The report explores the critical ecological concepts, financial opportunities, and associated risks essential for achieving a nature-positive future. It emphasises that global biodiversity decline necessitates new operating models in business and society. The concept of nature positive has gained international attention, with the goal of halting and reversing biodiversity loss by 2030.

Ecological concepts in the definition of nature positive

The report defines nature positive through four key ecological concepts: health, abundance, diversity, and resilience. Health refers to the quality or condition of ecosystems, while abundance measures the extent of species within ecosystems. Diversity covers species variation across different scales, and resilience indicates the capacity to recover from disturbances. These concepts are interrelated, and improvements in one often lead to positive changes in others.

Typology of financial instruments for nature positive

The report presents a typology of financial instruments with the potential to support nature positive outcomes. These include regulatory and fiscal policy pricing instruments, voluntary pricing instruments, environmental credit or permit markets, voluntary transfers, green finance through equity investments, and debt financing via loans and bonds.

Key examples include green bonds, sustainability-linked loans, and carbon offset markets. The report highlights that although these instruments are growing in prominence, they require careful governance and credible standards to avoid risks like greenwashing. For instance, Australia’s Emissions Reduction Fund supports carbon markets, while the Nature Repair Market is an emerging initiative for environmental improvements.

The report also details the challenges associated with these financial instruments, including the need for standardisation and reliable metrics, the risks of market failure, and the importance of aligning financial incentives with ecological outcomes.

Risks to achieving nature positive outcomes

Eight key risks are outlined, divided into environmental, financial, and social categories:

• Restoration failure due to environmental drivers: Unpredictable disturbances like droughts, fires, and floods may hinder restoration efforts, especially with the exacerbating effects of climate change.
• Ecological or technical infeasibility: Some projects may be unfeasible within organisational timelines or lack resilience, which challenges long-term ecological outcomes.
• Lack of scientific knowledge: Inadequate scientific understanding may result in poor project implementation, particularly in predicting ecosystem recovery and setting accurate biodiversity measures.
• Inadequate financing: Insufficient investment, especially for large-scale projects, can jeopardise the success of nature positive initiatives.
• High transaction and opportunity costs: Administrative, monitoring, and compliance costs may reduce the viability of financial instruments, particularly for smaller businesses.
• Measurement uncertainty: Challenges in developing reliable and accurate biodiversity metrics can undermine trust in nature positive efforts.
• Greenwashing risks: Lack of transparency and standardisation in reporting may lead to misleading claims and reputational risks.
• Social and institutional barriers: Misalignment between ecological goals and market-driven approaches can lead to ineffective outcomes.

Recommendations

The report suggests that organisations must prioritise the development of standardised biodiversity metrics and incorporate ecological science into financial decision-making. It also recommends that investors and businesses collaborate closely with ecologists to understand the complexities of ecological systems and to align their strategies with nature positive goals. Furthermore, the establishment of clear governance structures and transparent reporting mechanisms is essential to avoid greenwashing and to ensure the credibility of nature positive efforts.