There is an urgent need to mobilise finance at scale to support nature-based solutions if we are to have any hope of responding effectively to the ongoing climate and biodiversity crises. The private sector has a key role to play, alongside scientists, civil society and governments. Unfortunately, the restoration of ecosystems is still an undervalued tool for climate change mitigation and adaptation. The Biodiversity Finance Initiative (UNDP BIOFIN) estimates annual investments of over US$400 billion are needed to protect biodiversity, but we can track only US$52 billion as of 2019. Many investors are deterred by the difficulty in finding projects of a suitable scale, a lack of data to measure impact, and a high level of uncertainty or project risk around many projects. We need an economic rationale and innovative financial methods to effectively build a global, biodiversity-friendly economy.
In response, the organisations Environmental Finance, Finance for Tomorrow, Global Landscapes Forum, Mirova and IDH - The Sustainable Trade Initiative organised three important events in November 2019, dedicated to exploring ways of investing in natural capital. These events aimed to create common ground and understanding about natural capital investments, help build a track record for investors, and foster partnerships among stakeholders. This 2020 Outlook for Investing in Nature builds on that experience, in order to share key insights for mobilizing economic actors in building sustainable landscapes and protecting our climate, land and biodiversity. It is part of a collective, sustained effort to bring the natural-capital asset class to maturity.
This document provides recommendations for actions that are necessary to enable a systemic change:
1. Use innovations and game changers to develop the Natural Capital Market
2. Applying landscapes approaches for inclusions and de-risking
3. Need for blended-finance
4. Harmonizing green finance taxonomy and E&S monitoring
The COVID-19 pandemic is likely an example of how the disturbance of ecosystems can have systemic consequences.