitigation and technicalassistance will be needed across investment priorities, especially before nature reaches
commercial viability.

4

An action agenda
In the face of nature breakdown, urgent action is needed to transition to adevelopment model that adequately values nature’s contribution to people
and planet. This paper is a call to action for delivering a transformative
agenda to rapidly accelerate flows of private and public capital “into” and“for” nature, and embed nature firmly into decision-making. To accelerateaction, we propose the following key actions, to be launched at or around
COP28, and to be developed in the next two years, until COP30 in Belém,
Brazil, which will represent an opportunity to take stock of progress:

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1.

Set targets and account for nature•

Adopt natural capital accounting standards in public and private investment andstrategic planning decisions, building on frameworks like UN SEEA and the Capitals
Coalition’s Transparent Methodology, and on early examples of national accounting
initiatives (eg. as seen in Rwanda).

•

Set science-based targets for climate and nature in line with SBTi and SBTN
guidance, and require commitment to science-based targets as a criteria for public andprivate investment.

•

Invest in the collection and sharing of high-quality nature data, promote and invest innational data standards and data sharing facilities and adhere to CARE and FAIR principles
to ensure ethical governance of nature data collection and use.

•

Set regulation for the disclosure of nature risks, impacts and dependencies, as
piloted through France’s Article 29, and commit to ‘radical transparency’ disclosing climate
and nature risks, impacts and dependencies under TCFD and TNFD.

2.

Harmonize policies for effective nature financing•

Develop and support comprehensive and up-to-date National Biodiversity Strategies
and Action Plans (NBSAPs) and fully integrate nature into Nationally Determined
Contributions (NDCs), leveraging recommendations and cross-country collaboration
initiatives on from the NBSAP Accelerator Partnership, and its knowledge portal•

Conduct and support integrated, inclusive spatial planning processes in line withtarget 1 of the Global Biodiversity Framework, to develop a national land use plan thatdelivers on climate, nature and development targets, ensuring IPLC engagement, andwhole-of-government approach for implementation•

Promote ambitious national standards and champion multilateral initiatives fornature, such as due diligence and disclosure legislation, bilateral and global agreements
on ending wildlife crime, nature-positive trade provisions and subsidy regimes•

Develop, deliver, and advocate for the mainstreaming of integrated policy processes
and build private and public sector collaboration to accelerate finance for naturepositive outcomes, for example through country packages (e.g., Brazil EcologicalTransformation Plan, Forest Climate Leaders’ Partnership)

3.

Ensure investments are just, accountable, and inclusive•

Integrate IPLCs into the design, governance and implementation of investments,
policies and strategies whenever these have direct or indirect contact with IPLC lands•

Secure IPLC land tenure rights as the foundation of engagement with IPLCs•

Commit to principles of justice and equity, including around country ownership andequitable pathways (requiring access, affordability and additionality)

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4.
•

Expand project finance for nature
Scale up regenerative value chains through guaranteed off-take agreements forregenerative commodities, and innovative financing facilities that aggregate investment,
provide technical assistance, and strengthen value chain linkages•

Build high-integrity carbon and biodiversity markets with robust design, governanceand implementation structures, powered by innovative financing mechanisms

5.

Deepen capital markets, mobilize private capital, and use publicfinance catalytically•

Unlock domestic capital markets, including banks, asset managers, and DFIs in EMDEs,
by building supplier financing solutions to close liquidity gaps, and stimulating domestic
corporates’ and private markets’ commitments towards regenerative value chains•

Ramp up development finance by increasing DFI and MDB mandates and targets fornature finance, strengthening MDB collaboration with the private sector through Natural
Capital Labs, and supporting MDBs in pioneering guarantee mechanisms, novel forms ofrisk insurance (including sovereign risk), and public finance support for innovation•

Build a comprehensive sovereign debt approach to nature by building co-investment
platforms to replicate debt conversions for nature, and integrating nature covenants in debt
restructuring and sovereign credit ratings20