Scaling nature finance now The opportunity for investors in Brazil and beyond

I. Increase demand for deforestation-free commodities and Nature-based Solutions Clear and consistent demand signals are crucial to provide investors and entrepreneurs with the confidence to invest in and develop Nature-based Solutions, which can take many years to mature. Major food companies must increase demand for deforestation- and conversion-free commodities to give farmers the certainty needed to commit to the agricultural transition. Momentum has been building towards deforestation-free commodities for years, and these important steps must be implemented and expanded on: – Over 300 companies are aligning their policies with the Accountability Framework Initiative , a practical roadmap for addressing deforestation in supply chains. Meanwhile, 21 major companies in the Consumer Goods Forum, with a collective market value of more than USD$1.8tn, are using their collective influence to accelerate efforts to remove deforestation from across their suppliers’ entire supply base through the The Forest Positive Coalition of Action . – The First Movers Coalition for Food launched at COP28 aims to harness the power of 20 major food companies by creating a combined procurement commitment of up to USD$20bn sustainably produced and low-emission agricultural commodities. – The COP28 Action Agenda on Regenerative Landscapes aims to aggregate, accelerate and amplify efforts to transition large agricultural landscapes to regenerative landscapes by 2030 by brokering partnerships across the food and agriculture value chain. It follows a place-based management approach that involves collaboration of stakeholders in a landscape to advance shared sustainability goals and build resilience. – The Glasgow Financial Alliance for Net Zero (GFANZ) will be releasing a consultation paper with guidance on how to integrate nature into net-zero transition plans at COP16 in October. TNFD will be launching a complementary report at the same time. Recognizing that there is no net-zero without Nature, and with this guidance in place, the demand for nature-based solutions will continue to grow as business and financial institutions execute on their transition plans. And even as the global community seeks to agree and implement robust standards for carbon credits, international companies must also increase the number of ‘offtake  agreements’56 on offer for the highest integrity carbon removal projects, an essential indication of demand and willingness to pay for effective nature conservation and restoration projects at scale.57 Private financial institutions must also increase demand by advancing progress towards deforestation-free portfolios, while also actively looking at financing opportunities and incentives to drive investment in credible high-integrity Nature-based Solutions.II. Deploy ‘catalytic’ capital to unlock more private capital A targeted injection of ‘catalytic capital’ can de-risk and accelerate the flow of private investment to Nature-based Solutions, particularly in developing economies. The sums needed are not out of reach: IFACC estimates that USD$2bn dollars of catalytic capital by 2030 is needed to help unlock the growth phase of the agriculture transition in Brazil.58 By deploying catalytic capital, governments, Multilateral Development Banks (MDBs) and philanthropists can crowd in many multiples (3-5 x) more in private finance.59 This means that USD$2bn of catalytic capital in Brazil could help unlock close to USD$6bn-USD$8bn of capital for Nature-based Solutions by 2030. This capital will directly fund impactful, investible projects. And, at the same time, it will support a critical mass of projects that can together help establish the investment thesis for the next tranche of investment flows to Nature-based Solutions in Brazil and beyond. Theory is one step closer to reality: the Gordon and Betty Moore Foundation’s Environmental Conservation Program has announced its intent to advance a new catalytic capital fund focused on the Amazon, Chaco and Cerrado. If other backers can be secured, the fund has the potential to disburse USD$500m by 2030 and leverage USD$2.5bn in commercial capital, delivering a positive impact on 1.25 million hectares. Private financial institutions must support these efforts by increasing their own investments into Nature-based Solutions while also helping catalytic capital providers to design effective delivery models. Scaling nature finance now 33 32References 03 Unlocking the next phase of growth in Brazil and beyond Foreword 02 The Brazilian market – accelerating nowExecutive summary01 The opportunity and the imperative