The landscape for nature-based solutions is witnessing a surge in demand and scale, drawing the attention of prominent institutional investment managers, according to a recent academic paper from the University of Oxford's Environmental Change Institute. The paper highlights ‘clear signs of change’, indicating fresh opportunities in the market while underscoring the imperative for increased regulation.
Young seedlings in a tree nursery in Kenya, Hongera Reforestation Project, DGB.
Despite positive indicators, the report, authored by Dorian van Raalte and Nicola Ranger, stresses the urgent need for more significant investments to address the staggering biodiversity financing gap. Last year's global funding with a positive impact amounted to a mere $200 billion, a fraction compared to the $7 trillion dedicated to harmful practices, as reported by the UN Environment Programme at COP28.
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The study delves into the emergence of a new generation of investment managers and strategies specialising in nature-positive investing. While these specialists may be modest in size, they possess the potential for outsized impact through innovative transactions and contributions to collective knowledge.
Examining 25 specialist nature-focused funds, the report notes industry evolution, including larger investors acquiring existing strategies. Examples include Lombard Odier's HolistiQ platform and Generations Investment Management’s Nature Strategy. The report highlights signs of optimism, such as growing investor demand and mainstream asset managers entering the market.
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However, the assessed funds, utilising a mix of financial instruments, face challenges in scaling, often underperforming initial fundraising targets. The report advocates for public sector involvement to achieve the necessary scale.
The study identifies key players successfully accessing commercial private capital, emphasising the critical role of specialised investment managers and funds in linking projects to global capital.
In our commitment to crafting and executing extensive nature-focused solutions, DGB Group believes in the pivotal role of nature-based credits in realising a net-zero future while safeguarding our invaluable ecosystems. By tapping into the potential of nature, we have the opportunity to create approaches that not only tackle nature conservation but also champion the restoration of biodiversity. Through our premium nature-based credits generated by our nature-based projects, we aim to establish a symbiotic equilibrium between human advancement and responsible environmental management, paving the way for a sustainable and flourishing planet. Join us on this transformative journey, embracing nature-based solutions as a foundational element of our environmental strategies.
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