Prospectus for Nature-Based Solutions business investment. REGREEN Deliverable D8.8
Creators: name: Ellmer, Hans-Peter
name: Blaettner, David
name: Türk, Andreas
Publisher: name: REGREEN - Fostering nature‐based solutions for smart, green and healthy urban transitions in Europe and China. Horizon2020 Grant No. 821016.
Year: 2024
Subjects: Nature Based Solutions
Investment
Nature Based Enterprises
Natural capital
Business models

description: Executive summary

Urban areas are increasingly experiencing the consequences of climate change, loss of biodiversity and nature and social challenges. The awareness that Nature-based Solutions (NbS) will play a central role in the process to more sustainable, liveable and resilient cities is growing. However, in order to mainstream NbS in the planning and implementation of NbS on the ground in cities, far higher amounts of funding are needed than currently provided. The public sector alone may not be able to secure the required funding but will need to increasingly engage public-private partnerships and private investment. However, the boundaries of who should be considered responsible for the required investment and to what extent cannot be simply drawn. Although NbS provide multiple benefits, offering cost-effective solutions to many current urban challenges, private investment into NbS is currently hampered by the need to secure a return on investment. While NbS can provide opportunities for climate risk reductions that could be made ‘bankable’, private investors are less inclined to (co-)fund the aspects of NbS that are so-called ‘public goods’, i.e. ecosystem services that every member of society can use or benefit from without reducing its availability to others. Examples of public goods provided by NbS is clean air, clean water, or spaces for mental and physical restoration, education and recreation. Public goods are typically provided by government and funded through taxes, but the need for a step-change in financing of NbS requires different models of collaboration between local authorities, governments and the private sector.

This prospectus provides insights into the structure of the market for NbS and its regulations and framework conditions from a practical perspective. Current developments and requirements were discussed with experts, as well as barriers to the financing of NbS and how they could be overcome. 

An approach for developing sustainable business models is outlined in theory and applied in practice, resulting in three distinct business models for NbS: i) a public-private driven model aiming for a balanced and fair relationship between parties; ii) a commercially driven consultancy model; and iii) a citizen driven model. These models provide first-stage concepts, recommendations, and best practices for business activities, each with different potentials and varying degrees of private or public participation.

Acknowledgements

We would like to thank all REGREEN partners for the lively discussions on the topic at in-person and online project meetings. Furthermore, we thank our colleagues from the REGREEN Urban Living Labs (ULLs) Aarhus and Velika Gorica for the inputs for our business cases, and to the participants of the group discussion on the Chinese market – REGREEN colleagues Richard Hardiman and Yao-Yang Xu (Institute of Urban Environment – Chinese Academy of Sciences), China expert Hew Slater (Client Earth China), and to the interviewed experts from “Fresh Thoughts Consulting”, “Greenpass” and “Zelena Energetska Zadruga”