G20 countries can take a leading role in enabling investments in nature

A new study by Climate Policy Initiative (CPI), in partnership with the Institute for Climate and Society (iCS), presents a toolbox of approaches for G20 countries to boost investments in Nature-Based Solutions (NbS), identifying three key levers critical to scaling investment. The report was developed within the G20 Sustainable Finance Working Group and launched at the event “How to  finance the positive bioeconomy for climate, nature and people,” on September 12th in Rio de Janeiro.  

“NbS can provide up to a third of climate mitigation needs for 2030 and provide economic and social development benefits for countries. There are significant potential investment opportunities, but the wide scope and nascent development of NbS requires us to better understand the levers to overcome existing challenges,” says Barbara Buchner, CPI’s Global Managing Director. The report analyzes 12 case studies of investment vehicles that finance, identifying three main levers to scale NbS finance: building better enabling environments, involving beneficiaries in financing structures, and the use of guarantees as risk reduction agents.

The markets for NbS initiatives are still at an early stage, so the public sector must play a crucial role in order for NbS to scale for private investment. Guarantees can help direct private capital towards NbS investment by reducing investment risk and creating a safer environment for testing solutions. The study also highlights the importance of enabling environments that create favorable conditions for private capital.

“We can apply lessons from other sectors, but there is no one-size-fits-all financing approach for NbS. Our 12 case studies show how these three levers can guide the actions of public and private sector actors to scale up investments in nature,” says Amanda Brasil-Leigh, Senior Program Associate at CPI.

The report’s case studies focus on restoration, conservation, oceans and water, bioeconomy and agroforestry. Additional themes to further develop and implement NbS include: how to define, value, measure, account for and monetize nature; creating a favorable political environment; exploring innovative NbS financial instruments; understanding the conflicts between NbS and other zero emission solutions; and aligning with other G20 initiatives.

For Maria Netto, executive director of iCS, “the G20 can leverage climate finance, especially related to nature-based solutions. Tools like blended finance can overcome important barriers to financing for nature.”

For more information, please contact
Camila Calado Lima
camila.lima@cpiglobal.org
+55 86 99966-0560