Trend analysis: Nature-based solutions & ecosystem restoration

Why It Matters

Nature-based solutions (NbS) now account for roughly 37 percent of the climate mitigation needed between today and 2030, yet they receive barely five percent of total climate finance (UNEP, 2024). Global investment in NbS reached $26 billion in 2024, an 11 percent increase over the prior year, but this figure represents just 17 percent of the estimated $154 billion annual requirement to halt biodiversity loss and land degradation by 2030 (State of Finance for Nature, UNEP 2024). At the same time, ecosystem degradation costs the global economy an estimated $6.3 trillion per year in lost ecosystem services, including water filtration, pollination, coastal protection and carbon sequestration (World Economic Forum, 2025). Three interlinked trends are reshaping how capital flows into ecosystem restoration: the rapid emergence of biodiversity credit markets, the mainstreaming of corporate nature-positive commitments, and the adoption of technology-enabled monitoring that makes NbS investable at scale. Understanding these trends is essential for sustainability professionals, investors and policymakers who need to direct resources toward interventions that deliver measurable ecological, social and financial returns.

Key Concepts

Nature-based solutions are actions that protect, sustainably manage or restore natural and modified ecosystems while simultaneously addressing societal challenges such as climate change, food security and disaster risk reduction. The International Union for Conservation of Nature (IUCN) defines NbS across eight categories, ranging from ecological restoration and ecosystem-based adaptation to natural infrastructure and green-grey hybrids used in urban settings.

Ecosystem restoration refers to the process of assisting the recovery of degraded, damaged or destroyed ecosystems. The UN Decade on Ecosystem Restoration (2021-2030) has catalysed pledges covering over one billion hectares globally, though actual implementation lags far behind commitments (UNEP, 2024).

Biodiversity credits are measurable, tradeable units representing verified biodiversity outcomes, distinct from carbon credits though often generated by the same projects. Unlike carbon offsets, biodiversity credits aim to represent net gains in species richness, habitat quality or ecosystem integrity, and are still in early-stage market development.

Nature-positive is a framework goal requiring that human activities result in measurable net gains for nature by 2030, relative to a 2020 baseline. The Kunming-Montreal Global Biodiversity Framework (GBF), adopted in December 2022, enshrines this ambition across 23 targets, including the landmark target to conserve 30 percent of land and ocean by 2030 (the "30x30" goal).

Blended finance for nature combines concessional public or philanthropic capital with private investment to de-risk NbS projects that cannot yet generate market-rate returns on their own. Multilateral development banks deployed $12.1 billion in nature-related finance in 2024, up from $8.7 billion in 2022 (World Bank, 2025).

Trend 1

NbS Investment Accelerates but the Finance Gap Persists

Total public and private finance flowing into nature-based solutions grew to $26 billion in 2024, representing the third consecutive year of double-digit growth (UNEP State of Finance for Nature, 2024). The increase is driven by several converging forces. Sovereign debt-for-nature swaps, such as Ecuador's $1.6 billion restructuring brokered by Credit Suisse and the U.S. International Development Finance Corporation in 2023, and Gabon's $500 million blue bond swap in 2024, have unlocked billions in new conservation funding (The Nature Conservancy, 2025). Multilateral climate funds are also allocating a rising share to NbS: the Green Climate Fund approved $2.3 billion for ecosystem-based adaptation projects between 2022 and 2025, and the Global Environment Facility's eighth replenishment earmarked $1.4 billion specifically for biodiversity (GEF, 2024).

Private sector participation is broadening. Mirova's Land Degradation Neutrality Fund, the world's first land-restoration impact fund, reached $208 million in assets under management and has invested in restoration projects across 30 countries. HSBC Pollination Climate Asset Management raised $660 million for its first natural capital fund in 2024, targeting forestry, blue carbon and regenerative agriculture assets. BTG Pactual Timberland Investment Group manages over $8 billion in forestry assets, increasingly structured around carbon and biodiversity co-benefits (BTG Pactual, 2025).

