Deep dive: Nature-based solutions & ecosystem restoration

Why It Matters

The UN Decade on Ecosystem Restoration (2021-2030) set an ambitious target of restoring one billion hectares of degraded land, yet halfway through the decade only about 5% of committed restoration projects have delivered verified ecological outcomes (UNEP, 2025). That gap between pledge and proof matters because nature-based solutions (NbS) underpin roughly 37% of the climate mitigation needed to hold warming below 2 °C by 2030 (Griscom et al., 2024). Forests, wetlands, mangroves and peatlands sequester an estimated 11.7 GtCO₂e annually when intact, but degradation and land-use change convert these sinks into sources. The financial stakes are equally stark: the global economy depends on ecosystem services valued at approximately $44 trillion per year, more than half of global GDP (World Economic Forum, 2025). Despite this, annual investment in nature-based solutions reached only $200 billion in 2025, leaving a $300 billion annual funding gap that must close before 2030 if restoration targets are to be met (UNEP State of Finance for Nature, 2025). For sustainability professionals, understanding which restoration approaches generate credible, measurable results and which amount to greenwashing is no longer optional; it is a fiduciary, regulatory and reputational imperative.

Key Concepts

Nature-based solutions defined. The International Union for Conservation of Nature (IUCN) defines NbS as actions to protect, sustainably manage and restore natural or modified ecosystems that address societal challenges effectively and adaptively, while simultaneously providing human well-being and biodiversity benefits. This umbrella spans ecosystem restoration, ecosystem-based adaptation, green infrastructure, natural climate solutions and payment-for-ecosystem-services schemes.

Restoration vs. rehabilitation vs. reclamation. Ecological restoration aims to return an ecosystem to its historical trajectory, including composition, structure and function. Rehabilitation focuses on recovering ecosystem productivity and services without necessarily returning to a reference state. Reclamation stabilises degraded land for new productive use. These distinctions matter because conflating them inflates reported restoration hectares without delivering biodiversity outcomes.

Additionality and permanence. Any NbS project that generates carbon credits or biodiversity units must demonstrate that the ecological gain would not have occurred without the intervention (additionality) and that the gain will persist for a defined duration (permanence). The Integrity Council for the Voluntary Carbon Market (ICVCM) Core Carbon Principles require at minimum a 40-year permanence commitment for nature-based credits, with buffer pools to cover reversal risk.

Payment-for-results models. Traditional grant-funded restoration pays for activities (seeds planted, fences built). Payment-for-results models tie disbursements to verified ecological outcomes such as species richness gains, canopy cover thresholds or verified carbon sequestration. The Green Climate Fund (GCF) has piloted results-based payments in 14 countries since 2023, disbursing $1.2 billion against verified deforestation reductions (GCF, 2025).

The funding gap. UNEP's State of Finance for Nature report (2025) estimates that $500 billion per year must flow to nature-based solutions by 2030 to meet global biodiversity, land degradation and climate targets simultaneously. Current flows stand at roughly $200 billion, with public finance accounting for 82% and private capital contributing only 18%. Closing the gap requires blended finance instruments, biodiversity credits and regulatory mandates that internalise the cost of nature loss.

What's Working

Large-scale mangrove restoration in Southeast Asia. Indonesia's Mangrove Restoration Agency has rehabilitated 630,000 hectares of degraded mangrove since 2021, making it the largest single-country mangrove programme globally (Indonesia Ministry of Environment, 2025). Verified outcomes from a subset of sites show 72% seedling survival rates and measurable increases in fish biomass, with carbon sequestration averaging 8.4 tCO₂e per hectare per year. The programme integrates community co-management and pays local groups per verified hectare of surviving mangrove, aligning incentives with outcomes.

Africa's Great Green Wall accelerates. After years of slow progress, the Great Green Wall Initiative reported 22 million hectares under restoration across the Sahel by 2025, supported by $19 billion in pledged financing (UNCCD, 2025). Senegal, Ethiopia and Niger have emerged as implementation leaders, combining agroforestry with farmer-managed natural regeneration (FMNR). In Niger, FMNR has restored over 5 million hectares with minimal cost ($20 per hectare) and demonstrated 20-year persistence, offering one of the highest benefit-to-cost ratios of any restoration approach.

Biodiversity credit markets gain traction. The Biodiversity Credit Alliance (BCA) launched a standardised framework in 2024 that has attracted pilot transactions in 12 countries. Corporates including Kering, Holcim and Nestlé have purchased biodiversity credits linked to verified habitat restoration in Colombia, Madagascar and Australia. While the market remains small, estimated at $150 million in 2025 transactions (BCA, 2025), it provides a demand signal that complements carbon credit revenues and incentivises holistic restoration over monoculture tree-planting.

