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

Brazil is poised for the next phase of growth. Supportive government policy under Brazil’s Ecological Transition Plan is helping. Investments and lending in Brazil’s agriculture transition have been accelerating. New analysis of publicly reported deal flow by Capital for Climate shows that there was at least USD$1.67bn of capital allocated to Nature-based Solutions in the country in the last 12 months.“ Simply put, climate strategies that don’t include nature are incomplete.” “ The next 24 months must prove pivotal for financing a nature, food and land transition every bit as consequential as the energy transition that is now underway.”Destruction of the planet’s great biomes is driving us deeper into an avoidable climate crisis. Forests, grasslands, plants and soils today store more than twice the amount of carbon contained in all known oil, gas and coal reserves. Yet, unsustainable use of these lands is too often turning vital natural carbon sinks into some of the largest sources of carbon emissions. To stabilize our planet, decarbonizing our energy, transport and industrial systems is both absolutely necessary – and not enough. Without urgently prioritizing the protection, restoration and sustainable management of nature, the climate equation needed for net-zero doesn’t balance. Simply put, climate strategies that don’t include nature are incomplete. In 2021, over 100 countries committed to end deforestation by 2030. At COP28, nature was placed at the heart of the Global Stocktake. Almost every country called for an end to deforestation, and 160 governments set out a roadmap for integrating nature and food systems in addressing climate change. But current levels of finance to achieve these goals remain insufficient . By 2030 Annual investment into Nature-based Solutions must almost triple globally from USD$200bn to USD$542bn. Public money is being spent inefficiently , with trillions of dollars in environmentally-destructive subsidies only making these crises worse. And the investments mobilized for nature have been unfairly skewed. Only twenty-percent of today’s nature finance flows to developing countries, such as Indonesia, Ghana and Colombia. This is despite developing economies offering ninety-percent of the nature investment opportunity this decade. Now, a new investment prospectus for nature is coming into view. Markets like Brazil, set to host COP30, hold both enormous potential for private investment and new models for investing that other biodiversity-rich markets can adapt and replicate. This report shows how a mass of bankable and investable opportunities are now available and accelerating in Brazil. As the below pages underline, nowhere has higher potential to sequester carbon using Nature-based Solutions. Many of these projects are increasingly proving profitable and productive. From transitioning to sustainable agriculture, to restoring forests and regenerating degraded land, some projects have boosted farmers’ earnings by up to four times per hectare per year, delivering investors better risk-adjusted market returns, and strengthening countries’ food security, all while mitigating carbon emissions and strengthening climate resilience. Scaling nature finance now To fully unlock this opportunity of global significance, three things must happen, urgently. First, we need to stimulate and scale demand for deforestation free commodities and nature based solutions. Second, public funds are not enough so we must scale private finance which today represents only 18% of nature finance, just one-sixth of that going to clean energy systems today. A major injection of catalytic capital – investments that accept a higher share of risk or concessionary returns compared to conventional capital – is required. Third, we need better alignment between climate and nature policymaking at both international and national levels. The Autumn deadline for hundreds of nations to submit their biodiversity strategies at COP16 in Colombia, followed by the February deadline for 200 countries to submit their updated national climate plans under the Paris Agreement, makes this a prime moment to do just this. With COP29’s focus on financing the transition and Brazil’s leadership of COP30, the next 24 months must prove pivotal for financing a nature, food and land transition every bit as consequential as the energy transition that is now underway. It is within our reach to do so. Dr Mahmoud Mohieldin , UN Climate Change High-Level Champion, COP27H.E. Ms. Razan Al Mubarak , UN Climate Change High-Level Champion, COP28 Scaling nature finance now 05 04References 03 Unlocking the next phase of growth in Brazil and beyond Foreword 02 The Brazilian market – accelerating nowExecutive summary01 The opportunity and the imperative