There is a growing interest in the finance and investment community to understand nature better – both as an opportunity for investment and as a way to manage current and future investment risks. The rapid emergence of numerous taxonomies, frameworks and initiatives on the topic is a testament to this.
There is also a growing interest in the Valuing Nature Network to learn more about finance and investment. Given the scale of the challenges from climate change, continued degradation of the natural environment and loss of biological diversity, it is more important now than ever that private investment is also used to mitigate and adapt to climate change, conserve natural resources, and protect, restore and enhance biodiversity. Making the ‘business case’ for these so-called ‘green investments’ and making sure they pay off for all concerned is a major challenge.
To begin engaging in this area, we need to be clear what ‘green’ finance / investment means; where it sits within the wider finance and investment sector; how to define and measure the environmental (and related social) impacts of it and any associated returns. We also need to improve our understanding of how investors assess whether a project is investable.
This paper is the result of a collaboration of environmental and finance professionals and is intended to be a first port of call for finance related terms, key players and links to further reading and initiatives.
If you have any comments on this topic, please email Demystifying@valuing-nature.net.