During London Climate Action Week, as part of the Nature-3B Horizon Europe project, Heather Matson, Global Head of Nature and Biodiversity Finance, led an interactive half-day workshop on #FinancingNature to tackle nature-protecting instruments at scale.
Following an online foundational session earlier in June, participants joined an interactive session covering the bond issuance journey, four real-world case studies from Europe, Asia and the Americas, and a group exercise where participants assessed nature bond scenarios across three integrated lenses: benchmark eligibility, bond structuring, and investor due diligence. Key insights from the room:
- KPI design and verification remain a critical bottleneck for scaling nature finance.
- De-risking mechanisms need greater standardisation across European markets.
- While investor appetite and capital are available, issuers continue to require targeted technical support to bring projects to market.
"One of the most valuable insights from the group exercise was recognizing the role of Sustainability-Linked Loans as a stepping stone to bond issuance. An SLL, with its bilateral creditor-borrower structure, allows a potential issuer to build and test its internal reporting infrastructure and data verification capabilities with lower reputational exposure than a multi-investor bond. Once those internal mechanisms are robust and the potential issuer has demonstrated delivery on KPIs to a bank lender, transitioning to a Sustainability-Linked Bond becomes materially less risky. The bond market can then have confidence in the issuer's capacity to perform, and this is key with innovative financial mechanisms such as Nature-Protecting Bonds.” says Heather Matson.
Our deep thanks to the Aga Khan Foundation for generously hosting, and to Tushar Saini from UCD for his expert presentation on Nature Benchmarks.