Brief: Nature-based Enterprises Analysis

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  survey was done on NbEs which represent the supply side of NbS, as nature and/or NbS form the core of their product or service offerings. Their market opportunities are thus inextricably linked to market demand and financing of NbS.

The findings are contextualised in terms of small and medium-sized enterprises (SMEs) based on the 2023 report of the annual EC and ECB Survey on the Access to Finance of Enterprises (SAFE), to help frame NbE findings and identify potential commonalities or differences between the general SME population and NbEs.

This brief presents insights of the survey findings and an analysis of the nature-based enterprise market sector with reference to financing, including:

• Characteristics of surveyed NbEs
• Overview of market opportunities for NbEs
• Analysis of the distribution of  financing sources in NbE
• Financing needs, challenges and barriers faced by NbEs
• Policy recommendations to enhance NbE access to financing