A Market Review of Nature-Based Solutions (NbS): An Emerging Institutional Asset Class”

This report has conducted a global literature review of investments and desktop research to identify global examples of repayable investment into NbS to: Map completed investments into NbS to determine market trends; Analyse common NbS business models and investment structures to identify existing and emerging opportunities for investors Determine key barriers to investment and recommendations for institutional investors and policymakers in the UK and Europe to support the acceleration and scaling of investment into NbS An estimated $845 billion of annual investment is required to safeguard the natural environment, but current annual spending is only around $134 billion.3 This annual investment need of over $700 billion cannot be met by public and philanthropic funding alone. As of 2019, only $20.75 billion of private capital is estimated to have flowed into nature-positive activity and conservation investments.4 Existing levels of private investment must be dramatically scaled in order to meet the conservation funding gap. Summary of findings: There are significant numbers of NbS projects operating on ‘commercial’ rather than philanthropic terms. There are investible income models for NbS projects, with stacking of revenues increasingly being used to deliver more investment-ready transactions. As an early-stage market, there remains complexity to work through and barriers to unlock to achieve scale.