Key enablers for mobilising private sector finance for nature-based solutions

Introduction

In the face of rapidly escalating climate impacts, the imperative to ensure food security for a burgeoning global population, and the urgent need to halt and reverse biodiversity loss and ecosystem degradation, attention is increasingly turning to the potential of nature-based solutions (NbS). NbS are interventions that leverage the power of nature and healthy ecosystems to protect people, stabilise the climate, and preserve biodiversity for a sustainable future. NbS implementation often requires substantial upfront investment to achieve significant scale. Currently funding predominantly comes from the public sector but mobilising private finance on a larger scale, in addition to a substantial increase in public funding, is crucial to close the gap between current finance flows and the investment needed to meet global targets.

The lack of scalable and accessible impact data presents a major barrier to assessing environmental impacts at a granular level, increasing privately funded NbS projects, and integrating biodiversity insights into financial decision-making (WWF, 2022). World Resources Institute’s (WRI) Land and Carbon Lab 2023 Summit demonstrated that advances in remote sensing– the process of monitoring the Earth through satellites or aircraft – can provide accurate and scalable data that can help quantify and measure the impacts of NbS interventions. This in turn is crucial to mobilise private sector finance and investment for NbS. However, current data collection methods only paint a partial picture for potential investors – partnerships play a critical role in transforming knowledge into action and effective communication underpins robust stakeholder engagement that ensures long-term sustainability and investor confidence in NbS. Combining cutting-edge monitoring with strong partnerships, clear communication is key to successfully scale data flows, and ultimately private finance flows, to support NbS implementation.

Monitoring to scale: the role of remote sensing 

Accurate and robust monitoring enhances our understanding of impacts on biodiversity and ecosystem services, which underpin climate change mitigation and adaptation, water management, and human wellbeing. Robust and timely monitoring is also necessary to maximise and ensure the integrity of private sector investment. It is the foundation for financial mechanisms such as carbon markets, impact bonds, and payments for ecosystem services. Businesses also need to track their investments in value chains to meet climate and nature targets for initiatives like Race To Zero, the Science-based Targets Initiative, and the Science Based Targets Network.

To establish robust monitoring and secure investment, access to high-quality, affordable data and metrics is essential, but traditional data collection methods are often too costly to scale. Funding improved monitoring capabilities increases NbS accountability, driving private sector investment.

Remote sensing can revolutionise data collection by providing consistent, objective, and scalable information that can be applied across different regions and ecosystems. For instance, it is not feasible for field methods to survey every tree in a large area, but remote sensing can provide large-scale coverage over diverse landscapes, particularly when combined with other data methods such as machine learning. For example, recent advances by WRI allow pin-pointing the billions of trees outside of forests that provide crucial benefits to local communities. This technology offers extensive coverage, timely data acquisition for monitoring changes, and standardised data quality with reduced potential for human error, enhancing long-term monitoring. WWF has also released the WWF-SIGHT, a global intelligence platform that integrates diverse spatial datasets with satellite imagery to provide near real-time insights on conservation assets worldwide. An example on the ground is the Nature for Norwich project, supported by WWF-UK and others, which aims to demonstrate how to harmonise multiple revenue streams from burgeoning nature markets in the UK. It does so through remote sensing by combining AI analysis of geospatial imagery with traditional surveys on the ground, which has reduced time effort for biodiversity baselining and monitoring 10-fold. By covering large geographic areas rapidly and at relatively low cost, remote sensing reduces the financial burden associated with data collection and monitoring, making NbS initiatives more financially viable and therefore attractive to private investors seeking efficient and scalable solutions. Investing in enhancing, implementing, and scaling remotely sensed data solutions is key for cost-effective monitoring and for bolstering confidence in the benefits claimed by NbS implementors, encouraging investment into NbS projects.

Aside from its scalability, remote sensing has other benefits. For example, it can monitor retrospectively, filling historical data gaps that may not have been collected through field work. Remote sensing can also help with monitoring areas that may be difficult or dangerous to reach. This technology can help expand projects’ scope and impact, attract larger investments, and replicate successful models in new locations, thereby accelerating the scale-up of private finance in the NbS sector. The wealth of data provided through remote sensing enhances transparency, accountability, and credibility, thereby increasing investor confidence in NbS projects using it. 

While remote sensing is a powerful tool to improve large-scale data collection and monitoring of NbS projects, verifying remotely sensed data remains essential for ensuring accuracy, accountability, and local buy-in. Furthermore, access to remote sensing technologies, and capacities to use these remains unequal (WWF, 2021). To compliment remote sensing, partnerships with local organisations and communities are crucial for local-scale data verification and impact delivery.

Empowering impact: the critical role of partnerships

Private investors often perceive NbS projects as risky due to uncertainties around returns on investment and long-term viability. Partnerships between public entities, NGOs, the financial sector, and other stakeholders can help mitigate these risks by incorporating local context in global or regional monitoring data. Understanding these risks helps determine project viability and long-term success. A strong dialogue between data experts across NGOs and financial actors is crucial to develop data solutions that address emerging needs (WWF, 2020). Importantly, engaging local actors is crucial to understand the context in which the data is used, to interpret the data meaningfully and to determine the data’s relevance and applicability for the intervention. These local interpretations are important to understand impacts from projects beyond just the biophysical. For instance, incorporating knowledge from Indigenous Peoples and Local Communities can help define pertinent social and economic impacts and risks, which are meaningful information for investor decision making.

By bringing together diverse expertise and perspectives, partnerships enable the development of data and technologies that enhance the effectiveness and scalability of NbS initiatives. These engagements are crucial for stakeholder buy-in, which in turn is key for increasing the uptake of data tools and enabling the scaling of data collection efforts, such as verifying geospatial data. For example, the Trillion Trees joint venture, between BirdLife International, Wildlife Conservation Society and WWF, engages partners and local communities to harness the power of Trillion Trees FORMAPP, a data management system consisting of an open-source smartphone app, a database, and an online data portal, to track forest and landscape restoration activities. This collaborative approach to data collection ensures that the data collected are accessible to and useful for local people, whilst also providing a transparent and accountable method of verifying the impact of high-quality forest restoration projects. The inclusive partnership-based process for collecting robust data to verify the impact of high-quality forest restoration projects gives investors confidence in the impact of their investment and contributes to the sector’s evidence base for the efficacy of and opportunities for larger scale investments in NbS.  Partnerships like Trillion Trees facilitate the data exchange necessary to inform the large-scale solutions that are necessary to attract funding opportunities and investment at scale.

Strong partnerships are pivotal in transforming knowledge into action. For maximum impact, stakeholders should actively participate in shaping the goals and outputs of these partnerships. Participating in this process builds trust, support, and commitment to their collaboration, thereby increasing confidence in the success of the partnership's outcomes and creating opportunities for future collaboration.

The most effective partnerships balance diverse stakeholder needs and perspectives, but this requires navigating the politics of knowledge production and potential biases, which can hinder partnerships if clear communication channels are not maintained.

Bridging the gap: overcoming communication barriers

Breaking down communication barriers is crucial for securing, building, and maintaining effective partnerships, which are in turn fundamental for monitoring at scale. Understanding how and where these barriers arise is important for recognising and promptly addressing them.

Miscommunications may arise because stakeholders often use different language. For example, researchers, financiers, and policymakers each use distinct terminology. This can hinder collaboration and limit the benefits of cross-sector knowledge sharing and interdisciplinarity. The use of technical jargon and sector-specific vocabulary can alienate local communities, who are crucial stakeholders for ensuring the success of NbS projects. Their potential alienation presents a  significant risk to the success of NbS projects,  undermining investors’ confidence in their investments as these barriers add an additional element of uncertainty. Effective communication addresses these concerns proactively by identifying and understanding the intended audience, defining jargon, and clarifying misconceptions.

Data and its interpretations should be clear, transparent, and accessible to all contributors and stakeholders affected by its insights, which includes investors as well as members of the communities where NbS are implemented. These stakeholders often lack the scientific expertise to analyse these data themselves. Although NbS practitioners should strive to report their impact in a way that resonates with potential investors, this should not come at the expense of alienating local partners. Balancing data communication to engage corporate, policy, and finance sectors, without creating barriers with local communities, is challenging but necessary to increase stakeholder buy-in. Effective data communication builds trust and credibility, which are essential for attracting long-term private finance to NbS projects. 

It is also crucial to consider the importance of communication style in maintaining stakeholder engagement. For instance, when discussing anthropogenic ecosystem change, the same information can be framed negatively, as an assessment of ecosystem degradation, or positively, as a measure of ecosystem integrity. The chosen style and approach can influence stakeholder engagement without compromising the core content. A positive tone can inspire collaboration, while a negative tone may cause divisiveness and disengagement. The way in which a project is communicated can generate interest, support, and momentum for scaling private finance in this sector. Clear, jargon-free communication positions NbS projects to demonstrate their impact more effectively on biodiversity, climate change mitigation, and sustainable development.

Conclusion

Nature-based solutions are a pivotal approach to address the climate crisis, enhance biodiversity, and ensure food security amidst growing socio-environmental challenges. Key to scaling these solutions, alongside public funding and mission-driven policy, is the strategic mobilization of private finance underpinned by three critical enablers: innovative data collection through geospatial approaches and access to it, cultivating strong and transformative partnerships, and effective stakeholder communication. These enablers reinforce each other, helping to build a strong case to mobilize private investment for NbS project developers. By advancing in these areas, we can improve the accountability, scalability, and impact of NbS, ensuring they play a central role in our sustainable future. Embracing these strategies will not only foster environmental resilience but also pave the way for a collaborative, informed, and inclusive approach to tackling some of the most pressing issues of our time.