Climate change and biodiversity loss are two key challenges of our time. If ambitious measures are not taken, our planet is expected to experience an overall temperature increase of more than three degrees. This will cause more extreme weather events, water scarcity, insecure food supply and new diseases. Higher temperatures also mean damage to natural habitats as well as a loss of biodiversity and important ecosystem services.
Two crises. One solution
Nature conservation helps with both climate action and the promotion of biodiversity – it is a solution to several challenges.
Nature-based approaches
In order to achieve the international community’s goal of keeping a global warming of 1.5 to 2.0 degrees in reach as well as to attain net zero targets by 2050, CO2 must also be removed from the atmosphere and stored for as long as possible. This makes natural carbon sinks indispensable – not just from an environmental perspective, but for economic and social reasons, too.
Nature-based approaches that restore degraded and deforested landscapes help to protect the climate and strengthen biodiversity. In addition, corresponding projects provide livelihood outcomes for the local population and strengthen further ecosystem services.
Making greater use of nature-based approaches for climate change mitigation requires the mobilisation of additional capital – and carbon markets can contribute to that. However, aspects of integrity need to be strengthened to generate high quality credits.
Our response
The Innovation Facility was established to address a critical gap in financing innovative nature-based carbon projects that have the potential to deliver significant climate, biodiversity and livelihood benefits but are not yet able to attract sufficient private investment.
Nature-based approaches can play an important role in addressing climate change by protecting, restoring and sustainably managing ecosystems that store carbon and support biodiversity. However, delivering lasting climate benefits requires more than carbon sequestration alone. Projects must demonstrate environmental integrity, generate measurable biodiversity outcomes, and safeguard the rights, knowledge and livelihoods of Indigenous Peoples and local communities.
Strengthening these dimensions is essential to building confidence in nature-based carbon projects and ensuring they contribute meaningfully to global climate and conservation goals. Through targeted grant financing, the Innovation Facility supports the development and testing of innovative approaches, methodologies and technologies that can enhance the quality, credibility and impact of nature-based carbon projects. By helping promising innovations demonstrate their effectiveness and scalability, the Facility seeks to catalyse broader investment in natural carbon sinks and accelerate progress towards global climate and biodiversity objectives.