Despite this momentum, the annual finance gap remains daunting. UNEP estimates that nature-positive finance needs to reach $542 billion per year by 2030 across all categories, including biodiversity conservation, sustainable agriculture and pollution control (UNEP, 2024). Current flows cover less than five percent of this requirement. Closing the gap demands new financial instruments such as biodiversity bonds, nature-linked insurance, and payment-for-ecosystem-services schemes, as well as reform of the $1.7 trillion in annual subsidies that actively harm nature, including agricultural subsidies, fossil fuel subsidies and fisheries subsidies (OECD, 2024).

Trend 2

Biodiversity Credit Markets Emerge as a New Asset Class

Biodiversity credit markets have moved from conceptual stage to active piloting in under three years. Total transaction value reached $12 million in 2023 and is projected to scale to $2 billion annually by 2030, according to the World Economic Forum's Biodiversity Credits Initiative (WEF, 2025). The pace of development is accelerating: at least 40 biodiversity credit schemes were active or in design globally by mid-2025, compared with fewer than ten in 2022 (IUCN, 2025).

Australia's Nature Repair Market Act, which came into force in January 2024, established the world's first government-backed biodiversity credit registry, allowing landholders to generate and sell certificates for verified biodiversity improvements on their land. In the first year, 327 projects registered, covering 4.2 million hectares across arid rangelands, tropical wetlands and temperate woodlands (Australian Government, 2025). The UK's Biodiversity Net Gain (BNG) regime, mandatory for all planning applications from February 2024, requires developers to deliver a minimum 10 percent biodiversity net gain measured using the statutory metric. Natural England reported that over 2,100 BNG assessments were submitted in the first nine months, generating demand for off-site habitat creation credits worth an estimated 180 million pounds (Natural England, 2025).

Corporate demand is building. Kering, the luxury conglomerate, launched its Regenerative Fund for Nature in partnership with Conservation International, committing 140 million euros over five years to restore one million hectares of farmland and critical habitats. Holcim, the global building materials company, committed to achieving nature-positive outcomes across 100 percent of its quarry sites by 2030 and is piloting biodiversity credit purchases to offset residual impacts. Meanwhile, Salesforce is purchasing biodiversity credits from verified mangrove restoration projects in Colombia and Kenya as part of its 100 Million Trees initiative (Salesforce, 2025).

The market faces significant challenges. There is no universally accepted methodology for quantifying biodiversity outcomes, and metrics vary widely across schemes. The risk of "biodiversity-washing," where credits represent marginal or temporary ecological gains, mirrors concerns that plagued early carbon markets. The International Advisory Panel on Biodiversity Credits, co-chaired by France and the UK, released integrity principles in 2025 calling for additionality, permanence, measurability and equitable benefit-sharing, but binding standards remain under development (IAPBC, 2025).

Trend 3

Technology-Enabled Monitoring Makes NbS Investable at Scale

Investor hesitancy around NbS has historically centered on measurement uncertainty. Ecosystem outcomes are complex, multi-dimensional and slow to materialize. A new generation of monitoring technologies is closing this gap. Environmental DNA (eDNA) sampling, which detects species presence from water or soil samples, can now identify over 85 percent of fish and amphibian species in a given watershed from a single one-litre water sample at a cost of less than $500 per site, compared with $5,000 or more for traditional ecological surveys (NatureMetrics, 2025).

Satellite-based ecosystem monitoring has made dramatic advances. Planet Labs now provides daily three-metre resolution imagery across all terrestrial ecosystems, enabling near-real-time deforestation alerts, habitat condition assessments and restoration progress tracking. The European Space Agency's Copernicus Sentinel-2 constellation delivers free ten-metre multispectral imagery every five days, and derivative products such as the World Database on Protected Areas vegetation index allow automated comparison of ecosystem health inside and outside conservation boundaries (ESA, 2025).

Acoustic monitoring using AI-powered bioacoustic sensors has emerged as a scalable biodiversity measurement tool. Rainforest Connection has deployed 4,800 solar-powered acoustic sensors across 37 countries, detecting illegal logging, tracking species populations and generating biodiversity data that feeds directly into credit verification processes. In a pilot in Sumatra, acoustic monitoring identified a 42 percent increase in bird species richness within two years of initiating forest restoration, providing real-time evidence of ecological recovery (Rainforest Connection, 2025).

