Nature Positive Financing the Tranisition in Cities

Limitations to cities’ enabling environment (continued) TABLE 3 Enabler Limitation Impact on nature mainstreaming Impact on nature- positive finance Stakeholder engagementUnfamiliarity with investment topic Limited and jargon-heavy communication about the benefits and impacts of investing in nature has left institutional investors poorly informed about the technicalities and associated risks. This results in fewer projects being developed and fewer successful business models globally, as nature projects are often tailored to specific circumstances and locations. Additionally, investors struggle to assess the nature impact of potential investment opportunities, which affects their investment criteria.54Limits the ability of financiers to raise awareness on alternative engineering solutions (such as nature-based or combined approaches) and hampers the development of new, impactful and innovative solutions that have a positive impact on nature.Deprioritizes the urban nature agenda, as national governments prefer to finance initiatives that have large environmental impacts and operate on a large scale.55 CapabilitiesCapacity constraints Governments often face resource constraints, which can hinder their ability to effectively use the skills and capabilities present within their own workforce when applying for project funding. This limitation necessitates significant technical support from MDBs throughout the due diligence and appraisal process.56,57,58,59,60Introduces challenges with using complex financial instruments such as green bonds, which require extensive due diligence processes that may take up to eight months.61Creates difficulty with structuring projects that meet MDB environmental and social safeguards objectives.62 29 Nature Positive: Financing the Transition in Cities