Introduction

Climate change is now a daily reality for billions, with economic losses from climate-related disasters reaching $2.9 trillion between 1998 and 2017—a 251% increase on the previous 20-year period. Over the past three decades, the world has lost nearly 10% of its forests, while mangroves have shrunk from 15.3 million hectares in 1996 to 14.8 million in 2020. Nature-based solutions (NbS) offer a central strategy for climate-resilient development by protecting and restoring ecosystems to buffer against floods, storms, and heatwaves. Despite their potential, NbS remain underfunded, with current global finance flows at $200 billion a year—only one-third of what is required to meet 2030 climate goals. Furthermore, 82% of this funding comes from governments, while private sector investment in activities that harm nature is at least $5 trillion annually, which is almost 140 times greater than flows into nature-positive solutions.

Mobilising finance for nature-based solutions: public funds as catalysts for private investment

NbS are frequently undervalued in financial markets despite proven benefits. Ecosystem services like flood protection and carbon sequestration are rarely monetised, leading capital to favour sectors with clearer commercial returns like agriculture or forestry. In 2018, up to 80% of tracked international funding for NbS was grant-based, which is often insufficient to cover long-term operational costs. Public finance must play a catalytic role by deploying concessional loans, guarantees, and first-loss capital to reduce investment risk and unlock private capital. Blended finance structures allow private investors to achieve market-rate returns while sharing risks with public entities. Specialist investment managers and nature funds, such as the &Green Fund and Aqua-Spark, demonstrate how de-risking structures can attract private investment into sustainable commodity supply chains and aquaculture.

From pilots to systems: quantifying and scaling adaptation benefits of NbS

Moving NbS from sporadic use to a systematic strategy requires embedding standardised methodologies like climate-risk stress tests and cost-benefit frameworks into project preparation. Evidence from the Global Center on Adaptation (GCA) shows that adaptation solutions can deliver strong financial returns. In São Tomé, integrating NbS into a road renovation project cut projected climate damages by over a third, with benefit-cost ratios (BCRs) between 2:1 and 5:1. In Mozambique, vegetation management for transmission lines showed BCRs up to 4:1. Analysis across Africa suggests that well-targeted investments of $3.6 billion in mangrove restoration and reforestation could generate $7.6 billion in avoided losses by 2100. Strategically applying NbS at catchment or corridor levels multiplies resilience dividends across sectors; for instance, catchment-level interventions in Uganda can reduce runoff by up to 50%, protecting regional trade and local communities.

Enabling environments and innovative instruments: exploring carbon finance for resilient transport infrastructure

Carbon markets offer an innovative financing pathway to support the implementation and long-term maintenance of NbS. Railways are particularly well-suited for this as they control extensive rights-of-way. Restoring these corridors with vegetation can strengthen infrastructure resilience while generating carbon credits. In semi-arid African landscapes, agroforestry can sequester 3–5 tCO2 per hectare annually, while reforestation can reach 5–10 tCO2. A GCA study on Tanzania’s Central Line identified 338 hectares suitable for NbS, which could capture 33,820 tonnes of CO2 over 20 years. At a price of $15 per tonne, this could yield significant revenue to fund maintenance. Scaling this approach across Tanzania’s entire railway network could yield $20 million in cumulative revenues and benefit over one million people. Success requires robust governance, clear carbon rights, and monitoring, reporting, and verification (MRV) systems to ensure credit integrity.

Call for action

The report outlines 11 key takeaways to scale NbS. This includes prioritising public-private coordination to create multiplier effects and using strategic public risk-taking to make projects bankable for commercial investors. Governments and development finance institutions should transition from grants to risk-sharing instruments like subordinated debt and partial credit guarantees. It is essential to systematise NbS valuation for financeable evidence and to build national pipelines of investable projects. Strengthening the enabling environment requires standardising measurement frameworks, embedding local ownership, and integrating NbS into national and sectoral planning. By advancing these actions, stakeholders can move NbS from fragmented pilots to mainstream adaptation strategies that deliver measurable resilience and support sustainable development across vulnerable regions.