Nature Positive Financing the Tranisition in Cities

Units in $, millions 2018 2023 2018 2023 2018 2023 $4 million$27 millionAgriculture, forestry, land use and fisheriesInfrastructure and built environment WaterTransport Cross-sectoral activities $2,097 million$846 million$1,158 million$476 million $180 million$490 million$1,259 million$665 million$1,623 million$1,655 million Energy and miningApproved urban nature project finance across selected sectors, from selected banks (2018 and 2023)FIGURE 5 Between 2018 and 2023, there was a marked reduction in approved urban nature finance from MDBs into projects on infrastructure and the built environment. This decline in spending coincides with a global housing crisis that is leaving millions without adequate shelter and a rise in environmental challenges in cities across the world. 32 In 2023, natural disasters across the globe resulted in an economic cost of $280 billion, and trends demonstrate that annual losses due to environmental disaster are only increasing (see Figure 5).33 In addition to housing, the sustained growth of cities necessitates the development of urban infrastructure that is resilient to changing environmental conditions. The challenge is to avoid adopting an approach in which the means justify the ends, which could jeopardize essential nature considerations in the pursuit of rapidly deploying critical infrastructure. It is imperative to ensure that sustainability and environmental integrity are prioritized in the planning and implementation of urban projects.34 Urban nature regional spending Analysis of approved project finance illustrates trends in global urban nature investment, demonstrating how MDB finance aligned closely to regions that experienced rapid urban land expansion and growth. In 2023, approved MDB project finance was concentrated in Asia and Europe, with each region making up approximately 30% of total spend across all banks. Review of total project spend does not align directly with impact, however, and project size is tied to impact. With fewer projects in Asia and Europe, the project sum is on average larger and likely to be more impactful. Source: World Economic Forum analysis of publically available MDB project data from: Asian Infrastructure Investment Bank (AIIB); Asian Development Bank (ADB), Inter-American Development Bank (IDB), African Development Bank (AfDB), European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD), World Bank Group (WBG). 20 Nature Positive: Financing the Transition in Cities