It is a long time ago when climate change was stated, besides its relationships with already experienced nature disasters and the estimation of more to come. That change was related to the greenhouse gases (GHG) accumulated in the atmosphere being the consequence of human activity. Then there was an indication to reduce the GHG emissions (decarbonization) what prompted many organizations and firms to establish the objective of net-zero emissions in certain future point of time. The mandate is to decarbonize the economy and the entire life – of course without losing the needed economic growth. For example, the firms are asked to do that in their own operations and that of their suppliers and customers. The emissions that cannot be eliminated have to be “compensated”.
In parallel, more recently the world realized that the deterioration of nature is quicker than apparent. That prompted a claim to measure and take care of the environmental footprint of all players.
Both issues encouraged institutions and firms to act to reconcile our activity with the conservation of nature. In this point is useful a definition of sustainability: to use natural resources in a way that does not jeopardize the use of future generations. The institutions act in different ways, for example, one is the carrot of the green bonds (reducing the borrowing cost of “green” companies), and another is the stick (to oblige to pay for the emissions in compulsory carbon-allowances official markets). Other measures are the more-or-less voluntary fixing of net-zero emissions in certain future, and the requirement of environmental disclosure in the firm’s reporting.
Almost all prescriptions have a financial side, as a requirement to accede to lower-cost financing (or financing at all), to change operations and the supply chain to decarbonize, to invest in environmentally friendly financial instruments, to invest in net-zero pledges, to repair the damages or invest philanthropically or to fulfill the ESG statements.
This blog will focus on nature-based-solutions and the contribution to their financing. Including the sequestration of CO2 in forest, agriculture and water deposits, and all the actions to restore, conserve or improve nature (usually represented with the proxy of “biodiversity”). There are many statements in that direction by public and private institutions but also the opinion that we lack enough money to achieve the objectives – and that shortfall is even bigger in developing countries.