To explore these questions, we spoke with Mareike Hussels, Product Development Manager at Triodos Investment Management. Mareike discusses the urgency of nature-based solutions, the role of finance and necessary systemic reforms. This conversation highlights the future of nature-positive investments, including blended finance models and community engagement.
Let’s kick things off by defining nature-based solutions. How do they differ from other approaches?
“Nature-based solutions, or NbS for short, are all about harnessing the power of nature to tackle societal challenges like climate resilience, food security and water management while also offering economic benefits.”
“Alternatives to NbS are technology-based approaches. For example, to remove CO₂ from the atmosphere, you can use trees or machines. Both are important to keep global warming within safe limits. The technology-based removal has the advantage of permanently storing carbon, for example in rock formations, while carbon stored in trees or soil always carries the risk of being released again in the short to medium term. At present, technologies for carbon removal remain very expensive and cannot be applied at scale yet. Once costs have come down, they will play an important role in permanent carbon storage."
“Why I am personally more excited about NbS is that nature has undergone millions of years of evolution, and I don’t believe we can surpass that with a technology fix. I also think the climate crisis cannot be solved with linear thinking. The holistic nature of NbS, which deliver climate and biodiversity and community benefits, addresses the complexity of the challenge much better.”
Why should we prioritise investing in NbS?
“NbS are a crucial way to tackle the pressing challenges of climate change and biodiversity loss. Did you know that more than 50% of global GDP depends on what nature provides? That means that when we harm the environment, we face not only ecological problems but also serious economic risks. By putting our money into NbS, we can address these risks while creating real economic and social value. Projects like reforestation, wetland restoration and developing urban green spaces help restore ecosystems while boosting resilience and providing sustainable benefits to our communities and industries.”
So, protecting natural ecosystems really matters for the economy?
“Absolutely! We rely on ecosystems for basics like food, water and clean air. When these ecosystems get damaged, it puts many industries at risk. By investing in NbS, we also invest in the long-term productive capacity of land and society. This way, we can reduce long-term risks and open up exciting new opportunities.”
Given the urgency, do you see international recognition for this?
“Definitely! A key milestone is the ambitious Kunming-Montreal Global Biodiversity Framework, adopted in December 2022. It aims to conserve 30% of the planet’s land and marine ecosystems by 2030, which means we need to invest an astounding USD 200 billion each year to protect biodiversity. The good news is that the financing mechanism for these substantial amounts – always a big bone of contention in international negotiations - was agreed upon earlier this year. Additionally, the Kunming Framework calls for redirecting USD 500 billion of harmful subsidies. While subsidy reform is never easy, it presents a way to reduce negative impact and free up funding for positive impact at the same time.”
Who’s involved in making NbS happen?
“It truly takes an entire ecosystem to make it work. First and foremost, the local communities living in or around the project area are central to the success of any NbS project. Indigenous communities, in particular, possess deep knowledge and connection to the local ecosystem. To turn an idea into a project, project developers are needed to design and carry out NbS projects. For example, Triodos has financed Treevive, which supports early-stage forestry carbon projects in the tropics. There are standard setters who create quality benchmarks and certifications to ensure everything remains on track. Nature tech companies contribute geospatial information and measure ecosystem services. Carbon and ecosystem service platforms like Berlin-based Goodcarbon connect projects with buyers of carbon or biodiversity credits. Finally, technical assistance facilities equip stakeholders with the skills needed to manage and grow NbS effectively.”
Investing in nature-based solutions
What role does the financial sector play? How is Triodos Investment Management contributing?
“Triodos, at group level, has set an ambitious goal to mobilise EUR 500 million for NbS by 2030. Triodos Investment Management plays a crucial role in this mission, because as a fund manager, we have more flexibility than a bank to develop targeted financial vehicles for NbS. We are exploring several options, including two dedicated NbS funds - one focusing on Africa, India and Latin America and the other on Europe and North America. The plan is to invest in sustainable forestry, nature restoration and regenerative agriculture.”
“While initially NbS financing often requires public sector support, private investment is vital to scaling the sector. Public funds alone cannot meet the USD 200 billion annual funding requirement. This is where blended-finance models and public-private partnerships come into play - they help reduce risks for private investors and provide the initial support to build a track record. We have already witnessed an unprecedented level of private sector investment in NbS through carbon credits. Moving forward, it is essential that market-based solutions prioritise ecological integrity and community benefits to ensure truly sustainable outcomes.”
What makes you excited about being active in this sector?
“In the past, investing in nature was primarily a public sector task. Through the carbon market and other ecosystem service payments, a mechanism has emerged for the private sector to invest in nature at scale. That’s a first! And very important to reach the amounts and implementation discipline needed to make a real difference towards a greener and healthier planet.”