Nature4Climate, along with climate investment platform, Capital for Climate, have today released a new landscape analysis report of the nature tech market in order to bring attention and finance to this burgeoning sector.
The report, The Nature Tech Market: Necessary, Emergent, Dynamic, comes as businesses search for investable, profitable and high-integrity solutions to help them meet climate and nature targets and the UN calls for transparency, accountability, high-integrity and a focus on nature and people in the transition to net zero. Nature tech encompasses any technology that can be applied to enable, accelerate, and scale-up nature-based solutions (NbS). The current nature tech market size is approximately $2 billion and is estimated to grow to $6 billion in less than ten years.
“We are hugely excited by the findings of this report. We need nature-based solutions to provide 30% of the mitigation required by 2030 in order to keep our global climate and nature goals in reach. The application of technology to NbS makes sense, both for the sake of the planet and financially, since an estimated $44 trillion of economic value relies on nature. It also has a huge role to play in giving people confidence in how nature can help us deliver on our climate targets,” said Lucy Almond, Chair, Nature4Climate.
Global public and private flows of capital to NbS are currently $133 billion per year, with estimates suggesting that investment levels need to increase four-fold in real terms by 2050 if the world is to meet its climate change, biodiversity and land degradation targets.
“This is a market-defining report of a space that is necessary, dynamic, and investable. Nature tech is critical to scaling and accelerating investment in nature-based solutions. While emergent, the nature tech space also has substantial opportunities for investors,” said Tony Lent, Co-founder, Capital for Climate.
As the world looks for new solutions to the climate crisis, and with the benefits of ‘climate tech’ and ‘clean tech’ now widely understood, nature tech – which de-risks investments in nature, boosts crop yields, increases transparency and promotes national and global growth – will play an increasing role in the next 10 years.
The report predicts investment in nature tech will accelerate, providing bankable benefits for those who protect, restore, and manage natural systems, ecosystems, and landscapes. Many industry leaders have already got involved: PitchBook investment platform reported that startups in the area of tech-led precision agriculture attracted more than $2bn in funding last year, a 46% increase year-on-year. The market for agricultural drones has also skyrocketed, forecasted to reach $5.9bn by 2026.
Several high profile funds for land restoration have also sprung up – such as Mirova’s $200m Land Degradation Neutrality Fund, to acquire, protect, restore forests in Latin America. In the monitoring space, Digital MRV 2.0 (remote monitoring, reporting and verifying for nature-based programmes) has been lauded by the World Bank for providing open source, low-energy support to users, which integrates across platforms, and opens the market to everyone from big business to smallholder farmers.
As Web3 and blockchain technologies take hold, several new tech-led initiatives for carbon credits have started, such as Toucan Protocol, Carbonplace and the Voluntary Registry Offsets Database. Blockchain has demonstrated its potential to improve the verifiability of credits and to reduce transaction costs. In addition, because data is recorded as a permanent ledger that cannot be modified, transparency is increased. The risk of “double counting” of credits is also reduced as transaction information is readily available for verification.
On the ground, NatureMetrics is bringing the power of genetics to frontline ecology. They use cutting-edge DNA analysis to monitor biodiversity and measure natural capital in the environment. By surveying everything from bats to bacteria, they help us understand how to protect and build natural capital through activities such as farming, energy generation and forestry.
NbS urgently require substantial and immediate scale up globally. Nature tech solutions make NbS more efficient, their benefits more verifiable, and can be used to ensure that they provide for a just transition. Nature tech is essential for helping NbS address the interrelated challenges of climate change and nature loss, as well as supporting global climate, nature and sustainability goals.
The report will be launched at a panel on Monday 14th November, at the Nature Zone at COP27. Entitled “How scaling Nature Tech could help solve the climate and nature crises” panellists from Capitals Coalition, Nature Metrics, Unilever, UNEP-WCMC and CISL will present the findings of the report and discuss the financing and future of nature tech across the sustainability, industry, and civil society sectors. They will also speak on the safeguards that should be adopted for nature tech to succeed.