Scaling Finance for Nature
Investing in nature is both crucial for the future and financially beneficial, as the risks of a lack of conservation are far more costly than the investments would be. There is a $700 billion gap per year in biodiversity finance, which needs to be closed by redirecting capital away from negative impacts and scaling up capital with positive impacts. Private financial institutions will play an important part in this, but their contributions are currently minimal.
This report by the University of Cambridge’s Cambridge Institute for Sustainability Leadership (CISL) explains why this gap exists and how to surpass the barriers that cause it. The main themes that cause inaction are:
— Limited capacity and knowledge
— Drawn-out timelines
— High perceived risk
— Underdeveloped regulatory and political landscapes
— Confusion on measuring impact
— A misunderstanding of what nature finance is
The final theme is the most important, as private finance institutions often think of nature finance as something with low returns that is not suitable for private commercial capital at scale. However, private capital is crucial to supporting nature finance, and it must focus on halting and reversing nature loss.
This report looks at how nature finance can help minimize current pressures on nature while also restoring and conserving it for the future. Nature-positive outcomes require both, and funding must be structured in a way that supports both outcomes. This report also explains what nature finance is, the role of private commercial capital in it, and how that capital can be part of the solution.
