Climate and Nature Investors
Updated: Sep 1
Cascade’s 2025 Climate and Nature Investing Initiative, a series of roundtable events that gathered stakeholders from venture capital, financial institutions, private companies, nonprofits, and government explored how climate and nature investing is evolving. The previous blog post presented the findings from in-depth discussions with diverse stakeholders, including from government, nonprofits, and the private sector. In this post, we provide additional context regarding who is funding climate and nature projects, particularly in the US context. We discuss why and how they invest and the challenges different types of investors are likely to face in the future. Understanding this is crucial for determining where this market is moving and how to communicate effectively in this realm.
The bottom line up top
Climate and nature investing draws on a diverse set of actors, from private firms and governments to non-profits, development banks, and households, each with distinct motivations, methods, and constraints. Understanding these differences is key to designing effective investment strategies and messaging.
Effective engagement requires tailoring messaging to each investor type's core motivations, and grounding messaging in credibility, viability, and risk-sharing will help overcome the uncertainty that constrains investment across all sectors.
Investor for climate and nature projects
Private sector
Why they invest | According to the World Economic Forum (WEF), nature-positive investments by the private sector are most likely when investors are either clearly dependent on natural resources (as in the energy or agricultural sectors) or when the overall financial benefits and risks of sustainable investments become evident. The latter is currently most pertinent for multinational investment firms, which acknowledge the long-term interdependency of global GDP and sustainability, and have deep enough pockets to weather related risks as natural capital markets mature. Reports, such as the WEF’s March 2026 50 Investible Opportunities for the New Nature Economy, may add momentum to these corporate investments. Smaller businesses also recognize the long-term economic benefits of nature and climate investing, but “greater commercial viability of projects” will be necessary to secure their participation. Similar comments can be made about venture capital funding which, while increasing, remains most likely in strongly commercialized areas, such as sustainable agriculture and related technology.
How they invest | Economic analysis suggests that while some private sector investments in climate finance and climate technology may slow (in some cases substantially), others may be growing as markets mature, financial models develop, and information on the financial benefits of different types of climate and nature markets becomes more available. There is general agreement that private sector investments will persist as private sector investors associate environmental resilience with long-term gains. Private sector instruments include commercial loans, sustainability-linked and/or catastrophe bonds, green investment and revolving funds, insurance pools and products, risk guarantees, sovereign debt refinancing, flexible loans and YieldCos. US investors currently appear more interested in climate adaptation than climate mitigation investments.
Challenges | According to the Climate Policy Initiative, private investment outpaced public investment for the first time in 2023. Yet geopolitical uncertainty since the start of 2025 has complicated private sector investments. A 2025 survey indicated US firms prefer a wait-and-see approach, expecting climate investing to rebound at the end of President Trump’s second term. The immature state of nature and climate investment markets characterized by high transaction costs, limited scalable projects, and great uncertainty about the potential for returns may also limit willingness to invest. This is particularly true for venture capital and other “return-first” investors, who may not invest in the absence of multiple revenue streams or crowding-in by public and philanthropic funders. More fundamentally, a lack of nature-specific expertise in many firms may make it impossible to identify potential investments in this area.
Local, State, and Federal Governments
Why they invest | Unlike private investors, local, state, and federal governing bodies must weigh climate and nature investments within the broader context of their governing systems and priorities, shaping investments in distinct ways. Governments tend to invest in climate and nature projects to promote general welfare, for instance to drive economic development, or to preserve public goods, as in conservation efforts focused on maintaining a clean supply of drinking water. Traditionally, the US federal government has also seen climate and nature investments as an opportunity for global leadership and promoting US interests abroad, although that appears to be changing under the current administration. Local and state governments, which represent a substantial share of government investments, see nature-positive investments as a means of adapting to urbanization shifts, energy availability, economic developments and environmental changes.
How they invest | This differs according to which type of government is investing:
The US federal government's climate and nature investments typically focus on big ticket items, including investments in renewable energy, infrastructure construction and adaptation, research and development, and insurance against climate disasters.
State investments resemble federal investments, just on a smaller scale, and may serve as a testing ground for federal action. State investments focus on a variety of targets, which can include protecting water, (farm) land, and wildlife, preventing wildfires, improving public recreation opportunities, restoring coastal areas, managing forests, improving ports, and reclaiming brownfield land. State investments occur both independent of and in collaboration with federal government investments.
Cities have substantially fewer resources compared to states or the federal government and are generally reliant on partnerships with these and other actors. Blended finance and private sector partnerships are two strategies that cities use to overcome their limited financial and administrative resources.
Challenges | These too differ by government type:
The association of climate- and nature-relevant topics with US strategic interests (e.g., energy and water availability, industrial production), as well as the politicization of some climate and nature topics, makes federal government nature and climate investments sensitive to prevailing political agendas. This has been particularly apparent over the past three presidential administrations.
States appear better positioned to invest in 2026 than was previously true but, like the federal government, remain exposed to changing political conditions. State investing can also be affected by the perceived salience of climate as an issue affecting people’s lives and by industrial and/or interest group opposition or support.
Cities face unique challenges given their small size. These include difficulties in attracting investors for public-private partnerships, limited expertise and data collection, more complicated communication structures, and insufficient staff to implement nature positive projects.
Non-profits
Why they invest | Non-profits active in climate and nature investing see investments as a tool for advancing their sustainability, ecological, and/or social priorities. Investments complement and provide financial support for non-profits’ other activities in this realm, such as promoting favorable policy frameworks or coordinating public and private sector action. The Millennial and Gen Z generations are relatively more committed to nature-positive giving than older generations, and their giving capacity will increase by “trillions of dollars” in the next two decades. This implies nature-positive non-profit funding should also increase over that time period. For now, it remains a small but growing portion of US charitable giving.
