Climate change and the loss of biodiversity are people’s biggest concerns globally (UNESCO, 2020). Communities and businesses in developing countries are most vulnerable to these twin threats. In fact, collapsing ecosystems are a growing phenomenon. But there is a big funding gap to combat climate change and biodiversity in vulnerable regions. Bankable projects are part of the solution to preserve precious ecosystems and address climate change.
The capital needed to preserve and restore ecosystems is estimated between US$300 billion to US$400 billion annually. Currently, only US$52 billion is being invested in projects.
Increasingly, private investors recognise that they should invest in combating climate change and biodiversity loss, but they struggle to find projects that meet their requirements. So there is a huge opportunity to create investment cases for nature-based solutions and innovations in sectors, such as agrifood, landscape regeneration, forest protection and sustainable forest management that benefit the ecosystem and the communities living there. Projects that create economic return out of such initiatives, we consider Bankable Nature Solutions.
Bankable Nature Solutions generate financial returns for investors and communities alongside a positive impact on nature, people and climate by increasing climate resilience through adaptation and/or mitigation and reducing pressure on ecosystems and biodiversity.
Key characteristics to be bankable:
- Cash flow generating-activities Sufficient collateral
- A high probability of succes
- A clear exit strategy
- An acceptable risk-adjusted rate of return
- A proof of concept and proven track record
Many small and medium-sized businesses in developing countries, however, struggle to meet investors’ requirements because they lack access to skills and knowledge (product, sector, technical, business, financial, customer, markets), quality resources (trained staff, equipment, materials etc.), local and international networks (distributors, customers, investors). On top of that, there are
risks related to the weather and the climate. In agriculture, supply and demand are still highly fragmented, the supply chain insufficiently interlinked and the products are perishable.
Mobilising More for Climate serves as a flywheel for sustainable landscape conservation and development in which all land users in the ecosystem benefit, from farmers to businesses and communities. [DS1] MoMo4C’s main objective is to develop thriving ‘economic green zones’ that benefit everyone.
To achieve this, we have a three-pronged approach:
Landscapes as economic green zone
Landscapes can be considered a type of ‘economic green zone’ where clusters of different sustainable investments can be developed. This offers potential synergies among investments and sufficient scale of investment. To achieve this you need landscape partnerships of local businesses, farmers, civil organizations, communities and government agencies. They can enable the collective action needed to address the shared challenges of climate change, biodiversity loss, social inequality, poor governance and lack of investment.
 Also see the 2020 WWF report on Bankable Nature Solutions: https://wwfint.awsassets.panda.org/downloads/bankable_nature_solutions_2__1.pdf