Scaling Finance for Nature: Barrier Breakdown

Private capital can play a critical role in closing the US$700 billion annual biodiversity finance gap and addressing nature’s decline. The Centre for Sustainable Finance, together with Capitals Coalition, UNEP-WCMC, IDEEA Group and Tecnalia, have produced a new report, as part of the A-Track project, to this effect which suggests one solution involves redirecting capital that is having a negative impact and scaling that which is having a positive impact.

Interviews with practitioners in the finance sector were carried out to investigate the misalignment between capital flows today and international goals such as the Global Biodiversity Framework (GBF). Limited capacity and knowledge, drawn-out timelines and high perceived risk, nascent regulatory and political landscape, and confusion on measuring impact were all noted as themes that created inaction. However, the main theme that emerged from nearly every conversation was that nature finance is often narrowly perceived as conservation finance with low returns, making it unsuitable for private commercial capital at scale.

To scale private capital’s meaningful contribution to a nature-positive economy, it must focus on both halting and reversing nature loss.

The report uses the mitigation hierarchy as a lens through which to view how nature finance can contribute towards the goals of the Global Biodiversity Framework.