Technology-enabled monitoring. Planet Labs now provides weekly 3-metre resolution imagery for over 90% of terrestrial restoration sites registered with major standards bodies. When combined with eDNA sampling and acoustic monitoring, project developers can demonstrate species recovery alongside carbon gains, addressing long-standing criticisms that NbS projects prioritise carbon metrics over biodiversity.

What's Not Working

Monoculture tree-planting masquerading as restoration. A 2025 analysis by the World Resources Institute found that 45% of corporate-funded tree-planting projects used fewer than three species, failing to meet even minimal ecological restoration criteria (WRI, 2025). Single-species plantations of eucalyptus or pine may sequester carbon in the short term but provide negligible habitat value, reduce water availability and carry high wildfire risk. These projects undermine public trust and expose corporate sponsors to greenwashing litigation, particularly under the EU Green Claims Directive that took effect in 2025.

Verification bottlenecks. Despite advances in remote sensing, ground-truthing remains expensive and inconsistent. Only 12% of projects registered under major NbS standards have undergone independent third-party verification of ecological outcomes beyond carbon (Verra, 2025). The average time from project registration to first verified credit issuance is 3.2 years, creating cash-flow challenges that deter smaller developers and community-led initiatives.

Permanence risk and reversal events. The 2024 and 2025 wildfire seasons destroyed an estimated 4.8 million hectares of land that had been under restoration or protection programmes in Canada, Brazil and Australia (Global Fire Emissions Database, 2025). Buffer pools in carbon registries were drawn down by 28%, raising questions about whether current risk-pooling mechanisms are adequate in a world of intensifying climate extremes.

Fragmented governance. Restoration pledges under the Bonn Challenge, the UN Decade, national biodiversity strategies and corporate net-zero plans often overlap, making it difficult to track aggregate progress and avoid double-counting. The lack of a unified global restoration registry means that the same hectare can appear in multiple national and corporate reports simultaneously.

Inequitable benefit-sharing. Indigenous Peoples and local communities steward an estimated 80% of the world's remaining biodiversity, yet they receive less than 1% of climate finance flows targeted at nature (Rainforest Foundation, 2025). Projects that fail to secure free, prior and informed consent or that capture carbon revenues without equitable benefit-sharing face growing legal, social and operational risks.

Key Players

Established Leaders

• IUCN — Sets the global NbS standard and maintains the IUCN Red List, providing the authoritative framework for restoration integrity assessment.
• World Resources Institute — Hosts the Global Restoration Initiative and publishes annual progress tracking for the Bonn Challenge and UN Decade targets.
• The Nature Conservancy — Operates restoration programmes across 79 countries with $1.6 billion in conservation assets under management.
• UNEP — Leads the UN Decade on Ecosystem Restoration and publishes the State of Finance for Nature report.

Emerging Startups

• Terraformation — Builds modular native-species seed banks and nurseries for tropical forest restoration at scale, with projects in Hawaii, Kenya and Indonesia.
• Dendra Systems — Deploys drone-based seed dispersal technology capable of planting 40,000 seed pods per day across degraded landscapes.
• Pivotal — Develops marine cloud brightening and reef restoration technology to protect coral ecosystems from thermal stress.
• Cultivo — Connects landowners with institutional investors for verified nature-based carbon and biodiversity credit projects across Latin America.

Key Investors & Funders

• Green Climate Fund — Has allocated $3.2 billion to NbS projects in developing countries since its inception, with $1.2 billion disbursed through results-based payments.
• Bezos Earth Fund — Committed $10 billion to climate and nature, with $1 billion specifically earmarked for landscape restoration.
• HSBC Asset Management — Launched a $1 billion Natural Capital strategy in 2025 investing in verified restoration and sustainable forestry projects.
• Mirova — Manages the Land Degradation Neutrality Fund ($208 million) focused on sustainable land management and restoration in emerging markets.

