There is a popular meme on social media that quotes a Cree prophecy: “Only when the last tree has been cut down, the last fish been caught and the last stream poisoned, will we realise we cannot eat money.”

While the source may be obscure, or even apocryphal, the message is clear ... and also incredibly apposite.

Right now, the way we treat the planet is indeed responsible for multiple threats to ecosystems that are humanity’s life support system, including growing climate change that is responsible for frequent extreme weather events, floods, rising sea levels, wildfires, and droughts.

As the planet’s temperature rises, such natural disasters, along with land-use change, pollution, exploitation and invasive species, are disrupting entire ecosystems and our own health, with unanticipated business losses that threaten both assets and infrastructure.

Thankfully, action is being taken and foremost in this fight here in Scotland is NatureScot, acknowledged as the nation’s lead organisation in harnessing the power of nature to tackle climate change, with a mission to protect and enhance Scotland’s biodiversity.

NatureScot CEO Francesca Osowska explains: “The pressing challenges are the twin crises of nature loss and climate change. The human species depends on
nature to live: the air we breathe, the water we drink, our food supplies. Ultimately, if nature is threatened, we are threatened. Specifically, in terms of climate change, we know in order to keep the planet at the right temperature for humankind and the whole ecosystem, we need to limit warming to 1.5 degrees. So, yes, these are really pressing problems.”

The sheer scale of these challenges, Osowska points out, cannot, and probably should not, be met by the public sector alone.

“Public funds arc insufficient and will always be,” she says. “More controversially, there is the argument that business and finance have profited immensely from extractive business models. We are now learning how alternative models can bring investment in regenerating nature, mitigating the risks to business assets and supply chains from climate change and loss of nature.

In working with environmental green finance we are trying to establish appropriate markets so that those who benefit from improving nature and tackling climate change have incentives to invest.

The Herald:

“This is something in its early stages. Traditional business models have been around for a long time but this is quite innovative. Finding a way to match
those who benefit from inv stments in nature to the actual investments offers real potential to increase private investment.”

NatureScot’s ultimate aim here is to see this step change made in investment from the private sector into Scotland’s natural assets, benefiting all of society through nature-based solutions to climate change.

The figures involved in green finance are certainly significant. It is estimated that ecosystem services are worth $125-140 trillion every year - more than onc- and-a-half times the size of global GDP. The annual market value of crops dependent on animal pollination ranges from $235-577 billion.

Osowska says: “In Scotland, our natural capital, which is the source stock, if you like, of nature and all the things that it provides, is worth at least £196bn and is supporting 240,000 jobs at the moment.

That's huge in terms of the worth to the economy but, fundamentally, if we can’t get the private finance into nature, then we will suffer. Globally, we have consistently failed to invest in our natural capital.

“The Dasgupta Review of the Economics of Biodiversity shows global natural capital stocks have declined by 40% since 1992, in contrast produced capital has increased by 90% and human capital by 15%.”

The pressing need for investment in nature-based solutions to mitigate climate change is supported by a wealth of evidence and recommendations from diverse and some unexpected sources - including the Dasgupta Review, World Economic Forum, World Bank, OECD, the Committee on Climate Change, business, and the finance sector.

“This is quite a new area, not just for NatureScot, but in terms of the whole approach to nature conservation, restoration and recovery,” says Osowska.

“These are immature markets so one of the areas we’re involved in is working with
 government, finance houses, innovators, entrepreneurs and environmental NGOs to try to understand how we can support their growth, how we can increase private investment in natural capital and nature-related benefits across Scotland, and improve our wellbeing.

“We can then promote these models to businesses and to private financiers and really begin to test how they work.”

To achieve this goal, NatureScot, an organisation that is well known for its innovation, is collaborating with a range of bodies. The Scottish  Conservation Finance Project led by Sepa and the Scottish Wildlife Trust has identified nine
potential pillars of investment in its Route Map to £1 billion, covering a range of
mechanisms. NatureScot is co-ordinating and supporting continuing effort to deliver on this potential, including hosting the development of the Scottish Marine Environmental Enhancement Fund (SMEEF). The fund will accept voluntary donations from users of the marine environment such as shipping, aquaculture, fisheries, renewable energy, oil and gas, and use it to create a grant pot for projects which enhance the natural capital these sectors rely on.

One major challenge, however, is the risk of “greenwashing”, whereby companies and investors put more emphasis on PR than actual outcomes for nature and people. Osowska points out this could be a substantial barrier to acceptance but can be overcome with sufficient attention paid to transparency.

“One of the major goals that NatureScot can help with is to tell the story so that people can understand some of the ways that cnvironmental finance can work.

“Secondly, we’re able to measure the impact of what we’re doing and, again, tell that story and show businesses how it’s actually working.”

Another significant challenge is the potential for new markets in natural capital to distort land markets and make it more difficult to achieve the Scottish Government's aim of increasing community land ownership in Scotland. Osowska explains: “NatureScot is working with the Scottish Land Commission to understand and address this risk.”

She cites the example of Anglian Water, which in 2017 issued the first GBP green bond worth £250 million. The proceeds will be spent on capital and maintenance costs of sustainable water management and recycling projects to reduce climate footprint and harness the power of nature- based solutions.

The Cree prophecy is absolutely right, of course: we cannot eat money. However, when we use it wisely for green financing, it may well save the day — and the planet.

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