Urban populations are expected to double in size by 2050.2 However, infrastructure development is expected to fall short of that growth, leaving urban residents facing declining standards of living and a degrading environment due to unplanned expansion, and insufficient and short-term investments.3,4 If continued urban growth is to be sustainable, urban financing must be nature positive – meaning it must prevent any further loss of nature and begin to reverse and halt loss that has already been caused. That ultimately leaves cities with two responsibilities – attracting sufficient financing to address the anticipated growth in urban populations, and making sure that finance for urban development is nature positive. Failure to address these will result in further destruction of nature in the urban realm and cities will continue to experience the negative consequences of a changing global environment. At the 2022 United Nations nature summit, COP15, participating governments and organizations agreed under the Kunming-Montreal Global Biodiversity Framework (KMGBF) that “by 2050, biodiversity [shall be] valued, conserved, restored and wisely used, maintaining ecosystem services, sustaining a healthy planet and delivering benefits essential for all people.”5 For cities and industries, this means embedding nature into all decision-making structures and processes.1.1 Protecting and restoring nature in a rapidly urbanizing world $482 million a year in health costs could be saved by adding urban trees in 10 of the world’s megacities.There are numerous avenues through which cities can look to incorporate nature into their urban development plans. From the presence and integration of natural elements into urban environments and landscapes, such as through nature-based solutions, to policy and regulatory measures. Examples of nature-based solutions include the installation of green infrastructure, afforestation efforts, rehabilitation of wetlands and introduction of wildlife corridors with native species. Examples of policies and regulatory measures may be incentives and mandates to redevelop brownfield sites, manage coastal zones, embed circular economy practices, install green roofs and advance car-free zones. The benefit of financing nature in cities has been demonstrated through numerous examples, yet not widely recognized or accepted by key decision-makers. Research and studies suggest that nature-based interventions increase a city’s resilience through an uptick in ecosystem- benefitting processes such as natural water filtration, urban cooling, pollution reduction and carbon sequestration.6 For instance, the addition of urban trees in 10 of the world’s megacities could save $482 million a year in health costs as a result of their ability to remove carbon dioxide and other pollutants from the atmosphere.7,8 Urban parks and green spaces can increase property values by 9.5%, while green roofs and walls offer 6.7% and 8% energy savings, respectively, to limit the heat island effect in urban centres.9,10 Investing in nature-based solutions is beneficial for the bottom line, and demand analysis has demonstrated that the potential market size for nature-based solutions is large yet unlikely to be met anytime soon.11 Nature Positive: Financing the Transition in Cities 7

Nature Positive Financing the Tranisition in Cities