Sector-Specific KPI Benchmarks

Action Checklist

1. Audit current NbS commitments. Review all corporate restoration pledges and carbon credit purchases against the IUCN Global Standard for NbS and ICVCM Core Carbon Principles. Flag any monoculture or unverified projects for reassessment.
2. Require multi-species, ecosystem-appropriate restoration. Mandate that restoration partners use a minimum of five native species per site, with planting designs guided by local reference ecosystems.
3. Adopt payment-for-results contracts. Structure financing so that at least 50% of disbursements are tied to verified ecological milestones, not just activity completion.
4. Integrate technology-enabled MRV. Require remote-sensing baselines, annual satellite-verified canopy assessments and periodic eDNA or acoustic surveys to demonstrate biodiversity recovery alongside carbon gains.
5. Ensure equitable benefit-sharing. Allocate a minimum of 20% of project revenues to Indigenous Peoples and local communities and secure free, prior and informed consent before project inception.
6. Diversify revenue streams. Layer carbon credits, biodiversity credits and payments for ecosystem services (water filtration, flood regulation) to improve project bankability and reduce dependence on a single revenue source.
7. Engage with emerging regulatory frameworks. Prepare for the EU Deforestation Regulation, EU Green Claims Directive and TNFD reporting requirements by building traceable, verified NbS portfolios now.

FAQ

What distinguishes credible ecosystem restoration from greenwashing? Credible restoration uses native species appropriate to the local ecosystem, sets measurable biodiversity and carbon targets against a scientifically defined reference state, undergoes independent third-party verification, and shares benefits equitably with local communities. Greenwashing projects typically involve monoculture tree-planting, lack baseline ecological assessments, report only inputs (trees planted) rather than outcomes (species recovered, carbon verified), and provide no evidence of community consent or participation.

How large is the NbS funding gap and how can it be closed? UNEP (2025) estimates that $500 billion per year is needed for NbS by 2030, compared with roughly $200 billion currently invested. Closing the $300 billion gap requires scaling private capital from its current 18% share through blended finance vehicles, biodiversity credits, sovereign nature bonds and regulatory mandates that internalise the cost of ecosystem degradation. Public procurement policies and corporate supply-chain requirements can also create demand-side pull for verified restoration outcomes.

Are nature-based carbon credits still credible after recent integrity scandals? They can be when quality safeguards are in place. The ICVCM Core Carbon Principles, launched in 2023, set a floor for additionality, permanence and benefit-sharing. Projects that meet these standards, use digital MRV and carry adequate buffer pools for reversal risk continue to attract premium pricing. The key is to avoid legacy credits from projects with weak baselines and to insist on independent ratings from providers such as Sylvera or BeZero Carbon.

What role does farmer-managed natural regeneration play? FMNR is one of the most cost-effective restoration techniques, costing as little as $20 per hectare in the Sahel. It involves protecting and managing the regrowth of existing tree stumps and root systems rather than planting new seedlings. Niger has restored over 5 million hectares using FMNR with documented persistence over 20 years, making it a proven approach for drylands and degraded agricultural landscapes.

How does the Kunming-Montreal Global Biodiversity Framework affect NbS? The Framework's Target 2 commits countries to ensuring that 30% of degraded terrestrial, inland water, coastal and marine ecosystems are under effective restoration by 2030. National biodiversity strategies and action plans (NBSAPs) submitted in 2024 and 2025 increasingly embed NbS as a primary delivery mechanism, creating regulatory tailwinds for restoration finance and standards development.

Sources

• UNEP. (2025). State of Finance for Nature 2025: Closing the $300 Billion Annual Gap. United Nations Environment Programme.
• Griscom, B. et al. (2024). Updated Assessment of Natural Climate Solutions Mitigation Potential. Proceedings of the National Academy of Sciences, 121(4).
• World Economic Forum. (2025). Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy. WEF.
• UNCCD. (2025). Great Green Wall Progress Report: 22 Million Hectares Under Restoration. United Nations Convention to Combat Desertification.
• Indonesia Ministry of Environment and Forestry. (2025). National Mangrove Restoration Programme: Progress and Outcomes 2021-2025. Government of Indonesia.
• Green Climate Fund. (2025). Results-Based Payments for REDD+ and Ecosystem Restoration: Disbursement Report. GCF.
• World Resources Institute. (2025). Global Analysis of Corporate Tree-Planting Commitments: Species Diversity and Ecological Integrity. WRI.
• Biodiversity Credit Alliance. (2025). Biodiversity Credits: Market Status and Framework Update. BCA.
• Verra. (2025). State of Voluntary Carbon Markets: Nature-Based Solutions Verification Rates. Verra.
• Rainforest Foundation. (2025). Rights, Resources and Climate Finance: Indigenous Peoples' Share of Nature Funding. Rainforest Foundation.
• Global Fire Emissions Database. (2025). Annual Wildfire Impact on Restoration and Protected Areas. GFED.