Unlocking Nature-based Solutions for Climate Resilience in the MENA Region
David Ramos is Acting Head of Sustainability - HSBC Middle East
NbS initiatives offer extensive sustainability impacts—benefitting people, the planet, purpose and profits. These projects adopt a comprehensive approach because conserving natural habitats yields multiple advantages which include species protection, carbon sequestration and socioeconomic opportunities for local communities. Yet, the financial returns from such investments often take time to materialise, with historical funding primarily coming from small-scale philanthropy or being predominantly public sector-driven.
The United Nations Environment Programme (UNEP) reports that investment needs to surge to $384 billion per year by 2025 and $484 billion per year by 2030 from the current $154 billion per year to achieve climate, biodiversity and land degradation targets.
Shifting financial flows towards climate-nature projects is essential for our planet’s future.
Financial Institutions: A Catalyst for Change
Financial institutions are uniquely positioned to propel NbS projects forward by providing capital, crafting innovative financial instruments and insurance products in addition to advising on risk management and performance structures. They also serve as crucial intermediaries, uniting stakeholders—governments, NGOs, private sectors and international bodies—to foster NbS projects. While governments and Multilateral Development Banks predominantly support non-revenue-generating environmental initiatives - private capital gravitates towards profit-yielding projects.
Achieving net-zero targets necessitates a collaborative effort among governments, financial institutions and businesses. Public-Private Partnerships exemplify such collaboration, with government support bolstering confidence among private investors and financial entities to co-invest in NbS projects. Governments can further attract private investment through incentives, guarantees or subsidies. Blended finance tools are instrumental in drawing diverse financial actors and increasing investments across the NbS spectrum.
Policy frameworks, co-developed by governments and financial institutions, can eliminate barriers to sustainable investments. Global policies are increasingly recognising the importance of finance and impact investments in achieving set goals. For instance, the Mangrove Breakthrough Community of Action, supported by civil society, governments, and the private sector, aims to expand global mangrove cover by 15 million hectares by 2030, necessitating $4 billion in financing.
The Potential of Islamic Finance
Islamic Finance, with its ethical and sustainable core principles, aligns closely with NbS. By structuring Shariah-compliant financial instruments, a new avenue of Islamic capital opens up, catering to investors seeking to support environmental and sustainable projects. This approach is particularly relevant in the MENA region in addition to countries like Malaysia and Indonesia where it can significantly accelerate NbS financing.
UAE’s Flagship NbS Project
HSBC, in collaboration with the World Resources Institute (WRI) and WWF, has initiated the “Nature-based Solutions for Climate, Biodiversity, and People” project in the UAE. This project aims to enhance the resilience of blue carbon coastal ecosystems, thereby supporting climate mitigation, biodiversity and community benefits. Through initial funding for pilot NbS projects, the initiative seeks to demonstrate commercial viability, spark entrepreneurship, and preserve natural capital, thereby attracting further investment.
The UAE’s leadership in setting net zero targets, a sustainable finance framework and the recent hosting of COP28, has spotlighted climate issues in the region, potentially increasing the demand for sustainable finance solutions1. HSBC’s commitment to this cause, through strategic partnerships and flagship projects, underscores the growing momentum towards integrating nature-based solutions in financial strategies for climate resilience.
David Ramos is Acting Head of Sustainability - HSBC Middle East
This article is part of a wider series to raise awareness about the powerful benefits of Nature-based Solutions. It features prominent voices of leaders who are advancing the UAE’s flagship NbS project as a key pathway to restore natural ecosystems and enhance climate resiliency.
The “Nature-based Solutions for Climate, Biodiversity, and People” project is funded by HSBC and implemented in partnership between the Ministry of Climate Change and Environment (MOCCAE), the Ministry of Economy (MoEc), the Environment Agency – Abu Dhabi (EAD), the Government of Umm Al Quwain, Emirates Nature-WWF and the International Center for Biosaline Agriculture (ICBA).
1 The UAE Sustainable Finance Framework (2021-2031) is “envisaged to enhance the supply and demand for sustainable finance and strengthen the enabling environment for climate and green investments through strong stakeholder collaboration.”