Finance Solutions for Nature 2025

3.1 Standardize decision-relevant data for investors 3.2 Strengthen structuring approaches and de-risking mechanisms Nature finance instruments depend on robust, comparable metrics to price in the full value of nature. Yet the data landscape remains fragmented, with inconsistent KPIs and weak disclosure in instruments such as SLLs, SLBs and environmental credits. Reliable MRV standards, credible baselines and independent assurance are critical to ensure financial terms are linked to real outcomes. Bridging natural capital and financial accounting through mechanisms such as NACs remains an urgent but still nascent frontier. The following stakeholders have key roles to play in this action area: –Standards bodies issuing mandatory and voluntary standards can drive convergence around nature KPIs for nature finance and natural capital accounts, leveraging existing frameworks such as those developed by ICMA, TNFD and the Science Based Targets Network (SBTN). –Credit rating agencies can support efforts to improve nature disclosure and MRV data, as they rely on credible, comparable nature- related metrics to assess creditworthiness and price ecosystem risks into sovereign and corporate ratings. –Academia and data platforms could support development of sector- and project-specific benchmarks for natural capital. –Auditors and assurance providers can engage standards bodies to review reporting protocols. –MDBs, civil society and international coalitions can help develop nature valuation methods linked to financial decision-making, to drive greater transaction volume and convergence towards market pricing of ecosystem services. Learnings can be drawn from programmes such as the World Bank’s Global Programme on Sustainability,102 the IDB’s Natural Capital Lab103 and the Nature on the Balance Sheet Initiative led by the Capitals Coalition.104 –Banks, asset managers, companies and institutional investors could pilot natural capital assessments, works towards natural capital accounting and align these approaches with portfolio management, disclosure and reporting. Private capital faces real and perceived risks in nature finance. Complex structures and lengthy timelines for instruments such as sustainability- linked solutions, DNS and environmental credits can increase transaction costs and deter investment. Illiquidity remains a barrier. Investors often face hard currency constraints and volatile conditions in accessing emerging markets, where large nature- related opportunities often lie.105 Issuers similarly struggle to access global capital markets from non-investment grade countries. These risks must be better managed. Successful deals embed bankable nature outcomes in familiar structures, aggregate and securitize small but similar products, use transparent public-private risk sharing and offer clear return pathways. Blended finance tools (e.g. first-loss capital, guarantees, outcome-based payments) and simplified, replicable transaction templates can help lower barriers and accelerate investment. Exploring synergies from climate finance, where clean development mechanism (CDM) projects with verified local co-benefits earn up to a ~30% price premium, can help accelerate these processes.106The following stakeholders have key roles to play in this action area: –The public sector can be a critical de- risking investor, accounting for over 80% of nature-positive financial flows in 2022. As with education or health, nature delivers long-term value even when financial returns are not immediate. Governments therefore can have clear incentives to invest in the full value of nature for its ecological, social and economic dividends. –MDBs, DFIs and international organizations can expand collaborative blended finance platforms and credit guarantee schemes to expand access to catalytic capital. They could also engage proactively with institutional investors to co-design bankable structures. Addressing emerging economy-specific data and capacity barriers through regional knowledge hubs or joint rating agency frameworks could be crucial to scaling-up blended products.107 Successful deals embed bankable nature outcomes in familiar structures, aggregate and securitize small but similar products, use transparent public-private risk sharing and offer clear return pathways. Finance Solutions for Nature: Pathways to Returns and Outcomes 33