Brief: Unlocking Private Capital for Nature-based Solutions (NbS)

Currently, there is a range of nature-based solutions (NbS) emerging, primarily supported by strong public funding, but a comprehensive market for NbS has not yet emerged. Despite the growing prominence of NbS in scientific and policy discussions, information and evidence pertaining to successful financing and incentive mechanisms remain fragmented and not readily accessible.

To address this gap, Invest4Nature has mapped the current state of the market for financing NbS in a full report to explore the potential for increasing private sector engagement. This includes a systematic literature review of the state-of-the-art for NbS financing models and incentives and an analysis of the needs and perspectives of different market players, including the public sector, the investor community and Nature-based Enterprises (NbEs).

A diagnostic  survey was carried out to explore how ready and engaged private capital providers are to support the broader private sector investment in NbS. It aimed at identifying the required and most suitable support mechanisms for potential finance providers for NbS to overcome existing barriers. It also sought to understand the possibilities in accelerating private sector investment in NbS.

The survey’s target audience corresponds to: 1) credit institutions (banks), making  up 40% of respondents; 2) investment funds and asset managers; and 3) insurance companies’ investment divisions. The majority (62,5%) were active in the European market, following the location of financing recipients.

This brief presents insights from the Invest4Nature survey with the private capital community exploring how financial institutions perceive NbS investments.

It covers:

• NbS and the motivation for private investment in NbS
• Opportunities within the landscape
• Barriers to investment
• Recommendations to policy on local, national, and EU-level