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As we hit the halfway point of 2026, the Nature Investment Hub (NIH) is excited to be working on the future of nature-linked sub-sovereign bonds in Canada. As provinces, cities, and Indigenous Nations prepare to finance large-scale nature conservation, restoration, and stewardship projects across the country, the bond market is uniquely positioned to provide stable, long-term financing for these endeavours. This capital will be essential to making sure that Canada’s 2030 nature targets are achieved.
Canada’s sub-sovereign bond market, dominated by provincial government debt, is a core component of the country’s financial system and its ability to finance action on climate and nature goals. Sub-sovereign bonds are considered highly liquid and safe, and there is now an opportunity for the provinces to meet investor demand for nature themed bonds by structuring new issuances that will bring in fresh capital for nature conservation, in line with Canada’s 2030 Nature Strategy.
Engaging global capital allocators on the Canadian nature finance opportunity
The Nature Investment Hub’s Sub-Sovereign Engagement for Nature Finance (SS-ENF) project seeks to connect provinces and other sub-sovereign issuers with Canadian, European and international institutional investors most active in the emerging asset class of sustainability-linked and labelled bonds. The purpose of this engagement is to demonstrate to Canadian provinces and territories that there is strong institutional investor appetite for new high-ambition sustainability-linked and labelled bonds, and then to support these instruments coming to market. Learn more about labelled bonds here from the International Capital Markets Association (ICMA), the global bond market industry body.
NIH is seizing the opportunity to bring institutional investment into new Canadian nature bonds
Canadian and European pension funds and insurance companies are among the world’s most advanced allocators to sustainable sovereign and sub-sovereign debt. In Canada, sub-sovereign bond issuers (our provinces and larger cities) are routine bond issuers. As part of their regular capital raising activities, the provinces have an opportunity to access this capital to fund landscape-scale nature conservation, climate adaptation and biodiversity recovery projects. NIH is engaging with the debt management office and treasury teams across the 10 provinces and 3 territories about opportunities to dedicate more capital for nature via new bond structures, building on the example of Chile and other recent sovereign nature themed bond issuers.
Here at NIH, our focus is on the 10 provinces who are regular bond issuers engaging with the Debt Management Offices and Treasury teams to discuss potential nature-linked bond issuance opportunities. In the context of Nunavut, the Northwest Territories, and Yukon Territories who are not regular bond issuers, we will consider new investment structures that would enable investors to support globally important conservation projects in these places.
Reflecting our commitment to centre Indigenous leadership in conservation finance, this engagement will also actively amplify opportunities for Indigenous Nations to advance capital sovereignty through bond issuance. These efforts will be informed by frameworks such as the Indigenous Sustainable Bond Framework developed by the First Nations Major Projects Coalition, the First Nations Financial Management Board and Addenda Capital.
Convening nature finance investors and project developers at the Canada Investment Summit
As part of the SS-ENF project, the Nature Investment Hub and our partners will be hosting the Nature Finance Roundtable on 15 September in Toronto, during the Canada Investment Summit. The Roundtable will convene international and domestic institutional investors, underwriting banks and bookrunners, impact investors and project developers to advance landscape-scale nature conservation projects across the country. With global asset allocators coming to Toronto to invest in Canada’s future, the Roundtable is centering the most important nature finance opportunities for this audience. Please get in touch to learn more about the Roundtable and our work to scale the sub-sovereign nature bond market.
Our work is supported through generous commitments from the Metcalf Foundation and Sitka Foundation.
