Trend watch: nature-based solutions in 2026

Global investment in nature-based solutions reached $154 billion annually by 2024, yet the UN Environment Programme estimates the world needs $384 billion per year by 2025 to adequately address climate change, biodiversity loss, and land degradation—revealing a $230 billion annual funding gap that represents both an urgent challenge and an unprecedented market opportunity. This disparity has catalyzed a fundamental shift in how corporations, governments, and financial institutions approach natural capital, moving from philanthropic afterthought to strategic investment thesis. As TNFD reporting requirements take hold and the IUCN Global Standard for Nature-based Solutions gains mandatory adoption in procurement policies, 2026 marks an inflection point where nature-positive strategies transition from voluntary commitments to operational imperatives.

Why It Matters

Nature-based solutions (NbS) represent interventions that protect, sustainably manage, or restore natural ecosystems while simultaneously addressing societal challenges such as climate adaptation, water security, food production, and human health. Unlike conventional grey infrastructure, NbS deliver compound returns: a coastal mangrove restoration project, for example, provides storm surge protection, carbon sequestration, fisheries habitat, and tourism revenue simultaneously.

The economic case has become irrefutable. The World Economic Forum estimates that nature-positive business models could unlock $10.1 trillion in economic opportunity and create 395 million jobs by 2030. Meanwhile, more than half of global GDP—approximately $44 trillion—is moderately or highly dependent on nature and its services, according to World Resources Institute analysis. When a single coffee company's supply chain depends on pollination services, watershed regulation, and climate-stable growing conditions, nature risk becomes financial risk.

The regulatory environment has accelerated this shift. Over 400 organizations adopted TNFD (Taskforce on Nature-related Financial Disclosures) recommendations by mid-2024, including major multinationals like IKEA, Standard Chartered, Bank of America, and AstraZeneca. The Kunming-Montreal Global Biodiversity Framework's Target 15 now requires businesses to assess, disclose, and reduce biodiversity risks—transforming what was once voluntary stewardship into compliance necessity.

Perhaps most critically, NbS projects have demonstrated commercial viability at scale. Approximately 80% of tracked NbS investments achieved market-rate returns in 2024, according to Forest Trends analysis, dispelling the notion that environmental impact requires financial sacrifice.

Key Concepts

The IUCN Global Standard: Quality Assurance for Nature Investments

The IUCN Global Standard for Nature-based Solutions provides the definitive framework for designing, implementing, and verifying NbS interventions. Developed through consultation with over 800 practitioners across 100 countries, the Standard comprises eight criteria and 28 indicators that distinguish high-integrity projects from greenwashing.

The eight criteria require NbS projects to: (1) address specific societal challenges; (2) design at landscape scale; (3) deliver net biodiversity gain; (4) demonstrate economic feasibility; (5) ensure inclusive governance with stakeholder participation; (6) balance trade-offs equitably; (7) implement adaptive management with monitoring; and (8) embed solutions into policy frameworks for long-term sustainability.

The Standard's second edition launched in October 2025, reflecting lessons learned from early implementations and tightening requirements around Indigenous Peoples' rights, including Free, Prior, and Informed Consent (FPIC) protocols.

TNFD Integration: From Projects to Portfolios

The Taskforce on Nature-related Financial Disclosures provides the complementary framework for reporting nature-related risks and opportunities to investors. While IUCN focuses on project-level quality, TNFD enables portfolio-level assessment through its LEAP methodology: Locate (identify nature interfaces), Evaluate (assess dependencies and impacts), Assess (determine material risks and opportunities), and Prepare (set targets, develop transition plans, disclose).

For NbS practitioners, TNFD alignment means demonstrating how interventions reduce enterprise-wide nature risks while generating measurable positive outcomes. The May 2024 WWF-UK guidance document explicitly maps IUCN Standard criteria to TNFD disclosure pillars, creating a clear pathway from project design to investor communication.

MRV Technology: The Verification Revolution

Measurement, Reporting, and Verification (MRV) technology has emerged as the critical enabler of NbS market expansion. Companies like NatureMetrics use environmental DNA (eDNA) sampling to verify biodiversity outcomes at unprecedented precision—detecting species presence from water or soil samples without invasive monitoring. Space Intelligence and Satelligence deploy satellite imagery combined with machine learning to track forest cover, carbon stocks, and habitat change over time.

This technological infrastructure addresses the historical challenge that limited NbS investment: the difficulty of quantifying nature's value. When investors can verify carbon sequestration rates, species abundance, and ecosystem health through independent digital monitoring, they can underwrite risk appropriately and price outcomes accurately.

What's Working

Corporate Integration at Scale

Major corporations have moved beyond pilot projects to enterprise-wide NbS integration. BP operates active NbS projects across the UK, Trinidad and Tobago, Georgia, Azerbaijan, and Turkey, encompassing seagrass restoration, coral reef rehabilitation, and forest restoration. The company launched three additional projects in the US and Brazil in 2025, representing systematic expansion rather than isolated experimentation.

