Explainer: Nature-based solutions & ecosystem restoration

Why It Matters

Nature-based solutions could deliver up to 37 percent of the cost-effective climate mitigation needed by 2030 to hold warming below 2 degrees Celsius, yet they received just $26 billion in annual finance flows in 2024, roughly 8 percent of the $154 billion that UNEP estimates is required each year through 2030 (UNEP, 2024). This financing gap persists even though NbS projects generate co-benefits that engineered alternatives rarely match: flood risk reduction valued at $50 billion per year globally, pollination services worth an estimated $235 billion annually, and livelihoods for more than 1.6 billion people who depend directly on forests (WWF, 2025). As the Kunming-Montreal Global Biodiversity Framework pushes nations to protect 30 percent of land and sea by 2030, and the UN Decade on Ecosystem Restoration enters its midpoint, NbS have moved from the margins of climate policy to a strategic pillar for both mitigation and adaptation. Sustainability professionals who understand the typologies, cost structures and integrity safeguards of nature-based approaches are better positioned to deploy capital where it delivers measurable climate, biodiversity and community outcomes.

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, simultaneously providing human well-being and biodiversity benefits (IUCN, 2024). This umbrella term encompasses ecosystem restoration, ecosystem-based adaptation, natural infrastructure and natural climate solutions. Unlike traditional conservation, NbS explicitly link ecological interventions to measurable societal outcomes such as carbon sequestration, disaster risk reduction and water security.

Natural climate solutions. A subset of NbS, natural climate solutions (NCS) focus on land-stewardship actions that increase carbon storage or reduce greenhouse gas emissions across forests, wetlands, grasslands and agricultural lands. Griscom et al. (2017) identified 20 NCS pathways with combined mitigation potential of 10 to 12 gigatonnes of CO2 equivalent per year by 2030, a figure that subsequent meta-analyses have largely confirmed. Reforestation, avoided deforestation and improved agricultural practices represent the largest individual pathways by volume.

Ecosystem restoration. The UN defines ecosystem restoration as the process of halting and reversing degradation, resulting in improved ecosystem services and recovered biodiversity. Restoration spans active interventions such as replanting native species, removing invasive organisms and re-wetting drained peatlands, as well as passive approaches like managed natural regeneration where land is simply protected and left to recover. Passive restoration often costs 80 to 90 percent less than active methods per hectare, although it requires longer time horizons and is unsuitable for severely degraded sites (Chazdon and Guariguata, 2016).

Additionality and permanence. Two concepts borrowed from carbon markets are central to NbS credibility. Additionality requires that the ecological outcome would not have occurred without the intervention and its associated finance. Permanence concerns whether sequestered carbon or restored habitat will endure beyond the project lifetime. Both dimensions need robust monitoring, legal safeguards and buffer mechanisms such as insurance pools or covenant protections.

Co-benefits and safeguards. High-integrity NbS generate co-benefits across biodiversity, water, livelihoods, food security and disaster resilience. International standards increasingly require that projects demonstrate free, prior and informed consent from Indigenous Peoples and local communities, equitable benefit-sharing and adaptive management plans. The IUCN Global Standard for NbS provides an eight-criteria framework to evaluate whether a project genuinely meets these conditions.

How It Works

Nature-based solutions operate across a continuum of ecosystem types and intervention intensities. The most common typologies include:

Forest-based NbS. Reforestation and afforestation add tree cover to degraded or non-forested land. Avoided deforestation and improved forest management protect existing carbon stocks. Agroforestry integrates trees into agricultural landscapes, delivering carbon sequestration alongside crop yields. The Trillion Trees initiative, a collaboration among WWF, BirdLife International and the Wildlife Conservation Society, has supported the restoration of 56 million hectares across 17 countries since 2020 (WCS, 2025).

Wetland and peatland restoration. Peatlands store roughly twice as much carbon as all the world's forests combined despite covering only 3 percent of the global land surface. When drained for agriculture, they release CO2 at rates of 5 to 20 tonnes per hectare per year. Re-wetting drained peatlands in the UK, Indonesia and the Baltic states is now a priority intervention. The UK government's Nature for Climate Peatland Grant Scheme allocated over 100 million pounds between 2021 and 2025, restoring more than 35,000 hectares of degraded peatland (Natural England, 2025).

Coastal and marine NbS. Mangrove forests, seagrass meadows and salt marshes, collectively known as blue carbon ecosystems, sequester carbon at rates 2 to 4 times higher per unit area than terrestrial forests. Apple invested $50 million through its Restore Fund to protect and restore mangrove forests in Colombia and Kenya, aiming to sequester 1 million tonnes of CO2 over 20 years (Apple, 2024). The Global Mangrove Alliance reports that mangrove loss has slowed by 25 percent since 2015, but restoration remains challenging because of competing coastal development pressures.

Urban green infrastructure. Nature-based solutions in cities include green roofs, permeable surfaces, urban forests and restored urban waterways. Singapore's Centre for Urban Greenery and Ecology estimates that its urban NbS programme reduces peak surface temperatures by 2 to 4 degrees Celsius and absorbs 7 percent of the city-state's annual rainfall runoff. Copenhagen's Cloudburst Management Plan channels $1.5 billion into green infrastructure to manage extreme rainfall, combining bio-swales, rain gardens and retention ponds with conventional drainage upgrades (City of Copenhagen, 2025).

Grassland and savanna management. Prescribed burns, rotational grazing and invasive species removal in grasslands can increase soil organic carbon by 0.5 to 1.5 tonnes per hectare per year. South Africa's Working for Ecosystems programme employs more than 5,000 community workers annually to remove invasive alien plants, restoring native fynbos and grassland habitats while providing employment in rural areas.

What's Working

Scaling public finance. Multilateral commitments to NbS have grown substantially. The Global Environment Facility allocated $1.7 billion to nature-positive projects in its eighth replenishment cycle (2022 to 2026), a 40 percent increase over the prior period (GEF, 2025). The Green Climate Fund approved $870 million for NbS projects in 2024 alone, including large-scale mangrove and forest landscape restoration programmes across sub-Saharan Africa and Southeast Asia.

Private sector participation. Corporate NbS investments reached $8 billion in 2025, up from $5.3 billion in 2023, according to the Nature Finance Monitor (NatureFinance, 2025). Nestlé committed $1.2 billion through 2030 to regenerative agriculture and forest restoration within its supply chains, targeting 14 million tonnes of cumulative CO2 reductions. Microsoft's Climate Innovation Fund has deployed $200 million into nature-based carbon removal projects since 2020, including partnerships with Pachama and Mombak to finance reforestation in the Brazilian Amazon.

Policy momentum. The EU Nature Restoration Law, adopted in 2024, requires member states to restore at least 20 percent of degraded land and sea areas by 2030. China's ecological redline policy protects 25 percent of its land area, supported by $15 billion per year in ecological compensation payments. Brazil reduced Amazon deforestation by 50 percent in 2024 compared to 2022 levels following strengthened enforcement and Indigenous territorial protections (INPE, 2025).

Evidence base maturing. Peer-reviewed studies now demonstrate the cost-effectiveness of NbS relative to grey infrastructure across multiple risk categories. The World Resources Institute found that mangrove restoration provides coastal flood protection at one-third the cost of sea walls, while urban forests deliver stormwater management benefits valued at $4 to $8 per tree per year in US cities (WRI, 2025).

What Isn't Working

Persistent financing gap. Despite increased commitments, total NbS finance flows still cover only 17 percent of estimated annual needs. Private capital remains concentrated in a small number of large projects and geographies, with 70 percent of corporate NbS spending directed at forests while wetlands, grasslands and marine ecosystems receive less than 15 percent combined (UNEP, 2024).

