Options for Considering Nature-positive Finance Tracking and Taxonomy

Abstract

Healthy and resilient ecosystems underpin our societies and economies. Collapse of just a few ecosystem services such pollination, timber from forests and food from marine fisheries, could result in a global GDP decline of USD 2.7 trillion annually by 2030. We are not investing sufficiently in nature, resulting in an estimated nature funding gap as high as US$800 billion per year. Redirecting financial flows towards nature-positive investments and activities is critical. Multilateral Development Banks (MDBs) play an instrumental role to support a nature-positive future, aligned with the forthcoming post-2020 Global Biodiversity Framework, the G7 Climate, Energy and Environment Ministers Communiqué of May 27th, 2022, and with the Joint Statement on Nature, People, and Planet endorsed by the 10 MDBs at COP27. This Statement included an intention to work towards a joint understanding of the term 'nature positive' in the context of operations and investments and a goal to develop tools and methodologies for tracking 'nature positive' investments across MDB portfolios. This technical note is a first step towards meeting this commitment. This work presents options for defining nature-positive finance, based on definitions and principles identified in a bibliographical review drawing on global expertise and developing frameworks and taxonomies. Acknowledging the variety of institutional and ecological contexts in which MDBs operate, the report offers a menu of options to screen nature-positive activities as well as a variety of approaches to determine the nature-positive contribution to investments. Finally, the report proposes principles for tracking and reporting on these investments.