The economic case for investing in NbS solutions is unassailable, and market returns are available for savvy investors
Current Funding Levels
According to UNEP’s State of Finance for Nature 2026, approximately US$220 billion per year flowed into NbS in 2023 — a 65% increase from the $133 billion baseline in 2020, but still far below what is needed. Public funds account for roughly 90 percent of this total, with private finance contributing just US$23 billion (approximately 10 percent) — a ratio that has actually deteriorated since 2020, when private finance represented 14 percent.
This stands in stark contrast to climate solution investment broadly, where most capital comes from the private sector. UNEP estimates that NbS investment must increase 2.5 times, to US$571 billion annually by 2030, to meet global biodiversity, climate, and land restoration targets — equivalent to just 0.5 percent of global GDP. Yet for every dollar currently invested in protecting or restoring nature, thirty dollars are spent on activities that degrade it, with nature-negative finance flows reaching US$7.3 trillion in 2023. Environmentally harmful subsidies alone surged 55 percent to US$1.7 trillion.
The targets of private sector financing are varied, with most going towards sustainable supply chains, biodiversity offsets, and equity impact investing.
Source: State of Finance for Nature 2026, UNEP)
Under investment and the tragedy of the commons
Despite their inherent value, nature-based resources remain systematically underpriced by current economic systems — a failure of both markets and institutions. This results in chronic under financing.
The Kunming-Montreal Global Biodiversity Framework (GBF) in December 2022 identified a biodiversity finance gap of US$700 billion per year to be progressively closed by 2030. To address it, the GBF set concrete targets: mobilize at least US$200 billion per year from all sources by 2030, raise international biodiversity finance from developed to developing countries to at least US$30 billion per year by 2030, and eliminate or reform at least US$500 billion per year in subsidies harmful to biodiversity. Yet the latest data shows the gap remains enormous.
Current finance flows to NbS, nature-negative finance and investment needs (Source: State of Finance for Nature 2026, UNEP)
Carbon markets and credit quality
Carbon markets are the most developed monetization pathway — but not all credits are created equal. The voluntary carbon market (VCM) is undergoing a profound quality-over-quantity transformation. After peaking in 2021, transaction volumes fell by approximately 25% in 2024, but underlying demand remains resilient: some 182 million tonnes of credits were retired that year. What has changed is what buyers will pay for. According to Calyx Global and ClearBlue Markets, high-integrity “Tier 1” credits now command a 65% price premium over low-quality credits — and for NbS specifically, the divergence is even sharper. Tier 1 nature-based credits have traded above US$30 per tonne from January 2025, while low-rated NbS credits (particularly legacy REDD+ projects criticized for overestimating carbon absorption) have fallen below US$3 per tonne. Sylvera’s independent ratings data shows that BBB+ rated afforestation, reforestation and revegetation (ARR) projects command median prices above US$35, while lower-rated equivalents trade below US$20 — a widening spread.
What does the future hold for private investment in NbS?
Investors are already generating market returns from NbS — and the landscape is maturing fast. Dedicated natural capital fund managers are demonstrating the commercial case at scale. For instance, Climate Asset Management (a joint venture of HSBC Asset Management and Pollination) has raised over US$1 billion for its natural capital funds, building investable pipelines spanning sustainable forestry, regenerative agriculture and coastal restoration across Europe, Africa and Latin America. It is a founding member of the Natural Capital Investment Alliance, whose members have pledged to mobilize at least US$10 billion into what they characterize as a distinct asset class.
Revenue generation increasingly depends on "stacking" — combining multiple income streams from the same project: carbon credits, premium pricing for sustainably produced commodities (certified timber, regenerative cocoa, agroforestry coffee), payments for ecosystem services such as watershed protection, avoided-damage insurance valuations and, increasingly, biodiversity credits.
(Source: Capital for Climate)
Regulatory convergence points to further market demand
The line between voluntary and mandatory markets is also blurring — a development with major implications for NbS. For instance, CORSIA (the Carbon Offsetting and Reduction Scheme for International Aviation) becomes mandatory for all international flights from 2027, creating a major new compliance demand channel for high-integrity NbS credits.
Article 6 of the Paris Agreement, finalized at COP29 in November 2024, established the rules for countries and companies to generate, authorize and trade carbon credits internationally. The EU’s Carbon Removal Certification Framework (CRCF) and the UK’s planned integration of durable removals into emissions trading systems will further drive convergence.
Analysts at Sylvera note that these developments mean corporate strategies can no longer treat voluntary and compliance markets as separate universes. Credit demand could reach one billion credits by 2030, with a potential market value of US$735 billion — turning nature-based carbon into a major asset class in its own right.
As the market matures, the quality of the offsets should improve. On the demand side, there is increasing awareness that the entities (usually in hard to abate sectors) must use the offsets as a temporary measure and be committed to a plan to significantly reduce their emissions. On the supply side, there are more efforts to ensure that offsets are in fact reducing net emissions, are not engaged in double counting, and are benefiting local communities and biomes.
Capital for Climate exists to solve NbS Investment Challenges
The barriers to investing in nature — fragmented deal flow, opaque pipelines, unfamiliar risk-return profiles, complex revenue stacking, and the sheer difficulty of finding and diligencing high-quality opportunities — are real, but they are infrastructure problems, not fundamental ones. C4C has built the market infrastructure this asset class has lacked: a curated global pipeline of over US$40 billion in NbS opportunities across 1,200+ projects and funds. Through its Brazil NbS Investment Collaborative alone, C4C has already catalyzed over US$250 million in completed transactions and mobilized US$10.4 billion in strategic investment intent from 34 institutional investors ahead of COP30.
The NbS investment landscape is maturing fast — deal sizes have grown from US$10 million to US$100 million+ in just two years, carbon credit integrity frameworks are separating high-value opportunities from low-quality legacy projects, and voluntary and compliance markets are converging to create unprecedented demand. The question for investors is no longer whether nature is investable, but whether they have the platform, pipeline and peer network to invest well. That is what Capital for Climate provides.
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