By: Samuel Lara, Sustainable Innovation Analyst
Last year, LGI published Beyond CSRD: Nature-Based Solutions as a Multi-Benefit Option, an Innovation Outlook that explored the tensions in implementing Nature-based Solutions (NbS), between ambition vs. implementation, compliance vs. impact, fragmented pilots vs. systemic change. Two weeks ago, the NetworkNature Annual Event gathered policymakers, researchers, and businesses in Brussels under the theme “Choose Nature”, which in turn explored different means to align biodiversity and the economy through NbS. The sessions highlighted both the urgency of acting in the face of accelerating biodiversity loss and the opportunities of transformational change: shifting from viewing nature as a constraint to recognizing it as the foundation of resilience, competitiveness, and wellbeing. Among the featured Horizon Europe projects is GoNaturePositive!, in which LGI is a partner, aiming to accelerate awareness and transformative **action towards a **nature positive economy across policymakers, investors, businesses, and wider society.
If there is a key message that converges across these different conversations, it is that transformational change is required to tackle the underlying issues we currently face. The world’s ecosystems are actively being degraded by direct drivers (such as deforestation and pollution) coupled with complex drivers (such as consumption patterns of resources and goods, harmful subsidies contributing to unsustainable practices, and unambitious governance structures that fail to match the scale of the challenge). All of this leads to one culprit: the current global economic model, which keeps failing to properly integrate nature as a central element. As Marianne Zandersen, from Aarhus University working on GoNaturePositve! and Invest4Nature put it, “This is a wicked problem with no silver bullet.”
If we are to move from ambition to mainstream practices, all economic actors must understand that NBS are a critical tool linking finance, policy and businesses, to the environment and to society.
Finance determines the pace
Throughout the event, speakers repeatedly stressed that finance will decide the speed of the transition. Hadrien Michel from the European Commission (DG ENV) framed investing in nature as a strategic asset for the continent's resilience and competitiveness. The numbers back this up: According to the World Economic Forum, more than half of global GDP and two thirds of the EU's added economic value depend on nature and its ecosystem services. Alongside, the European Central Bank shows that nearly 75% of all bank loans in the euro area are to companies that are highly dependent on biodiversity.
Investing in nature is thus increasingly recognized as essential for resilience and competitiveness. This the insurance industry provides a clear example: the Horizon Europe project Invest4Nature shows how ecosystems deliver insurance value by reducing the risks and costs of natural disasters. Natacha Boric from the Finance for Biodiversity Foundation highlighted that responsible investment must put nature at the center while Edoardo Carlucci of the International Institute for Sustainable Development (IISD) warned that if we continue to subsidize destructive practices, financial flows will undermine solutions rather than accelerate them. All this serves to understand that finance can accelerate the transition, but only if capital flows are aligned with nature, with strong safeguards and long-term nature positive goals.
Despite frequent calls for standardized methods and expansion of blended finance to quantify ecosystems over the years, the reality is that progress has been limited. As the GISD Alliance (Global investors for sustainable development) underline, a major obstacle is the absence of a common blended finance “playbook”, with most transactions still developed on case by case rather than through shared frameworks.
The Roadmap to Nature credits, recently launched by the European Commission, shows this divide best, for some credits raise ethical concerns as they risk commodifying nature, enabling greenwashing and encouraging over-reliance on offsetting, instead of reducing impacts at the source. While for others they represent a way to reward ecosystem stewards and improving their livelihoods.
Policy sets the direction
While there are still some divided opinions on financial mechanisms, there is consensus on a hard but clear truth: policy is the decisive lever. Without strong and consistent governance, even the most ambitious of initiatives risk being siloed, at best.
The good news is that momentum is building. The EU Nature restoration law that entered into force on August 18, 2024, sets binding targets to restore degraded ecosystems, prioritizing those that have most potential to capture and store carbon and reduce the impact of natural disasters. There is also a growing movement to recognize ecocide as an international crime to elevate environmental destruction at the same level as crimes against peace. This movement is not only institutional, citizen groups are increasingly taking their governments to court, as has been the case in France, were citizens sued the state over failure to project people from the impacts of global warming
The Corporate Sustainability Reporting Directive (CSRD) is pushing large companies to integrate nature into their core strategies since it entered into force on 5 January 2023. Proposals to narrow its scope may ease reporting administrative burdens, but it could also weaken accountability across value chains.
Business still missing
Although the CSRD has begun to shift the behavior of large companies and plans to include some small and medium sized enterprises (SMEs), a striking gap is the limited presence of businesses, especially SMEs, which are central to the European economy as they represent 99% of businesses. Nonetheless, in this absence lies also an opportunity: bringing SMEs into the NbS dialogue can unlock innovation, strengthen resilience across value chains, and spread benefits more equitably. So how can we bring SMEs and large corporate actors into these conversations? Why are they still missing?
The partner projects of NetworkNature+ agree that we still lack a clear understanding of the barriers SMEs face in implementing NbS. Could the gaps lie in:
- How to tackle the “net jobs” (jobs lost vs. jobs gained, knowledge, know-how, training needed) impact of transitioning to a nature-positive economy?
- Whether SMEs that commit to sustainable practices and Nature based Enterprises (NbEs) gain a lasting competitive advantage or merely a reputational “plus”?
- The effectiveness and credibility of credits (nature, carbon, or others) their voluntary character?
- The reliability of metrics, and their tendency towards "newcomers” while overlooking pioneers who have long implemented best practices?
Perhaps the challenge is less about producing more studies, and more about ensuring that SMEs can access and act on the knowledge there already is.
In all cases, generating the missing information is only a part of fixing the problem. What is needed is targeted support, through capacity building, training networks, and practical tools for local governments, investors, and businesses of all kinds. These efforts must translate into clear pathways to implement NbS in different contexts. Only by bridging this gap, from knowledge to practice, can we bring the missing economic interest into the transition.
Toward a Nature-Positive Economy
At their core, both the Beyond CSRD Innovation Outlook and the NetworkNature event point in the same direction: the need for a nature-positive economy. An economy that restores ecosystems to the point of recovery, aligns economic goals with ecological and social wellbeing, and treats nature not as a cost but as strategic infrastructure.
Isolated initiatives are just not cutting it anymore. Ambitious policies must set the direction and reform harmful incentives, creating the conditions for financial flows, mobilizing resources responsibly and delivering shared benefits. Those flows, in turn, must empower businesses of all sizes to embed nature into their operations and value chains. Capacity building is essential to translate these ambitions into practice with concrete tools. And above all, systemic change is needed to confront the economic models that continue to drive degradation of the natural world. Only when these levers reinforce one another can a truly nature positive economy start to emerge.
This is a big challenge but so is the determination among policymakers, researchers, and practitioners. There may be no silver bullet but there is a clear path forward: choose nature and place it center stage, to build a future where people and ecosystems can thrive together.
Find out more
Discover LGI’s work , learn about how we accelerate sustainable innovation
Discover Terracene! LGI's newly created corporate foundation focusing on nature and biodiversity
Read the GoNaturePositive! Concept Note and 5 Key Messages to outline what a nature-positive economy could look like.
Learn about NetworkNature – connect with Europe’s community of practice on nature-based solutions.