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For the full story, see part 2 and part 3 of the #ForceForNature blog series.
Last week, against the stunning backdrop of Gatineau Park, Prime Minister Carney, along with Minister of the Environment Julie Dabrusin and Secretary of State for Nature Natalie Provost, announced the federal nature strategy – A Force of Nature.
We congratulate the Carney government on this accomplishment. We are encouraged by the strategy’s promising outlook for a thriving and inclusive nature finance market.
As the only Canadian initiative whose mandate is exclusively focused on closing Canada’s biodiversity financing gap, the Nature Investment Hub (NIH), is attuned to the heavy financing lift ahead of us to deliver on this mission. A lift that’s estimated at $20 billion per year before 2030.
In this first of three blog posts on the Nature Strategy, NIH Managing Director Priya Bala-Miller offers analysis on why the market-signalling effect of a $3.8 billion investment in nature over the next 4-5 years is significant.
Prior to its launch, some observers questioned the utility of a new strategy altogether. However, context and timing matter. A closer look at both factors offer additional granularity on why a clarification of the Carney government’s commitment to nature was warranted.
Policy pivots increased uncertainty
Prime Minister Carney’s prior record on the responsibility of the financial sector to act on climate and nature-related risks meant expectations were high that he would accelerate progress on this issue in Canada as well.
However, he arrived in office inheriting policy legacies that were dividing Canadians such as the consumer carbon tax, which he swiftly eliminated. Then came rapidly shifting geopolitical headwinds and a tariff war. These contextual factors prompted a number of environmental and economic policy pivots from the previous Liberal government.
Cumulatively these pivots, and the exit of MP Steven Guilbeault from cabinet, increased uncertainty about the strength of Canada’s commitment to 30×30 targets. They also raised concerns about the government’s capacity to respond to emerging concerns about a fragmented disclosures regime and greenwashing, and worries about how federal dollars would be deployed given the disappointing 2025 Budget signals for nature.
In branding itself as the ‘New Government’s’ vision, coupled with a vow of demonstrable leadership on nature at home and abroad, the Nature Strategy will go some way to quell prevailing uncertainty about the government’s position. The 3 pillars of the new strategy clarify action priorities for meeting the 23 objectives set out in the previous Nature 2030 Strategy document (now referred to as a roadmap).
Will private capital follow the government’s lead?
While not overstating the point, for the nature finance market at least, the new Nature Strategy offers a much needed re-affirmation of Canada’s support of the Kunming-Montreal Global Biodiversity Framework (GBF), its intention to hold to its 30×30 commitments for terrestrial and marine areas.
Importantly, on the state’s responsibility to financialize these commitments, this is the first time the government has clarified its intent to leverage private finance (as a priority) in support of GBF Target 19, to mobilize at least US$200 billion per year in domestic and international biodiversity funding from all sources by 2030.
Pillar 3 – Valuing Nature and Mobilizing Capital is a welcome first. It offers confidence for the mainstream financial sector (banking, finance and insurance) to increase its efforts to deploy net-new investment vehicles that could fund conservation for the long term. Commentary from financial sector players such RBC’s Thought Leadership team are already amplifying this signal.
Expectations of increased private capital allocation to nature also tracks with some of our data. For instance our forthcoming annual investor survey for 2025 found that there is substantial interest in under-financed areas including Indigenous Protected and Conserved Areas and the blue economy, while also expecting to continue or increase investment in more traditional themes like forestry and agriculture.
Devil is in the detail
Much hinges on how the Nature Strategy will be implemented. On this count, details on Pillar 3 were somewhat thin.
For instance, the Nature Strategy made a number of important investments to assure Indigenous leadership in achieving Canada’s conservation goals across land and sea. This is an important affirmation at a time when Indigenous partners are increasingly vocal about the risks of lagging on UNDRIP commitments. Much work remains on how fundamental structural issues related to land rights and jurisdiction will be addressed within the design of new nature finance instruments and their deployment.
While announcing a new Expert Taskforce charged with developing key recommendations under Pillar 3 may not seem like it goes far enough, this deliberative table is necessary because there are a lot of elements to get right in ratcheting up nature finance in Canada.
On Target 19, the Taskforce’s recommendations will need to cumulatively ensure that the right financial instruments, at the right scale of capital, are deployed in the right ecosystems, with the right configuration of partners, and the right measurement, reporting and verification (MRV) systems to ensure high-integrity and inclusive benefits that meet DRIPA commitments.
Getting the best out of this group will mean designing for the outcomes we want, and clarity on what this group is solving for.
Can the Expert Taskforce stay on task for Target 19? Check out the second blog in our #ForceofNature series where our team dives into this topic.
