finance for nature: Tripling investments by 2030

State of finance for nature:

The loss of finance nature is at the heart of many challenges in society, while nature-based solutions have the potential to address related crises: the rate of extinction of species, global warming, the growing number of extreme weather events and zoonoses such as COVID – 19 Investing in the need to take sustainable measures to increase ecosystem resilience and to address the challenges facing society, such as food security, climate change, water security, human health and greater resilience to risks of disasters improve.

Our existence depends on nature. Our collective failure to understand until now that nature supports our global economic system will increasingly lead to financial losses. More than half of the world’s total GDP is moderately or heavily dependent on nature. Agriculture, food and drink, and construction are the largest sectors that depend on nature and earn $ 8 billion in gross value added.

The integrity of rural ecosystems is severely hampered by human activities and the paradigm that has driven short-term economic growth. In order for humanity not to cross the safe limits of planetary boundaries, we need a fundamental change in attitude that changes our relationship with nature. Right now, most of nature’s benefits have no financial market value, despite supporting our current and future prosperity. From public procurement, taxation, trade, and regulatory policies to how businesses and financial institutions make investment, risk, and disclosure decisions, it is important to deeply integrate the value of nature into our economic system.

Knowledge of the capital required for NB is limited. Despite the growing interest from governments, corporations, and financial institutions, there is generally little knowledge and understanding of how much capital has already been set aside for assets and activities that can be considered nature-based solutions (NMS), how much capital should be reserved for NBS. and what are the clear investment opportunities?

This report aims to fill these critical gaps. It analyzes current global investments in NBS and estimates future investments needed to meet the ambitions of biodiversity, climate change, and soil remediation, as outlined in the three Rio Conventions.

The report concludes that approximately $ 133 billion flows into the NBS each year (with the base year of 2020), 86% of which comes from public funds and 14% from private funds. More than a third of public resources, totaling $ 115 billion annually, are invested by national governments to protect biodiversity and the landscape. Nearly two-thirds are spent on forest restoration, peatland restoration, regenerative agriculture, water conservation, and natural pollution management systems. The private sector NbS finances $ 18 billion annually.

These include biodiversity-related commitments, sustainable supply chains, private equity investments, and less philanthropic and private foundations. The total cash flow flowing to nature is significantly less than the cash flow from the climate.

Looking ahead, NBS investments are expected to at least triple by 2030 and double by 2050

if the world is to meet its climate change, biodiversity, and land degradation targets. This acceleration brings total investment to $ 8.1 billion and a future annual investment rate of $ 536 billion. Forest solutions cost just $ 203 billion per year, followed by forestry at $ 193 billion per year, grass recovery at $ 7 billion per year, and mangrove recovery at $ 0.5 billion per year. This report does not cover all types of NBs, especially the marine environment. This will be included in future releases.

Collecting data on capital investment in kind across all sectors and for all major economies has been difficult and estimates are highly uncertain. This report requires agreement on a system of labeling, monitoring, reporting, and financial condition verification for NbS. Improve the comparability and quality of data to help decision-making.

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