From Concept to Cashflow: Mainstreaming Nature-based Solutions as an Asset Class
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eflections from a Private Investor Working Session, Nairobi – 4 September 2025
The conversation about nature-based solutions (NbS) has reached an inflection point. For years, we have heard calls to treat nature as an asset class. Today, that mission is no longer aspirational—it is entering a decisive phase. The challenge is not whether we should finance nature, but how to mainstream NbS into portfolios in ways that deliver resilience, adaptation, and financial returns.
The urgency is clear. UNEP estimates that meeting global NbS needs will require $11 trillion by 2050. Yet in 2022, private sector investment in activities that directly harmed nature reached at least $5 trillion—nearly 140 times more than was spent on nature-positive solutions. This imbalance underscores both the scale of the challenge and the opportunity to redirect capital flows.
The Barriers to Scaling NbS Investing
Despite rising interest, many asset owners and managers still struggle to place long-tenor NbS investments within their transition finance strategies. Persistent barriers include:
- A lack of standardized benchmarks and performance metrics.
- Short-term return pressures that undercut longer-horizon value creation.
- Unclear revenue models that make NbS appear risky compared to traditional infrastructure.
- Thin and fragmented investable pipelines.
These hurdles have limited the ability of institutional investors to engage with NbS at scale.
Signs of Momentum
At the same time, the mainstreaming of NbS is unmistakable. New generations of climate and physical risk tools are helping investors better quantify exposure. Fund managers are experimenting with innovative resilience-linked structures. And across the institutional ecosystem, adaptation finance is rising up the agenda.
The Global Center on Adaptation (GCA), through its Africa Adaptation Acceleration Program (AAAP), has been at the forefront of efforts to unlock NbS financing in the Global South, where the resilience dividend is most urgently needed.
As Adele Cadario, GCA’s Global Lead for Infrastructure & NbS, notes: “NbS investing can deliver integrated benefits across financial, resilience and adaptation, biodiversity, and carbon metrics. But adaptation-specific flows remain marginal. Redirecting existing public and private finance towards projects that reduce climate risks to infrastructure and strengthen local economies could be a game-changer for scaling private capital into resilience.”
Lessons from Nairobi: What Investors Are Asking
At a recent roundtable convened by GCA in Nairobi, we explored practical investor use cases of tools like the GRI Risk Viewer and its associated adaptation and financial assessment dashboards. Discussions with institutional investors, banks, and multilaterals highlighted four takeaways:
1. From risk mapping to investable pipelines
By quantifying estimated avoided damages (EAD) at the asset level, tools like the GRI Risk Viewer translate climate risk data into ROI terms investors recognize. Coupled with benefit–cost ratios, they can move mid-tier NbS—such as floodplains or rangelands—into the “bankable zone.”
2. Capacity building with accountability
Capacity-building grants and technical assistance are abundant, but their impact is uneven. Linking training to institutional business goals and measurable accountability metrics is essential to ensure these resources translate into actual financing flows rather than compliance exercises.
3. Turning NbS from concept to cashflow
The pool of investable NbS projects remains shallow. Carbon credits alone are insufficient. More robust models tap into payments for ecosystem services (PES) and resilience-linked financing. Promising test cases include:
- Mexico’s mangrove insurance bond, where payouts are triggered by avoided storm-surge damages.
- Water funds in Latin America, where utilities and corporates pay upstream communities for catchment restoration.
- Flood protection projects in the Philippines, blending avoided-loss valuation with resilience credits.
4. Embedding risk tools at the ‘first mile’
Banks can integrate digital climate risk tools directly into credit origination. Platforms like YAPU Solutions in Peru, SatSure and ADAPTA in Kenya, and CropIn in India are already embedding climate data into agri-loans, strengthening both credit quality and resilience.
The Path Forward
The way forward is not one silver bullet but a layered approach: stacking tools that capture avoided damages, resilience ROI, and monetizable carbon and biodiversity co-benefits. This modular model can help NbS pipelines graduate from reliance on concessional public finance to becoming institutional-grade, bankable assets.
Nature is no longer just a moral imperative or ecological ideal. With the right tools, metrics, and financing structures, it can—and must—become a core part of the investment mainstream.
The ideas presented in this article aim to inspire adaptation action – they are the views of the author and do not necessarily reflect those of the Global Center on Adaptation.
