To learn more about sustainable finance, watch our explainer video on Landscape TV.
Whether you’re an expert in sustainable finance or completely new to the field, it can take a lot of work to stay on top of the fast-moving trends of this ever-changing arena. We’ve put together a list of the latest research and trends in sustainable finance to keep you in the loop and up to date. But first, what exactly is it?
What is sustainable finance?
Sustainable finance is a broad term and is often used interchangeably with green finance, despite the latter being narrower in scope. It refers to making investment decisions that consider not only financial returns but also environmental, social, and governance factors.
Financing green or greening finance?
As the World Bank defines it, financing green is the financing of projects that contribute – or intend to contribute – to the conservation, restoration, and sustainable use of biodiversity and ecosystem services. Meanwhile, greening finance is centered on directing financial flows away from projects with a negative impact on biodiversity and ecosystems, and towards those that mitigate such impacts – or pursue positive environmental impacts as a co-benefit.
These approaches are complementary, and together they offer an important opportunity for increased efforts to achieve ecosystem restoration objectives and zero-deforestation value chains – while delivering the mitigation and adaptation benefits our planet requires.
Moving ahead on financing green: it’s time to act – fast!
On 7 March, the 6th GLF Investment Case Symposium, GLF–Luxembourg Finance for Nature 2023: What comes next?, will bring together financiers, project developers, investors, and changemakers to present opportunities for greener investment in 2023.
The conference will showcase success stories of existing and innovative financial mechanisms, investable community-led business models, and successful climate investments that are paving the way to a greener and more equitable world. It will connect local project developers, especially in the Global South, with investors, and highlight how barriers are being removed to catalyze private sector investment in community-led and nature-based projects.
What are the latest trends in sustainable finance?
Champions across the globe are leading initiatives for sustainable land use investments in the Global South. The following publications feature examples of how to catalyze private sector investments in local nature-based solutions and green commodity value chains.
The State of Finance of Nature tracks global trends in public and private investment in nature-based solutions, aiming to improve data quality and identify opportunities for governments, businesses, and financiers.
This report is the second in a series that aims to inform public and private actors about progress against key targets and the extent to which finance flows are aligned with global targets and the investment needed to limit global warming to below 1.5 or 2°C, halt biodiversity loss and achieve land degradation neutrality. It also provides high-level recommendations on how to scale up financial flows to NbS and improve alignment with nature-positive outcomes.
Publisher: World Bank
Topics: investment in restoration, finance gap, policy, financial regulations
The UN Decade Finance Task Force (FTF), chaired by the World Bank, aims to catalyze action which can contribute to unlocking the capital needed to meet the Decade’s goals.
This report is the first in a series of outputs of the FTF and provides an overview of the current challenges to and opportunities for increasing public and private investment in restoration.
It looks at innovative approaches to financing restoration activities taken by actors in the public, private, or non-profit sectors and the potential for these to be replicated or scaled. The report also lays out a draft roadmap of actions the FTF will take to overcome challenges and contribute to scaling investment in restoration.
3. Closing the nature finance gap: practical solutions to mobilize private investment for landscape restoration
Format: White paper
Publisher: Restoration Seed Capital Facility (RSCF)
Topics: investment for landscape restoration, access to public finance, policy, standards
Supported by the governments of Germany and Luxembourg and implemented by the UN Environment Programme and the Frankfurt School of Finance and Management, RSCF aims to unlock private finance for activities that contribute to forest and landscape restoration in Latin America, Africa, and Southeast Asia.
This white paper summarizes the key messages of the session Unlocking Private Finance for Landscape Restoration: Practical Solutions to Mobilize Investment to be presented at the 6th Global Landscapes Forum Investment Case Symposium.
The publication showcases two case studies in which RSCF is supporting the development of practical finance solutions to bridge the gap between investors and local nature-based solutions (NbS) in the Global South.
Publisher: International Union for Conservation of Nature (IUCN)
Keywords: net zero, investments in landscape, agrifood supply chains
There is a compelling business case for companies to align with net-zero and nature-positive targets. For agribusinesses, guaranteeing sustainable production throughout the supply chain should be a high priority. As weather events become more frequent and extreme, and land degradation increases globally, agribusinesses are at risk of experiencing decreased yields and reduced revenues as these shocks cause issues throughout supply chains.
The aim of this guide is to help agribusinesses make better investments in landscape restoration so they are better able to sustain agrifood supply chains, reduce risks, raise resilience, and enhance returns.
Publisher: Tropenbos International
Topics: sustainable finance, inclusive finance, resilient landscape, integrated landscape management, landscape finance assessment framework
Access to finance is a key element of sustainable and inclusive landscapes. This infographic summarizes the main findings from the study Access to Landscape Finance for Small-Scale Producers and Local Communities: A Literature Review which identifies the factors that contribute to or hinder inclusive financing for micro/small/medium-sized enterprises and projects across sectors in ways that collectively contribute to more sustainable landscapes in the tropics.
We hope you found these resources helpful. If you’d like to learn more, please consider joining us at GLF–Luxembourg Finance for Nature 2023.
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