Finance Solutions for Nature 2025

# Solution Definition Scalability Nature impact 7 Thematic loans Commercial debt with proceeds ringfenced for specific environmental or social projects; aso called GSS loans; include project and supply chain finance.High; wide applicability and flexible transaction size; significant market size overall (>$200 billion/year) though nature labelled loans similarly small. Medium; strong track record, though concerns remain over transparency and reporting. 8 Commercial loans Traditional loans where borrowers raise capital and investors earn interest; capital may, by discretion, be used for nature projects.High; applicable to both small and large businesses/projects.Low; as the priority is financial returns. 9 Impact loans Loans that may finance nature-related projects; include blended/concessional finance; offer lower interest rates or extended repayment term; include microfinance solutions; overlap with “patient capital”.Medium; accessible through financial institutions with donor support, but eligibility is strict. Medium; designed to finance environmental outcomes, but impact tracking varies, nature valuation is not central and track record is mixed. 10 Bridge financing Loans used to bridge the financing gap between a conservation organization’s cash reserves and project costs; may be at concessionary terms. Medium; limited applications. Medium; track record is promising, but lacks outcome- based structure and nature valuation. 11 Debt-for-nature swaps (DNS) Financial mechanism to restructure sovereign debt in exchange for funding for conservation and restoration; underlying financial instruments include loans, bonds, guarantees, credit enhancements, insurance and/or grants. Medium to high; growing catalogue of transactions with increasing proportion of restructured debt used for conservation funding, though each transaction is complex and eligible debt remains limited due to creditor preferences. Medium; debt restructure creates explicit funds for conservation; reasonable track record in ocean conservation, though concerns remain over weak oversight, lack of local buy-in and greenwashing. 12 Natural asset companies (NACs)New class of publicly listed or private companies that convert the value of natural assets into financial capital through integrated reporting; structured as operating companies that issue equity. Medium; significant scale possible at full potential comparable to equity markets and wide applicability across primary sectors, though only one live transaction to date. High; price in the full value of ecosystem services into financial valuation, but no track record and greater volume needed for price discovery. 13 Commercial equity Publicly traded equity where issuers raise capital and investors earn dividends and capital appreciation; capital may, by discretion, be used for nature projects.High; due to standardized structures and access to markets.Low; priority is financial returns – unless the business is explicitly focused on impact. 14 Private equity Private placements in companies, potentially with nature-positive business models. High; well understood and highly applicable.Generally low, unless the business is explicitly focused on impact. 15 Impact equity Investments in social enterprises or businesses focused less on profit maximization and more on impact; accepting lower returns or higher risks. Medium; expectation of below-market returns limits investors base.Medium; track record is promising, though outcome tracking varies and nature valuation is generally not central. 16 Payments for ecosystem services (PES) Voluntary agreements offering financial incentives to landowners or stewards to preserve or enhance specific ecosystem services. Medium; unlocked significant capital in public schemes, but private schemes nascent due to unclear revenue streams and need catalytic capital. High; embed ecosystem service values into policy and markets, but concerns over pricing accuracy and returns below those of current nature-negative activities. 17 Environmental credits Verified units of positive environmental outcomes, e.g. biodiversity, water, carbon; projects increasingly blend credits.Medium; flexible issuance size and credible long-term offsets can attract capital at scale, but growth depends on nature- related regulation. Medium to high; assign financial value to specific ecosystem outcomes especially in compliance markets, but prices often diverge from ecosystem value. TABLE A2 Finance solutions for nature (continued) Finance Solutions for Nature: Pathways to Returns and Outcomes 40