At least $1.67 billion have been allocated to nature-based solutions (NbS) in Brazil and the Caribbean over the past year, with agriculture-focused solutions seen as the top priority, according to a report released this week.

The report was released on Monday by Razan Al Mubarak, president of the International Union for Conservation of Nature (IUCN) and co-chair of the Taskforce for Nature-related Financial Disclosures (TNFD), during a panel at the Climate Week NYC.

The analysis, penned by several organisations and led by climate investment accelerator Capital for Climate, showed that finance for NbS in Brazil has increased significantly in recent years, with a growing number of investors launching new dedicated funds since the start of 2024.

According to the report, in the last 12 months, there has been at least $1.67 bln of capital allocated to NbS in Brazil and the Caribbean.

The number “likely underestimates” the total financial flows during the period, the report said, as it only captures those deals which have been publicly reported.

“The report demonstrates that investing in nature-based solutions today, not in the future, is feasible and profitable,” Al Mubarak said.

“And it is profitable on both NbS and sustainable food practices and business. This is just a taste of what we are going to get.”

Capital for Climate, in partnership with Deloitte, also carried out a survey across key stakeholders in the Brazilian market throughout 2024, revealing that investors are primarily interested in agriculture-related practices, such as agroforestry (over 69%), farm irrigation efficiency (over 60%), nutrient management (over 58%), and regenerative agriculture (over 51%).

Source: Capital for Climate, Deloitte

Notably, the report said agroforestry has been shown to generate between $300 and $1,500 per hectare annually, significantly outperforming extensive cattle ranching, which yields $50 to $100 per ha each year.

THREE PRIORITIES

To date, Capital for Climate has mapped $21 bln of investable NbS opportunities across Brazil, other Latin American countries, and Sub-Saharan Africa.

However, the report said that to fully unlock the NbS potential in Brazil and other high-potential biodiversity-rich markets around the world, three priority shifts are needed:

• Increasing demand for deforestation-free commodities and NbS
• Scaling private finance, which today represents only 18% of nature finance
• Integrating climate and nature policy at the international and national levels

“The hope is that we build the demand for deforestation-free commodities by demonstrating that it is implementable,”Al Mubarak said.

The need for deforestation-free products is becoming more and more relevant in Brazil as the EU Deforestation Regulation (EUDR) is about to enter into force later this year.

The law, adopted in June last year, mandates companies to ensure products sold in the EU have not led to deforestation and forest degradation.

By Giada Ferraglioni in New York – giada@carbon-pulse.com

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