Finance Research Theme

About

As we develop scenarios and pathways for nature recovery, how can they be sufficiently resourced? Providing sufficient financial resources and prioritisation is among the greatest challenges facing nature recovery. The challenge of obtaining capital investment from funders and investors to projects and programmes that deliver measurable nature recovery outcomes at the scale and pace required, and yet also incorporate adequate consideration of social safeguards, is far from being solved. At the same time, allocating monetary values to nature and profiting from nature can raise philosophical, cultural and moral questions.

We will draw on our expertise in finance to systematically conceptualise, pilot, assess, and then scale a flexible architecture for funding nature recovery outcomes. Critically, this architecture will be designed to be financeable, investable, and insurable. We will work closely with finance researchers and practitioners to understand the requirements of financial institutions so that capital can be mobilised to enhance nature recovery at the scale and pace required.

Complementary projects

In addition to our core work, we will also undertake three complementary projects that will draw on expertise and work being undertaken in the other themes, particularly in Scale and Integration. These include:

• Reducing information asymmetries – we will design and pilot technologies and tools that are able to reduce information asymmetries between providers of capital seeking investment opportunities and nature recovery projects and programmes. Originating investable projects and programmes efficiently is a major impediment to scaling nature recovery financing at scale.
• Optimising public and philanthropic funding – we will develop approaches for assessing how to optimise the use of public and philanthropic funding to leverage private funding and finance into nature recovery. The effective optimisation of finite public and philanthropic funds will allow these resources to go further across different sub-national, national, and regional scales.
• Nature recovery-linked finance – we will create metrics that could underpin new sustainability-linked loans and bonds for nature recovery. Sustainability-linked instruments are new and experiencing rapid growth. Vital to their success are appropriately designed key performance indicators and incentive structures and we will design these for nature recovery outcomes, working with major financial institutions as we do so.