How they invest | According to a 2023 survey, US nonprofits spend $7.8-$9.2 billion annually on climate change programs and activities, and the 2025 Global Philanthropy Environment Index (GPEI) Global Report found climate change to be the most prominent emerging trend in philanthropy worldwide. Nonprofit instruments include sustainability linked bonds and loans and green investment funds. These investments frequently finance policy advocacy and lobbying activities, but may also directly fund climate-relevant projects, for instance related to transition or climate justice, or research on climate-relevant technologies. There is also growing interest in early-stage climate ventures where non-profits can maximize their impact. Overall, and unlike US private investors (see above), US nonprofits overwhelmingly focus on mitigation, not adaptation, with energy use and supply receiving the most funding, followed by land use. However, a 2024 survey suggests adaptation may be a growing part of nonprofits’ investment portfolio in the coming years.
Challenges | US non-profits face multiple challenges in the current landscape. First, financial planning has become more difficult. Many public sector contributions were eliminated in 2025 and there is limited information about if and how much funding will be available in the future. Simultaneously, private donors appear insecure about nature-positive donations given the current political climate and may be skeptical of openly committing to a nature-positive agenda – a phenomenon called “greenhushing.” This further complicates fundraising. Finally, nonprofits are now facing pressure to expand their activities to “backfill” activities like data reporting and collection or grant funding, which the US federal government is no longer pursuing or supporting. Yet a lack of staff and lack of funding make this expansion unlikely.
Development banks
Why they invest | In line with the United Nations’ 2030 Agenda for Sustainable Development, environmental sustainability is a central concern of national and multilateral development banks. National development banks often focus on infrastructure projects related to energy, agriculture, and transportation, all of which can benefit directly from nature-positive investments. Their investments not only raise banks’ domestic and international profiles, they also provide opportunities to shape policy frameworks and encourage private investment in projects the national banks support. Multilateral development banks have a variety of reasons for investing but generally see addressing environmental and climate challenges as a prerequisite for achieving other economic and sustainable development goals.
How they invest | Multilateral and national development bank instruments include diverse types of green bonds, debt-for-nature swaps, blended finance instruments, and revolving funds. National development banks, like lower-level governments, are limited by their smaller financial capacity and often primarily serve as financial facilitators. Examples include de-risking private sector investments via co-financing, lending in local currency, providing domestic expertise, and developing project pipelines that demonstrate the economic value of nature-positive investments. Multilateral development banks have relatively greater financial capacity and offer loans on a concessional basis, characterized by below-market rates and/or longer payback periods to advance environmental priorities and development agendas.
Challenges | Both national and multilateral development banks are dependent on partnerships to fulfill their climate and nature investment goals, making their investment capacity sensitive to changing political environments. Like city governments, national banks additionally face constraints arising from limited resources, technical capacity, and managerial oversight and coordination ability.
Households
Why they invest | Households around the world face several types of risk arising from changing environmental conditions, which may encourage them to make nature-positive investments. These include market risks related to property values, rising insurance and energy costs, potential fallout from labor market shifts or natural disasters, and changing environmental systems.
How they invest | Households in the US and Europe have long contributed to climate and nature investing by purchasing renewable and/or energy-efficient technologies and products, such as solar panels, electric vehicles or home insulation. These purchases often reflect financial incentives implemented by national governments, but occasionally also reflect strong public support for action on climate change, environmental conservation, or the social impact of production .
Challenges | For many households, nature-positive investments may be too expensive despite financial incentives offered by governments or companies. Households may be put off by expectations that such investments will disproportionately benefit some groups over others, and lack of access to or education about such investments can slow down or prevent participation.
Strategic messaging takeaways
Taken together, these dynamics suggest several messaging principles that can help you more effectively engage investors across the climate and nature landscape:
Match messaging to what motivates each investor type | Different types of investors respond to different factors: private firms and households respond more strongly to risk exposure and financial dependency, nonprofits and development banks act on mission and policy influence, and governments are driven by their political mandate. A single value proposition won't resonate equally across these groups, so messaging should be tailored to underlying motivations, not just the audience's size or sector.
Lead messaging with viability | Resource-constrained actors need messaging grounded in commercial viability, de-risking, and co-financing rather than harder-to-measure sustainability outcomes, even if that’s a desirable aspect of a project. At the same time, the growth of "greenhushing" suggests that even well-resourced actors may prefer messaging that avoids loud, nature-positive branding in favor of an operational or financial framing, particularly on politically sensitive topics.
Build credibility to counter uncertainty | Market immaturity, unclear returns, and geopolitical unpredictability are recurring barriers across investor types. Messaging that offers concrete data, precedent, or risk-sharing mechanisms is likely to be more persuasive than general appeals to long-term benefit.
Use generational shifts to inform messaging | The Millennial and Gen Z generations are more committed to climate- and nature-positive giving and investing, with their financial capacity set to grow substantially over the next two decades. Organizations with the flexibility to invest in next generation engagement now may benefit from building relationships ahead of that shift.
Additional reading: Recent studies related to climate and nature investing
The Nature Conservancy | Gaining Ground: State of Private Investment in Nature, 2026 06/2026 | Identifies trends in private sector investing in climate and nature finance since 2016, including where and when different types of private actors invest.
World Economic Forum | 50 Investible Opportunities for a New Nature Economy | 03/2026 | Includes ideas for nature-positive investments for business sectors, cities, and financial institutions.
United Nations Environment Programme | State of Finance for Nature 2026 | 01/2026 | Assesses current nature-positive and nature-negative investments and identifies opportunities for changing business-as-usual practices to align finance and nature goals.
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