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

III. Integrate climate and nature policy at the international and national level We are now entering a critical period when governments will be required to submit new, more ambitious national climate and biodiversity plans at two upcoming UN milestones, both hosted in ecologically ‘mega-diverse’ countries: CBD COP16, the biannual biodiversity summit in Colombia (2024), and UNFCCC COP30 in Brazil (2025). Governments must use this opportunity to accelerate and integrate policy development, delivery and monitoring processes. This will break down unnecessary silos to unlock win-wins and drive efficiencies that save time and public resources.62 Overview of international policy processes for climate change mitigation, adaptation, and biodiversity Convention Framework Paris AgreementGlobal Biodiversity Framework (GBF) National Strategies Nationally Determined Contributions (NDCs)National Biodiversity Strategy and Action Plan (NBSAPs)To support such efforts the Climate Nature Coordination Platform was launched at the Bonn Climate Change Conference. This aims to ensure land and nature are at the heart of enhanced NDCs during the critical months ahead of COP29, onto COP30, and towards achieving 2030 climate goals.Catalytic capital refers to debt, equity or other investments that accept disproportionate risk and/or concessionary returns compared to conventional capital.60 By design, it serves to de-risk projects, unlocking and enabling the next stage of market-rate capital to come in. What is catalytic capital? Catalytic capital can play a particularly important role in helping to manage the uncertainty factor – which can often be a more relevant factor than known risks for Nature-based Solutions. Catalytic capital can be used to validate the feasibility and potential impact of innovative NbS approaches. By supporting early R&D and technical assistance, catalytic capital can build a foundation for future growth. Catalytic capital can supply growth capital to expand pilot projects, conduct further testing in diverse environments, and attract larger-scale investors. Catalytic capital can facilitate the widespread adoption and integration of NbS into mainstream practices and policies by offering bridge financing or mezzanine funding to support the transition to large-scale operations, including significant infrastructure investments, partnership development, and policy advocacy. Catalytic capital must be designed to unlock rather than crowd out commercial finance solutions. For instance, it must be deployed for limited time periods and in a highly targeted way, ensuring it is clearly additional and supporting the development of robust business models.61 It is called ‘catalytic’ capital due to its importance in unlocking growth at all the key stages of a project’s lifecycle: Proof-of-concept: Proof of scale: Scale-up: Catalytic capital is usually drawn from sources such as philanthropy, government, Development Finance Institutions (DFIs), Multilateral Development Banks (MDBs), and risk-based funds. It can take various forms, including: – Grants – Patient/longer-tenor investments – First loss, mezzanine capital – Funds to pay for insurance – Guarantee facilities for risks such as currency – Funds for early research and development (R&D) and technical assistance Source: WWF, Breaking Silos: Enhancing synergies across NDCs and NBSAPs, December 2023. 34 Scaling nature finance now 35Foreword References 02 The Brazilian market – accelerating now03 Unlocking the next phase of growth in Brazil and beyond Executive summary01 The opportunity and the imperative