Why Investing In Nature Is Vital For Sustainable Cities
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As urbanization accelerates globally, cities face mounting challenges from population growth and outdated infrastructure. With cities contributing 80% of the world’s gross domestic product (GDP), the economic stakes are high. Nearly half of this contribution is at risk due to nature loss, highlighting the urgent need to protect urban environments from nature-related risks and disasters. Our report, “Nature Positive: Financing The Transition In Cities,” explores the critical importance of investing in nature-based solutions to ensure resilient, sustainable cities.

Urban infrastructure in cities is under strain from population growth

The rapid pace of urbanization is straining existing urban infrastructure, leading to increased demand for limited resources and the crowding out of nature. As economic powerhouses, cities need to safeguard their ecosystems.

Unfortunately, only 0.3% of global urban infrastructure spending is currently allocated to nature-based solutions. Between 2018 and 2023, less than 10% of approved project expenditures from multilateral development banks (MDBs) were directed toward urban nature projects, indicating a significant gap in investment.

The overlooked economic value of nature in urban development

Nature provides essential services that contribute to human health, well-being, and economic stability. Clean air and water, climate regulation, and biodiversity are just a few of the critical outputs that nature offers. Despite this, investment in nature remains alarmingly low. The current biodiversity financial flows amount to $208 billion annually, with public finance accounting for 83% of the total. The lack of private sector participation in nature financing presents a missed opportunity for cities to leverage development finance as a catalyst for sustainable urban development.

To create resilient urban environments, cities must prioritize the integration of nature into their governance policies. This can be achieved through two key strategies:

Nature mainstreaming is essential for sustainable urban development

Integrating a nature lens into all financial flows and urban investment decisions is crucial. By ensuring that projects promote sustainability and resilience, cities can avoid compromising their natural ecosystems. This approach not only protects biodiversity but also enhances the quality of life for urban residents.

Financing nature requires innovative funding solutions

Identifying and expanding new financial opportunities for nature conservation is vital. Cities must mobilize additional resources and diversify funding sources to complement existing public-sector-dominated financial flows. By doing so, they can create a more robust financial structure that supports conservation efforts and drives sustainable investments in biodiversity.

Guidelines to accelerate nature-positive transitions by 2030

Our report published by the World Economic Forum, serves as a comprehensive guide for city leaders, financial institutions, and businesses. It is part of the broader Nature Positive Transitions series, which aims to halt and reverse nature loss by 2030, in line with the Kunming-Montreal Global Biodiversity Framework established at COP15.

This report not only highlights the relevance of nature-related risks but also provides guidelines for key actions city and business leaders can take to accelerate the nature-positive transition. By embracing the transformative potential of urban nature finance, cities can invest in a future that is livable, sustainable, and adaptable to emerging challenges.

Investing in nature is investing in the future of cities

As cities continue to develop, the integration of nature into urban planning and investment strategies is not just beneficial — it is essential. By prioritizing nature-based solutions and innovative financing models, cities can safeguard their ecosystems while enhancing economic stability and resilience. The call to action is clear: city leaders, financial institutions, and businesses must collaborate to harness the power of urban nature finance for a sustainable future. Investing in nature means investing in cities that thrive amidst the challenges of tomorrow.