Finance Solutions for Nature 2025

–Venture capital funds, venture studios, accelerators and related impact investors can play a crucial role in de-risking early-stage models, matching risk-return profiles, scaling- up pipelines, expanding due diligence and bridging the gap between local innovators and institutional investors across the startup funding cycle. –Civil society organizations such as NGOs and conservation funds can act as intermediaries to aggregate small projects and lower transaction costs. 3.4 Build market demand through an enabling environment Nature finance still lacks the public commitments and market infrastructure that helped scale up climate finance. Despite renewed ambition under the Kunming-Montreal GBF, many countries are yet to translate global targets into enforceable domestic action or investment plans. For instance, National Biodiversity Strategies and Action Plans (NBSAPs), the primary policy tool under the GBF, often struggle to achieve cross-ministerial alignment and rarely cascade into private sector investment mandates or fiscal policy. Crucially, real-economy incentives are among the most powerful ways to drive nature investment. These include incentives such as repurposing environmentally harmful subsidies, building on Target 18 of the GBF,110 public procurement and investment mandates. Sluggish or uncertain enabling conditions, however, deter private capital. There is a pressing need for long-term policy stability, disclosure regimes and incentive structures that reflect nature’s economic materiality. Governments have the most critical role to play here, but many other stakeholders can help drive stronger signals to markets: –National governments can seek to strengthen legal frameworks, national development plans and NBSAPs to codify key GBF targets and integrate transition plans, as well as to provide regional and sectoral benchmarks to achieve them.111 Japan offers a leading example – its 2023-30 NBSAP is embedded within a broader “nature-positive economy” transition plan.112 Key elements of success include: securing leadership from critical departments and ministries in economic planning, finance, agriculture and more; aligning nature-related targets with nationally determined contributions (NDCs) under the UN Framework Convention on Climate Change (UNFCCC); embedding nature investment targets and fiscal reform; and ensuring targets are devolved to provinces and cities. Further progress could include linking commitments to natural capital accounting frameworks and measures of performance such as gross ecosystem product (GEP); and scaling- up performance-linked budget mechanisms, such as ecological fiscal transfers, that reward conservation outcomes. –Central banks and supervisors can integrate ecosystem risks into macroprudential frameworks, including stress testing and scenario analyses. Organizations, including the Network for Greening the Financial System (NGFS) and the Financial Stability Board (FSB), have issued guidance to support these efforts.113,114 –Donors, MDBs and international organizations can play a key role in country- level reform, capacity building and technical support to improve planning, monitoring and implementation. Real-economy incentives are among the most powerful ways to drive nature investment, such as repurposing environmentally harmful subsidies, public procurement and investment mandates. 35 Finance Solutions for Nature: Pathways to Returns and Outcomes