Investing with Nature: Exploring Investment Opportunities Across Ecosystems. First-1. Introduction to Nature-based Solutions

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Financial institutions have a unique role to play in scaling up nature-based solutions (NBS), specifically in closing the large private sector financing gap. Investment in NBS needs to increase significantly from the current USD 26 billion per year. Currently, it represents only 17% of total investment in NBS. At USD 154 billion per year, the latter represents less than half of the USD 384 billion needed annually by 2025 (UNEP, 2022). Through lending, investing, and underwriting activities, as well as through their client relationships, financial institutions can mitigate climate and nature-related risks by redirecting financial flows towards different types of nature-positive outcomes. NBS have the potential to provide around 30% of the cost-effective mitigation needed by 2030 to stabilize warming below 2°C (IUCN, 2019). Find ways to work with
Ecosystems, rather than relying solely on conventional engineering solutions, can also help communities adapt to the impacts of climate change and mitigate the long-term impacts and dangers of climate change, the greatest threat to biodiversity. In addition to the fight against climate change, NBS will play an important role in aligning actions withthe Kunming-Montreal Global Biodiversity Framework (GBF), as well as in achieving the United Nations Sustainable Development Goals (SDGs). Building on the global momentum to close the financing gap for nature, this paper aims to offer an introduction to NBS through a financial lens and to generate understanding about the key role that financial institutions can play in financing climate and biodiversity resilience, adaptation, and mitigation through NBS.