Measurement and verification challenges. Quantifying the carbon and biodiversity outcomes of NbS remains difficult. Baseline uncertainties, non-permanence risks and leakage effects complicate carbon accounting for nature-based projects. A 2025 analysis by Berkeley Carbon Trading Project found that 60 percent of forest carbon credits overestimated actual sequestration by an average of 30 percent, undermining market confidence.

Greenwashing risk. The absence of universally adopted standards allows low-quality projects to claim NbS status. Monoculture tree plantations marketed as reforestation, for example, may increase carbon stocks while reducing biodiversity and displacing communities. The IUCN Global Standard for NbS and the Taskforce on Nature-related Financial Disclosures (TNFD) framework are gaining adoption, but compliance remains voluntary and uneven.

Land tenure and community rights. Many high-potential restoration sites overlap with Indigenous territories. Where projects proceed without proper consent, they risk dispossession, conflict and ultimately reversal of gains. The Rights and Resources Initiative found that only 40 percent of NbS projects reviewed in 2024 met minimum standards for community engagement and benefit-sharing (RRI, 2025).

Time horizons and political cycles. Ecosystem restoration operates on decadal timescales that misalign with political and corporate reporting cycles. Peatland restoration can take 10 to 30 years to reach steady-state carbon sequestration rates. This mismatch creates incentives to favour fast-visible actions over scientifically optimal long-term approaches.

Key Players

Established Leaders

• The Nature Conservancy (TNC) — Largest environmental NGO by assets. Manages 50+ million hectares globally across forest, freshwater, ocean and grassland programmes.
• IUCN — Sets the Global Standard for Nature-based Solutions. Convenes 1,400+ member organizations across 170 countries.
• World Resources Institute (WRI) — Leads the Global Restoration Initiative and Global Forest Watch platform tracking deforestation in near-real time.
• WWF International — Co-leads the Trillion Trees initiative. Active in 100+ countries on NbS and biodiversity policy.

Emerging Startups

• Mombak — Brazil-based reforestation company planting native species on degraded Amazon pastureland. Backed by Microsoft and Bayer climate funds.
• Terraformation — Hawaii-based startup developing modular seed banks and solar-powered desalination to accelerate native forest restoration.
• Pivotal — UK startup using marine cloud brightening and ocean alkalinity enhancement as NbS-adjacent interventions for coral reef protection.
• Dendra Systems — Drone-based seed dispersal and monitoring technology. Has planted 60+ million seeds across degraded landscapes in Australia, UK and North America.

Key Investors and Funders

• Green Climate Fund — Approved $870 million for NbS projects in 2024.
• Bezos Earth Fund — Committed $10 billion to climate and nature, with significant NbS allocations.
• HSBC Pollination Climate Asset Management — Joint venture managing $1 billion in natural capital assets.
• Mirova Natural Capital — Manages the Land Degradation Neutrality Fund ($210 million AUM) and Sustainable Ocean Fund.

Sector-Specific KPI Benchmarks

Action Checklist

• Conduct a nature-dependency assessment. Map your organisation's dependencies and impacts on ecosystems using the TNFD LEAP framework before selecting NbS interventions.
• Prioritise high-integrity projects. Use the IUCN Global Standard for NbS and third-party ratings to filter projects. Require evidence of additionality, permanence safeguards and community consent.
• Blend financial instruments. Combine carbon credits, biodiversity credits, payment-for-ecosystem-services contracts and concessional finance to improve project bankability and diversify revenue streams.
• Invest in monitoring infrastructure. Budget for baseline surveys, remote sensing, eDNA sampling and long-term ecological monitoring from the outset. Monitoring costs should represent 5 to 15 percent of total project expenditure.
• Engage Indigenous and local communities. Ensure free, prior and informed consent. Design benefit-sharing mechanisms that allocate at least 20 percent of project revenue to local stakeholders.
• Align with regulatory frameworks. Track the EU Nature Restoration Law, Kunming-Montreal targets, national biodiversity strategies and TNFD disclosure requirements to anticipate compliance obligations.
• Set long-term time horizons. Commit to 10 to 25 year project timelines with adaptive management plans. Short-term interventions risk reversal and waste capital.

