Finance Solutions for Nature 2025

–Institutional investors – insurance funds, sovereign wealth funds and pension funds – can co-develop tailored instruments aligned with long-dated liabilities and biodiversity outcomes. –Bilateral donors, philanthropies and guarantee funds can anchor outcome funds by providing credit guarantees or first-loss cover to other lenders. –Banks and credit rating agencies can integrate nature-related metrics in corporate and sovereign assessments to better reflect nature- related risks in capital markets; they could also work with standards bodies to update credit risk methodologies. –Economists and financiers from all stakeholders, more generally, can help align new debt-related instruments with market conditions. This is particularly important for debt-constrained environments, where higher sovereign and corporate debt levels can be made more feasible with stronger incentives, clearer triggers and better risk-sharing. –Project developers and corporates can integrate climate and nature goals in issuances to deepen links between climate and nature finance, access pricing premiums and reduce costs. 3.3 Expand the investment-grade pipeline of nature projects Return-seeking nature finance is constrained by a shortage of investment-ready, scalable projects – many are too small, fragmented or lack investor- grade MRV systems. Addressing this requires both capacity and capital. Key enablers include project preparation funding, replicable financing templates, aggregation mechanisms and integrated MRV frameworks to lower costs. To succeed, more support is needed for early-stage and high-risk ventures that could become the future investment-grade pipeline. Venture-building models that deploy patient, risk-tolerant capital and provide hands-on operational and technical support are showing promise – particularly those tailored to local systems and able to source and strengthen projects traditionally overlooked by mainstream investors.108 These models are resource-intensive, but critical to identifying investable nature-positive businesses and guiding them through long timelines to resilience and scale. The following stakeholders have key roles to play in this action area: –The public sector can support pipeline expansion by developing tailored land use and licensing frameworks. This can improve the bankability of nature-positive projects by reducing perceived and actual risks, as well as providing a clear basis for revenue generation and cost recovery. –DFIs and MDBs can expand project prep facilities and local technical assistance (TA) hubs to build and scale up viable early-stage ventures. Stakeholders in this group also have the opportunity to champion cross-border investor partnerships and novel hybrid models that blend returns with environmental impact. –Banks, asset managers and institutional investors can support early-stage vehicles and incubation pipelines aligned to their investment mandates, while refining investment screening to include nature-linked outcomes.109 Credit: Seedark Finance Solutions for Nature: Pathways to Returns and Outcomes 34