These technologies converge in integrated digital platforms. Restor, a platform spun out of ETH Zurich, aggregates satellite, eDNA and ground-truth data for over 150,000 restoration sites worldwide, enabling investors to compare projects by ecological potential, carbon sequestration rates and cost-effectiveness. Similarly, the UN Environment Programme World Conservation Monitoring Centre's (UNEP-WCMC) Ecosystem Restoration Monitor tracks progress against national pledges and provides standardized indicators that feed into GBF reporting.

The implications for capital allocation are significant. When restoration outcomes are measurable, verifiable and comparable, NbS projects become amenable to performance-based financing, results-based payments and insurance products. Swiss Re has underwritten parametric insurance for coral reef restoration in Mexico's Quintana Roo, with payouts triggered by satellite-detected reef damage following hurricanes, covering $3.8 million in restoration costs for a 7,000-hectare reef system (Swiss Re, 2025).

Market Dynamics

The NbS market is characterized by a structural mismatch between supply and demand. On the demand side, 196 countries have committed to the Kunming-Montreal GBF, over 1,500 companies have signed the Business for Nature pledge to be nature-positive by 2030, and regulatory frameworks such as the EU Corporate Sustainability Reporting Directive (CSRD) and the Taskforce on Nature-related Financial Disclosures (TNFD) are creating mandatory disclosure requirements that drive corporate action. On the supply side, restoration project pipelines are constrained by land tenure disputes, community engagement challenges, long project development timelines and insufficient technical capacity in biodiversity-rich developing countries.

Pricing remains opaque. Voluntary biodiversity credits trade between $5 and $100 per unit depending on methodology, ecosystem type and geography. High-integrity mangrove and coral reef credits command premiums of 3x to 5x over terrestrial grassland credits due to their co-benefits for coastal protection, carbon sequestration and fisheries productivity. Standardization efforts by the Biodiversity Credit Alliance and the IUCN are expected to reduce pricing fragmentation over the next two to three years.

Key Players

Established Leaders

• The Nature Conservancy (TNC) — World's largest conservation organization with 125 million acres protected and ongoing debt-for-nature swap leadership.
• IUCN — Sets global NbS standards and co-chairs the International Advisory Panel on Biodiversity Credits.
• UNEP — Leads the UN Decade on Ecosystem Restoration and publishes the State of Finance for Nature report.
• Conservation International — Manages large-scale restoration programs in 30+ countries with private-sector co-investment.

Emerging Startups

• NatureMetrics — eDNA biodiversity monitoring as a service, used by over 200 clients across 90 countries.
• Rainforest Connection — AI-powered acoustic monitoring for forests and oceans across 37 countries.
• Restor — Open data platform connecting 150,000+ restoration sites with investors and researchers.
• Wallacea Trust — Biodiversity credit developer piloting high-integrity credits in Indonesia and the Philippines.

Key Investors & Funders

• HSBC Pollination Climate Asset Management — $660 million natural capital fund investing in forestry, blue carbon and regenerative agriculture.
• Mirova — $208 million Land Degradation Neutrality Fund targeting restoration across 30 countries.
• Bezos Earth Fund — $10 billion commitment with significant allocation to nature and biodiversity programs.
• Green Climate Fund — $2.3 billion approved for ecosystem-based adaptation projects (2022-2025).

Sector-Specific KPI Benchmarks

Action Checklist

• Assess nature dependencies and impacts. Use the TNFD LEAP framework to identify material nature-related risks and opportunities across your value chain before committing capital.
• Set measurable nature-positive targets. Align with the Science Based Targets Network (SBTN) for nature, specifying quantified baselines, interim milestones and 2030 endpoints.
• Pilot biodiversity credits cautiously. Start with high-integrity schemes that apply IAPBC principles (additionality, measurability, permanence, equitable benefit-sharing) and disclose purchases transparently.
• Invest in technology-enabled monitoring. Require eDNA, satellite and acoustic data from restoration partners to ensure verifiable outcomes and reduce long-term audit costs.
• Engage communities and Indigenous peoples. Ensure free, prior and informed consent (FPIC) and meaningful revenue-sharing arrangements in all NbS project designs.
• Advocate for subsidy reform. Support policy efforts to redirect harmful subsidies toward nature-positive outcomes, which OECD estimates could free up $1.7 trillion annually.
• Integrate NbS into climate strategy. Combine nature-based removals with direct decarbonization, using NbS credits to address residual emissions rather than delay internal reductions.