FAQ

What is the difference between nature-based solutions and conventional conservation? Conventional conservation focuses primarily on protecting existing natural areas from degradation. Nature-based solutions go further by explicitly linking ecological interventions to measurable societal outcomes such as climate mitigation, flood risk reduction, water purification or food security. The IUCN's eight-criteria Global Standard requires NbS projects to demonstrate net gains for both biodiversity and human well-being, a dual mandate that distinguishes them from traditional protected-area management.

How cost-effective are nature-based solutions compared to engineered alternatives? Multiple studies demonstrate that NbS can deliver equivalent or superior outcomes at lower cost for specific risk categories. Mangrove restoration provides coastal flood protection at roughly one-third the cost of concrete sea walls (WRI, 2025). Urban green infrastructure for stormwater management costs 10 to 30 percent less than conventional grey drainage systems over a 30-year lifecycle when co-benefits are included. However, NbS are not universally cheaper: they require larger land areas, longer time horizons and ongoing maintenance, and they may not suit locations where rapid, high-capacity infrastructure is needed.

How can organisations verify the credibility of an NbS project? Start with third-party certification against recognised standards such as the IUCN Global Standard for NbS, Verra's Climate, Community and Biodiversity Standards, or Gold Standard's ecosystem restoration methodologies. Check for independent carbon credit ratings from providers like Sylvera or BeZero Carbon. Verify that the project discloses baseline data, monitoring protocols, permanence safeguards and community engagement evidence. Finally, assess whether the project aligns with the Kunming-Montreal targets and any applicable national biodiversity action plans.

What role do Indigenous communities play in NbS? Indigenous Peoples manage or hold tenure over approximately 25 percent of the world's land surface, including areas that contain 80 percent of remaining biodiversity. Their stewardship practices are central to effective NbS. Research published in Nature Sustainability (Fa et al., 2024) found that deforestation rates within Indigenous-managed territories are 2 to 3 times lower than in comparable non-Indigenous areas. Any credible NbS project operating on or near Indigenous lands must secure free, prior and informed consent and establish equitable benefit-sharing agreements.

What is the outlook for NbS finance through 2030? UNEP projects that NbS finance flows need to reach $384 billion per year by 2030 to meet combined climate, biodiversity and land degradation targets. Current flows of $26 billion per year suggest a massive scale-up is required. Biodiversity credit markets, sovereign nature bonds, blended finance vehicles and TNFD-aligned corporate disclosure mandates are expected to mobilise additional private capital. The World Economic Forum estimates that nature-positive transitions could generate $10.1 trillion in annual business opportunities and 395 million jobs by 2030.

Sources

• UNEP. (2024). State of Finance for Nature: Bridging the Nature Finance Gap. United Nations Environment Programme.
• IUCN. (2024). IUCN Global Standard for Nature-based Solutions: Second Edition. International Union for Conservation of Nature.
• WRI. (2025). The Economics of Nature-based Solutions: Cost-Effectiveness Across Risk Categories. World Resources Institute.
• NatureFinance. (2025). Nature Finance Monitor: Private Sector Investment in Nature-based Solutions 2025. NatureFinance.
• INPE. (2025). Amazon Deforestation Monitoring Report 2024. Brazilian National Institute for Space Research.
• RRI. (2025). Community Rights and Nature-based Solutions: A Global Assessment. Rights and Resources Initiative.
• GEF. (2025). GEF-8 Portfolio Review: Nature-Positive Investments 2022-2026. Global Environment Facility.
• Fa, J.E. et al. (2024). Indigenous Land Management and Deforestation Outcomes. Nature Sustainability.
• WCS. (2025). Trillion Trees Progress Report: 56 Million Hectares Under Restoration. Wildlife Conservation Society.
• Apple. (2024). Restore Fund: Mangrove and Forest Carbon Investments. Apple Inc.