The State of Finance for Nature in the G20 report attempts to capture the complete amount and future need for G20 country spending on nature-based solutions assets and activities. It reveals that current G20 investments in nature-based solutions are insufficient, at USD 120 billion/year, and G20 Official Development Assistance and private sector investments are small when compared with domestic government spending.

The report calls for G20 countries to scale-up annual nature-based solutions spending to USD 285 billion by 2050 to tackle the inter-related nature, climate, and land degradation crises on which much of our economies are dependent, and provides recommendations to align development and economic recovery with nature goals through setting quantifiable monetary objectives, governance and policy options, and devices to facilitate systemic changes to meet this investment gap.

The analysis is led by the UN Environment Programme (UNEP), the World Economic Forum (WEF), and the Economics of Land Degradation (ELD) Initiative hosted by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) in collaboration with Vivid Economics. It builds on the global report ‘State of Finance for Nature – Tripling Investments in Nature-Based Solutions by 2030’ released in 2021, which calls for closing a USD 4.1 trillion financing gap in nature-based solutions.

The UN Environment Programme (UNEP) released a report on the ‘state of finance for nature,’ finding an investment gap of USD 165 billion per year from G20 countries for nature-based solutions, in order to meet currently agreed global targets by 2050. The biodiversity and climate finance gaps are emphasized in the draft post-2020 global biodiversity framework and the 2021 Glasgow Climate Pact.

Nature-based solutions (NbS) refers to a range of actions that rely on investing in nature to resolve societal challenges. NbS can include, for example: improving carbon sequestration on agricultural lands and peatlands; restoring mangroves to defend against flooding; and protecting global biodiversity through forest and other land conservation.

Released on 26 January 2022, the report titled ‘The State of Finance for Nature in the G20 Leading by example to close the investment gap’ was led by UNEP, the World Economic Forum, and the Economics of Land Degradation (ELD) Initiative. The authors write that in the context of the latest findings from the Intergovernmental Panel on Climate Change (IPCC) and the 2021 UN Food Systems Summit, the role of investment in NbS “is clear: it tackles these interlinked crises.”

At the upcoming 15th meeting of the Conference of the Parties (COP 15) to the Convention on Biological Diversity (CBD), governments are expected to adopt a post-2020 global biodiversity framework, containing several targets. As currently drafted, Target 19 calls to “increase financial resources from all sources to at least US$200 billion per year … to meet the needs for implementation, commensurate with the ambition of the goals and targets of the framework.” At the Glasgow Climate Change Conference (UNFCCC COP 26) in November 2021, governments adopted the Glasgow Climate Pact. It notes the need to significantly increase support for developing country Parties, “beyond USD 100 billion per year.”

To meet all agreed targets on biodiversity, climate, and land restoration by 2050, annual investment from G20 countries in nature-based solutions needs to increase by at least 140% – or an additional USD 165 billion per year. The authors suggest that this amount should be divided among four categories of nature-based solutions: forestry, silvopasture, mangrove restoration, and peatland restoration.

The report also finds:

The business and investment case for nature needs to be made stronger.
G20 countries should seize opportunities to increase investment in non-G20 countries, which can often be more cost-effective and efficient than investing in similar nature-based solutions internally. For example, “the average cost of converting land from other uses to nature-based solutions in G20 countries is USD 2.600/hectare, while the same costs only USD 2,100/hectare for non-G20 regions,” according to Nina Bisom, ELD; and
Developed countries should tie “nature and climate conditions” to fiscal stimulus measures.

A previous ‘State of Finance for Nature’ report was released in 2021, and focused on tripling investments in nature-based solutions by 2030. That publication identified a USD 4.1 trillion financing gap in nature based solutions between 2020 and 2050.