FAQ

How do biodiversity credits differ from carbon credits? Carbon credits quantify tonnes of CO2 equivalent avoided or removed. Biodiversity credits aim to represent measurable gains in ecological outcomes such as species richness, habitat quality or ecosystem functionality. While many NbS projects generate both, biodiversity credits have distinct methodologies, registries and integrity frameworks. The Biodiversity Credit Alliance and IUCN are developing standardized approaches, but the market is still nascent compared to the $2 billion voluntary carbon market.

What is the biggest barrier to scaling NbS investment? The finance gap is the most cited barrier. Annual NbS investment of $26 billion covers only 17 percent of the estimated $154 billion needed by 2030 (UNEP, 2024). Beyond capital shortfalls, measurement uncertainty, unclear land tenure, lengthy project development cycles and the absence of standardized biodiversity metrics deter institutional investors who require transparent, comparable and auditable return profiles.

Which regions offer the highest restoration potential? Latin America holds the largest share of committed restoration area at approximately 35 percent of global pledges, driven by Brazil's Atlantic Forest Restoration Pact and Colombia's national restoration program. Sub-Saharan Africa follows with 28 percent, anchored by the African Forest Landscape Restoration Initiative (AFR100) covering 133 million hectares across 34 countries. Southeast Asia represents a growing frontier, with Indonesia, the Philippines and Vietnam each piloting large-scale mangrove and peatland restoration programs.

How reliable is technology-based biodiversity monitoring? eDNA sampling can detect over 85 percent of target species at a fraction of traditional survey costs (NatureMetrics, 2025). Satellite imagery provides daily global coverage at three-metre resolution. AI-powered acoustic sensors have demonstrated species identification accuracy above 90 percent in tropical forest settings. While no single technology replaces comprehensive ecological assessment, combining these tools in integrated platforms provides sufficient rigor for investment-grade verification and credit issuance.

What should companies prioritize first? Start with a nature dependency and impact assessment using the TNFD LEAP framework, then set science-based targets for nature through SBTN. Companies should integrate NbS into existing climate strategies rather than treating nature as a standalone initiative, and prioritize high-integrity biodiversity credits from verified projects with transparent monitoring data and community benefit-sharing.

Sources

• UNEP. (2024). State of Finance for Nature 2024: Closing the Nature Finance Gap. United Nations Environment Programme.
• World Economic Forum. (2025). Biodiversity Credits Initiative: Market Sizing and Integrity Framework. WEF.
• The Nature Conservancy. (2025). Debt-for-Nature Swaps: Global Pipeline and Impact Assessment. TNC.
• Natural England. (2025). Biodiversity Net Gain Implementation: First Year Review. Natural England.
• IUCN. (2025). Global Assessment of Biodiversity Credit Schemes: Standards and Integrity. IUCN.
• NatureMetrics. (2025). Environmental DNA Monitoring: Cost Benchmarks and Species Detection Rates. NatureMetrics.
• Rainforest Connection. (2025). Acoustic Monitoring for Biodiversity: Deployment and Detection Performance. Rainforest Connection.
• OECD. (2024). Harmful Subsidies and Biodiversity: Quantifying the Global Impact. OECD Publishing.
• ESA. (2025). Copernicus Sentinel-2: Applications in Ecosystem Monitoring and Restoration Tracking. European Space Agency.
• Swiss Re. (2025). Parametric Insurance for Nature: Coral Reef and Coastal Ecosystem Coverage. Swiss Re.
• GEF. (2024). Eighth Replenishment: Biodiversity Allocation and Project Pipeline. Global Environment Facility.
• World Bank. (2025). Multilateral Development Bank Nature Finance Tracking Report. World Bank Group.