Amazon's Right Now Climate Fund committed $100 million to forest, wetland, grassland, and peatland conservation, integrated with the company's broader sustainability strategy including 100,000 electric delivery vehicles and a commitment to power operations with 100% renewable energy by 2025. This bundled approach—combining NbS with operational decarbonization—reflects emerging best practice.

Water Security Investment Surge

Investments in NbS for water security doubled from $22.4 billion in 2013 to $49 billion in 2023, according to Forest Trends and The Nature Conservancy's 2025 analysis. This represents one of the fastest-growing NbS segments, driven by tangible return profiles: watershed protection reduces municipal water treatment costs, constructed wetlands deliver wastewater treatment at lower lifecycle costs than conventional facilities, and aquifer recharge projects provide measurable water volume outputs.

The Texas George W. Shannon Wetlands exemplifies this model—constructed wetlands provide water treatment, potable water reuse capacity, and recreational amenities while naturally removing contaminants at lower operational cost than mechanical alternatives.

Hybrid Financing Structures

Innovative financing mechanisms have unlocked capital that traditional project finance could not access. Climate Asset Management, a joint venture between HSBC and Pollination Group, raised $650 million for natural capital projects by structuring carbon credit revenues as returns for corporate investors. This blended approach—combining conservation outcomes with tradeable carbon assets—creates bankable cash flows from ecosystem services.

Biodiversity credits are emerging as the next frontier. Companies like Pivotal develop species-level data platforms integrated with sustainability-linked bonds, enabling investors to tie financial instruments directly to verified biodiversity outcomes rather than carbon alone.

What Isn't Working

The Private Capital Drought

Despite market potential, private sector investment remains severely constrained. Only 17-18% of total NbS investment comes from private sources, with governments providing the remaining 82-83%. This imbalance creates fragility: public budgets face competing demands, and governments spend three to seven times more on environmentally harmful subsidies ($500 billion to $1 trillion annually) than on nature protection.

Venture capital specifically has retreated. Early-stage sustainability funding dropped approximately 67% in early 2025 compared to 2024, with NbS's share of total climate tech investment declining from 12.6% in 2020 to just 4.7% in 2024. Long commercialization timelines conflict with VC return expectations, and measurement challenges persist despite technological advances.

Scaling Failures

Many NbS initiatives succeed as pilots but fail at scale. Reforestation projects demonstrate high survival rates in controlled demonstration sites only to experience 40-60% seedling mortality when expanded across diverse terrain with variable rainfall, soil conditions, and community engagement. The operational complexity of managing dispersed ecological interventions differs fundamentally from centralized industrial operations.

Integrity Concerns in Carbon Markets

The voluntary carbon market has damaged NbS credibility through high-profile integrity failures. Projects that claimed forest protection where no deforestation threat existed, or credited carbon sequestration without verifying actual tree survival, have generated skepticism among sophisticated buyers. While standards like Verra's VCS and the Climate, Community and Biodiversity (CCB) certification have tightened requirements, reputational damage persists.

The emergence of mandatory verification through MRV technology and IUCN Standard adoption represents the market's response to these failures, but the transition remains incomplete.

Key Players

Established Leaders

BP has built one of the most geographically diverse NbS portfolios among energy majors, with active projects spanning five countries and expansion into the Americas. Their approach integrates NbS with core operations, including pipeline replacement reforestation using native species.

Amazon combines its Right Now Climate Fund with operational sustainability investments, creating synergies between conservation spending and supply chain resilience. As the largest corporate purchaser of renewable energy, Amazon demonstrates how NbS fits within comprehensive decarbonization strategies.

Stantec provides engineering and consulting services that integrate NbS into infrastructure projects, bridging the gap between grey infrastructure clients and nature-positive design. Their work spans urban green infrastructure, coastal resilience, and watershed management.

The Nature Conservancy partners with Forest Trends on investment tracking and operates direct conservation projects while developing financial mechanisms that attract institutional capital to nature investments.

Emerging Startups

NatureMetrics has raised $25 million to scale its eDNA biodiversity monitoring platform, enabling independent verification of species outcomes across terrestrial and aquatic ecosystems.

MORFO deploys drone-based reforestation technology capable of dispersing 180 seed pods per minute and processing 50 hectares daily, addressing the scaling challenge that plagues traditional planting methods.

Single.Earth has developed MERIT, a nature-backed digital currency that tokenizes ecosystem services on blockchain, creating tradeable assets from forest preservation and wetland maintenance.

Restor provides high-resolution ecosystem monitoring combined with a global restoration network, connecting landowners with funding and technical support.

Key Investors and Funders

Lowercarbon Capital leads nature-positive venture investment with 17 deals spanning reforestation, ecosystem restoration, and biochar technologies across funding stages.

