Corporate Financing of Nature Based Solutions: What Next?

The briefing examines the risks and requirements for corporate financing of Nature Based Solutions (NBS) in the context of net-zero commitments. It proposes a shift from traditional offsetting—where companies might choose to pay for reductions elsewhere rather than reducing their own emissions—to a 'counterbalancing' approach. Under this model, companies must first comply with the Science Based Targets Initiative (SBTi) to ensure they are on a 1.5°C trajectory across Scope 1, 2, and 3 emissions before using NBS credits. On the supply side, the document advocates for the 'jurisdictional approach' over project-based credits to better manage risks like leakage, permanence, and additionality, highlighting the ART/TREES standard as a robust framework for ensuring environmental and social integrity.

• To maintain the 1.5°C warming limit, corporations must prioritize aggressive internal emission reductions over the purchase of offsets, as the traditional choice to delay in-house action in favor of lower-cost offsets is no longer appropriate.
• The authors propose that companies should only be allowed to use NBS credits to 'counterbalance' residual emissions if they are compliant with the Science Based Targets Initiative (SBTi) and aligned with a 1.5°C trajectory.
• Nature Based Solutions (NBS) are estimated to potentially provide approximately one-third of the cost-effective avoided emissions and removals required by 2030 to limit global warming to 1.5°C.
• Prioritizing the avoidance of conversion of high-carbon ecosystems, particularly tropical forests, is more effective for near-term climate impact and biodiversity than restoration or afforestation.
• The 'jurisdictional approach' to NBS credits is preferred over project-scale efforts because governments have the authority to enforce land-use laws and the larger geographic scale reduces risks of leakage, reversals, and non-additionality.
• The Architecture for REDD+ Transactions’ The REDD+ Environmental Excellence Standard (ART/TREES) is identified as one of the most advanced standards for certifying high-value, high-integrity jurisdictional NBS credits.

APA

Steer, A., & Hanson, C. (2021). Corporate Financing of Nature Based Solutions: What Next? World Resources Institute. https://www.wri.org/insights/corporate-financing-nature-based-solutions-what-next

Chicago

Steer, Andrew, and Craig Hanson. Corporate Financing of Nature Based Solutions: What Next? World Resources Institute, 2021. https://www.wri.org/insights/corporate-financing-nature-based-solutions-what-next.

Wikipedia

{{cite report |last1=Steer |first1=Andrew |last2=Hanson |first2=Craig |title=Corporate Financing of Nature Based Solutions: What Next? |publisher=World Resources Institute |date=5 April 2021 |url=https://www.wri.org/insights/corporate-financing-nature-based-solutions-what-next |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{steer2021corporate, author = {Steer, Andrew and Hanson, Craig}, title = {{Corporate Financing of Nature Based Solutions: What Next?}}, institution = {World Resources Institute}, year = {2021}, month = apr, url = {https://www.wri.org/insights/corporate-financing-nature-based-solutions-what-next}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }