Nature4Climate Nature Finance Survey Reveals Key NbS Investments for 2024

• Nature-based solutions (NbS) that protect, manage, and restore ecosystems and address societal challenges are increasingly categorized as an asset class in their own right.

• Protecting climate and nature, increasingly good returns, and first mover advantages are key reasons investors are researching, or already financing and investing in, NbS.

• Avoided deforestation, agroforestry and reforestation were identified as the leading NbS investment opportunities for 2024.

New data from a poll of financial professionals with an interest in nature-positive finance has revealed key motivations, themes, trends and challenges shaping nature markets. Over 120 individuals from financial organizations, corporations and enabling companies responded to Nature4Climate’s (N4C’s) ‘Trends in Nature Positive Investments’ survey which covered reasons for considering NbS, investment themes (such as reforestation, mangrove restoration, and avoided peatland conversion) capturing most attention, interest in ‘nature tech’, and the developments needed to enable scaling of investments and financing to NbS.

The results of the survey will inform N4C’s activity to support the financial sector to increase allocations to NbS and shape events at New York Climate Week, COP 16, COP 29 and COP 30.

At present, private finance flows that have a direct negative impact on nature are US$5 trillion, 140 times larger than private investments into NbS. Annual NbS investment to limit climate change to 1.5°C and protect 30% of land and sea by 2030 needs to almost triple from US$200 billion to US$542 billion by 2030.

Key trends identified by N4C’s survey were:

• The finance sector is motivated to invest in nature positive out of a moral duty to help protect climate and nature (over 80% of respondents), but also because there are increasingly good returns (36% respondents) and first mover advantages (40% of respondents) to making such investments.
• Over half of respondents categorize NbS as its own asset class in their investments, with a third believing NbS will become a more official asset class in 2024.
• Avoided deforestation, reforestation, agroforestry and reforestation were identified as the leading NbS investment opportunities in 2024.
• Nature tech is becoming increasingly important for NbS investors, with three quarters of respondents either saying nature tech was important for their investments, or that they were actively making direct investments in nature tech.
• Over three quarters of respondents expect more announcements about institutional investment in NbS in 2024.
• When it comes to reducing finance and investments to nature negative activities, nearly half of respondents have, or are setting, a biodiversity or nature-related policy, over 40% have dedicated engagement activity with companies and clients with nature negative impacts, and 30% are working towards a deforestation-free finance commitment. This is in contrast to the sector at large, which is largely failing to act on reducing finance to nature negative activities[1].

To scale investment and financing of NbS, better data and more comparable metrics, greater comparability between NbS investments, and more and larger deals, are needed. Other key trends identified for nature-based investments in 2024 were further maturation of biodiversity credits, integration of emerging tech, and market participants using experience with forestry to finance other critical ecosystems, such as peatlands and mangroves.

Lucy Almond, Director of N4C said “In 2022, investments in nature-based solutions totaled approximately $200 billion, but finance flows to activities directly harming nature – such as deforestation – were more than 30 times larger. N4C is focused on supporting the financial sector to urgently redirect finance away from activities with a negative impact on nature and towards nature-based solutions.

These important results show that while there is an immense interest in scaling finance to support nature, better data and more comparable metrics, more options for blending with public or philanthropic capital and an improved market infrastructure are needed to help the market grow. N4C’s program of events, education, and communications will help drive these shifts over the coming years.”

The full survey results were made available to all respondents. A full list of respondent’s organizations is available on request.

About Nature4Climate

Nature4Climate (N4C) is a multi‐stakeholder coalition of 26 partner organizations and a strategic platform for communications, advocacy and campaigns. Our mission is to ensure nature is a third of the climate solution, mitigating at least 10 gigatons of carbon dioxide equivalent a year by 2030.  N4C brings together networks around the world in a joint effort to drive investment in and action on nature-based solutions (NbS). It does this by catalyzing partnerships between governments, civil society, businesses, and investors.

[1] Global Canopy’s Deforestation Action Tracker finds that the sector is largely failing to act. 75% of financial institutions with significant climate commitments do not have a public deforestation policy.

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