Breakthrough Energy Ventures, backed by Bill Gates, has deployed over $2 billion across 60+ climate startups including nature-based emissions reduction technologies.

Pollination Group operates a dedicated nature and climate tech fund making $4-12 million investments with 10-year time horizons aligned with ecological recovery timescales.

ADB Ventures focuses on nature-based solutions in the Asia-Pacific region, providing development finance where commercial capital remains scarce.

Examples

BP's Trinidad Pipeline Reforestation: When BP replaced pipeline infrastructure in Trinidad, the company implemented a Net Positive Impact plan requiring reforestation of 4-5 hectares using native tree species to compensate for corridor tree loss. This model integrates NbS directly into capital project budgets rather than treating environmental mitigation as a separate expense line.

Beira Chiveve River Restoration (Mozambique): The World Bank's restoration of the Chiveve River in Beira combined ecological rehabilitation with urban park development, creating a 17-hectare green space that reduced flood risk while providing community recreation. The project demonstrates how NbS delivers multiple benefits within municipal infrastructure budgets.

Six Senses Laamu Seagrass Protection (Maldives): The Six Senses resort protected hundreds of acres of seagrass meadows, generating measurable carbon absorption, supporting turtle and fish populations, and providing storm surge protection. For a tourism business, healthy marine ecosystems directly support revenue—guests pay premium rates for pristine environments, creating clear commercial incentive for conservation.

Action Checklist

• Conduct TNFD-aligned assessment of organizational dependencies and impacts on nature across value chain operations using the LEAP methodology
• Evaluate NbS project opportunities against IUCN Global Standard criteria to ensure investment quality and avoid greenwashing risks
• Integrate MRV technology requirements into procurement specifications for any NbS investment, requiring independent verification of outcomes
• Develop internal capacity for nature-related financial disclosure before regulatory deadlines force rushed compliance
• Engage with emerging biodiversity credit mechanisms to understand how species-level outcomes may complement carbon strategies
• Assess water security exposure and evaluate watershed protection investments as risk mitigation rather than discretionary sustainability spending
• Build relationships with established NbS developers and verifiers before market competition intensifies

FAQ

Q: How do nature-based solutions differ from traditional conservation? A: Traditional conservation focuses primarily on protecting ecosystems from human interference. Nature-based solutions explicitly engineer natural systems to deliver specific human benefits—flood protection, water treatment, carbon sequestration, temperature regulation—while maintaining or enhancing biodiversity. The distinction lies in intentional design for measurable societal outcomes alongside ecological preservation.

Q: What returns can investors expect from NbS projects? A: Approximately 80% of tracked NbS investments achieved market-rate returns in 2024, with water security projects showing particularly strong performance due to measurable cost savings compared to grey infrastructure alternatives. Carbon credit revenues provide additional cash flow, though pricing volatility remains. Biodiversity credits represent an emerging but less mature return stream.

Q: How does TNFD reporting affect companies without direct nature operations? A: All companies have indirect nature dependencies through supply chains. A technology company may not operate forests, but its hardware supply chain depends on mining operations with biodiversity impacts, its data centers consume water in potentially stressed watersheds, and its employee food services connect to agricultural land use. TNFD requires assessment of these extended dependencies and impacts.

Q: What distinguishes high-integrity NbS projects from greenwashing? A: High-integrity projects demonstrate: alignment with IUCN Global Standard criteria; independent MRV technology verification of outcomes; meaningful stakeholder and Indigenous community participation with FPIC documentation; additionality (outcomes would not have occurred without the intervention); permanence mechanisms ensuring long-term maintenance; and transparent reporting of both successes and failures.

Q: When should organizations prioritize operational decarbonization versus NbS investment? A: Operational decarbonization should remain the priority for Scope 1 and 2 emissions where technological solutions exist. NbS serves three complementary functions: addressing emissions that cannot be eliminated through operational changes; building resilience against physical climate risks; and protecting nature dependencies in supply chains. The most effective strategies integrate both approaches rather than treating NbS as offset substitution for avoiding operational improvements.

Sources

• UN Environment Programme, "State of Finance for Nature 2024," December 2024
• Forest Trends and The Nature Conservancy, "Doubling Down on Nature: State of Investment in Nature-Based Solutions for Water Security," January 2025
• World Resources Institute, "Financial Sector Guidebook on Nature-Based Solutions Investment," 2024
• IUCN, "Global Standard for Nature-based Solutions Second Edition," October 2025
• Taskforce on Nature-related Financial Disclosures, "Final Recommendations and Framework," September 2023, with 2024 guidance updates
• WWF-UK, "Attracting Investment in Nature-Based Solutions," May 2024
• Serena Capital, "VC Funding Trends in Nature Tech Report 2025," January 2025
• Nature4Climate and NatureTech Memos, "Nature Tech Report 2024"