Retooling Nature Finance to be Fit for Our Moment

January 31, 2025 | By: Priya Bala Miller

 

In many cultures, liminal deities preside over thresholds, gates, and portals. These beings endow transitions with a sense of the sacred. In the Hindu traditions of my Tamil ancestors, Ganesha is revered for auspicious new beginnings. He is in good company with other threshold deities like Munsin (Korea), Makiubaya (Ifugao people, Philippines), Môn Thần (Vietnam), and Welcome Figures from diverse First Nations in the Pacific Northwest. For ancient Romans, it was Janus, physically represented with two faces looking in opposite directions. 

The turn of a new year invites Janus-like reflection on what has passed and what lies ahead. And so it is with the Hub on this threshold of both new leadership and a new year. 

Our inaugural year of 2024 gave us much to celebrate:

  • Securing institutional relationships with 8 new partners and steadily growing the network of organisations working with us to scale nature finance in Canada. 
  • Amplifying Indigenous-led conservation finance initiatives by engaging with the Restore, Assert and Defend (RAD) Network, becoming a First 30×30 Canada Collaborator, and continuing to be one of a number of ally organizations supporting the Stein Nahatlatch Initiative.
  • Contributing to a host of initiatives, including Realize Capital Partners’ market-building work around natural capital investment strategies or products, a pilot on best management practice insurance for Canadian agriculture, and Unlocking the Economic Power of Natural Climate Solutions with Smart Prosperity Institute and Nature United. 
  • Advancing thought leadership through eight speaking roles at events across the country, explainers on key conservation finance topics, and advice on reports like Finance for Forests and Stemming the Loss of Grasslands in Canada

However, sobering events like the devastating wildfires in Los Angeles certainly dent our hopes for the nature finance agenda. Grief for lives lost remains top of mind. We are also alert to the fact that rebuilding efforts will face the added headwind of a looming insurance crisis. Systemic factors certainly worsened the current calamity, and climate change contributed to increased fire risk across California. Coupled with a suppression of premiums, the result was a major pull back from insurance companies and serious overexposure for the state-backed insurer. 

It is also deeply concerning that rebuilding efforts do not always engender equity. For instance, in Florida, hurricanes often lead to accelerated gentrification in desirable neighborhoods. Constructing homes in neighborhoods required to meet more robust fire code provisions can be nearly twice the regular price of construction. Other signals such as the retreat of major financial institutions from Diversity and Equity (DEI) and climate initiatives are equally worrying. Symbolic acts such as re-naming nature sites that had reverted back to Indigenous names from colonial ones are setting an unpleasant tone for Reconciliation. 

For Canadians, this is not a ‘far-off’ problem that we can ignore. News and policy pundits alike point to similar issues of runaway costs for fire and flood-related insurance domestically. Meeting these challenges will require activating the whole nature finance ecosystem in Canada to retool and work smarter with approaches that we know can make a real difference like nature-based infrastructure and natural climate solutions

In this context, we feel the urgency of our work and sharpen the strategic focus for the Hub. In 2025, we will advance two flagship initiatives: 

  1. Canada’s Nature Finance Roadmap – This will involve the design of a collaborative process to action recommendations on scaling nature finance in Canada. Our action suite intends to leverage normative, market and policy instruments to secure credible commitments by key players that will a) improve the pipeline of investable nature projects and b) execute realistic interventions to diversify nature finance investment vehicles at differential rates of return. 
  2.  A ‘Made in Canada’ Nature Finance Bootcamp: We will work on designing and implementing an accessible and inclusive training program to address capacity barriers that are holding back the full potential of Canada’s nature finance market. 

In addition to continuing to support Indigenous-led organizations and our existing suite of partner-led projects, the Hub will also advance decision-making tools that increase capital allocation to nature. With support from Environment and Climate Change Canada, we will assess the feasibility of a matchmaking platform for proponents and investors in nature finance projects. We also will continue to benchmark progress through our annual investor survey on the State of Nature Finance in Canada. 

At this time of many transitions, sharp strategy and a sense of the sacred drives our work. The promise of opportunities to scale nature finance has deepened our resolve to act in alignment with our partners, and respond to an appropriate level of urgency. We are following through on the Hub’s ambitious mandate to achieve a fivefold increase in nature finance.