Nature-based solutions (NbS) can – if properly designed and implemented – be a cost-effective approach to tackling the combined challenges of climate change, nature loss, and human wellbeing. However, a significant increase in nature and biodiversity financing, of USD 598–824 billion annually between now and 2030, will be required in order to realise this potential.1

Currently, over 80 per cent of the investments in NbS are derived from public and philanthropic funders2, although this is nowhere near the scale required if we are to plug the financing gap. We must mobilise private sector finance. Despite growing awareness among private investors of the opportunities presented by NbS investments, there are very few existing NbS projects that meet investment requirements and deliver financial and impact returns.

A new report developed by WWF and South Pole, supported by HSBC, highlights some real-world examples of bankable NbS deals and analyses the underlying common success factors that are key to designing bankable NbS projects that can secure critical private capital. It found that:

  • There is no simple “blueprint to bankability". There are a variety of context specific factors involved in designing and implementing a NbS.
  • While some success factors have high potential for improving the bankability of a NbS, their implementation can be too challenging for many projects, especially those that are smaller in size.
  • Projects must be designed in close collaboration with potential investors.
  • A success factor for one project can be a hindrance for another – understanding the local context is key.

The findings of the study do not mean that successful projects cannot be recreated elsewhere. The study finds that the key to replication is to adopt a flexible approach and identify locations where the main success factors (such as a crucial policy incentive) can be realised.

Read the full report here.

 

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References:

1 Deutz, A., Heal, G. M., Niu, R., Swanson, E., Townshend, T., Zhu, L., . . . Tobin-de la Puente, J. (2020). Financing Nature: Closing the global biodiversity finance gap. The Paulson Institute, The Nature Conservancy, and the Cornell Atkinson Center for Sustainability.
2 United Nations Environment Programme, the World Economic Forum, the Economics of Land Degradation & Vivid Economics. (2021). State of Finance for Nature. Retrieved from https://www.unep.org/resources/state-finance-nature