An Investor Guide for Companies and Financial Institutions


27 June, 2024



Nature conservation and nature-based solutions are set to play a central role in the fight against climate change. However, a significant nature financing gap exists, particularly from private funding. Natural climate solutions (NCS), a subset of nature-based solutions, can help bridge this gap by providing investors with attractive returns and benefits while delivering positive climate, environmental, and social impacts.

Produced by the Natural Climate Solutions Alliance (NCSA), the Forest Investor Club (FIC), ERM and its Sustainability Institute, this guide provides insights to investors on how to identify and invest in high-integrity NCS projects – all for the ultimate purpose of increasing the flow of financial capital into these promising and high impact solutions.

The guide is intended both for financial institutions, such as impact investors or investment funds, and for companies, who are increasingly looking for ways to directly secure a supply of high-quality carbon credits. It highlights the questions that investors should ask, common challenges they may face, and examples of best practice across several stages of the NCS investment process including:

  • Building the business case for investment
  • Identifying investment types, structures, and associated stakeholders
  • Conducting effective due diligence
  • Determining a fair and equitable revenue sharing agreement
  • Integrating legal considerations
  • Implementing systems for measuring, reporting, and verifying data

Actions to conserve and restore nature are essential to mitigating the impacts of climate change, biodiversity loss, and social inequalities. NCS projects can have real and measurable impact on these challenges, but they must be deployed globally at scale if they are to realize their full potential. New investments in high-integrity NCS projects will be critical to accelerate this growth and fill the nature financing gap.