Finance Solutions for Nature 2025

3.5 Shift market norms and incentives to recognize nature’s full value Embedding nature into economic and financial systems requires more than standalone solutions – it demands fiduciary alignment, institutional support and durable valuation methods for long- term investing. The investment chain can play a key role: asset owners and allocators shape mandates that influence asset managers, making trustee and board-level education crucial to shifting norms. Fiduciary duty is an important lever. As the Principles for Responsible Investment (PRI) emphasize, biodiversity and nature loss presents material financial risks. Integrating nature-related factors is therefore essential to meeting 21st- century fiduciary obligations.115 Boards and investment committees can actively understand and integrate these responsibilities. Nature can be considered across asset classes as part of a “3D investing” approach – balancing risk, return and impact – and in line with the GBF’s call to align financial flows with nature-positive outcomes.116 Success also depends on trusted valuation methods for ecosystem services, nature-inclusive credit and equity analysis, and financial structures that can demonstrate long-term nature-linked value. Innovations can be welcomed – including emerging approaches such as NACs and INP – as long as they are first tested through robust pilots.In addition to the priority actions described throughout this chapter that can shift market norms, the following stakeholders have a critical role to play: –International organizations can help align capital market rules by promoting best global practices, including methodologies, taxonomies and high-quality case examples. –MDBs can support this transition by helping mainstream long-term nature value into financial solutions and project appraisals and by piloting emerging models such as NACs and INP where relevant. –Institutional investors – particularly asset owners – can integrate nature-related risks and opportunities into strategic asset allocation and update investment mandates accordingly. –Asset managers and fiduciaries can update their investment policies and stewardship strategies to explicitly include nature-related risks and dependencies, aligning with PRI guidance on nature-related fiduciary duty.117 –Credit rating agencies play a systemic role in influencing investment flows – by evolving their models to account for nature-related risks and long-term ecosystem service dependencies, they can help shift market norms and reward nature-positive issuers. Biodiversity and nature loss presents material financial risks. Integrating nature-related factors is essential to meeting 21st- century fiduciary obligations. 36 Finance Solutions for Nature: Pathways to Returns and Outcomes