Mobilising private capital at scale vital for climate battle

Mobilising private capital at scale has become a defining priority. From global investment houses to regional agrifood companies, the private sector is emerging as a driver of nature-based solutions (NBS) and climate-aligned markets.

A diverse array of financial actors is now channelling capital into climate and nature outcomes. Impact investment funds, private equity, and venture capital are deploying resources into regenerative agriculture, sustainable aquaculture, circular economy initiatives, and high-integrity carbon project developers.

Global financial institutions are issuing green bonds, sustainability-linked loans, and blended finance facilities that reduce early-stage risk and improve liquidity for NBS ventures. Meanwhile, institutional investors are treating sustainable land use as a real-asset class and allocating capital to nature-positive portfolios.

Corporations play an equally critical role. Multinationals are investing in landscape-scale NBS as part of their voluntary net-zero commitments, Scope 3 strategies, and efforts to comply with tightening EU and US due-diligence requirements.

These investments help secure supply chains, mitigate climate-related risks, improve water quality, and ensure compliance with deforestation-free regulations such as the EU Deforestation Regulation.

Many companies are also supporting long-term offtake agreements for high-integrity carbon credits, funding community development, and participating in blended public–private partnership platforms.

Across Southeast Asia and within Vietnam, domestic firms are preparing for the emergence of national carbon markets, future emissions-trading obligations, and sustainability-driven export requirements.

Enterprises in agriculture, aquaculture, forestry, and energy are increasingly investing in mangrove restoration, regenerative farming, and watershed protection, often using corporate social responsibilities or environmental, social, and governance (ESG) budgets to support communities and climate adaptation.

A combination of corporate, financial, regulatory, and domestic factors is pushing private capital towards climate and nature-based investments. Global value chains are transforming under the pressure of voluntary net-zero commitments, science-based targets initiative-aligned decarbonisation plans, and compliance mechanisms like CORSIA in international aviation. Companies are under mounting pressure to guarantee deforestation-free, climate-resilient sourcing while meeting transparency requirements through ESG disclosures.

In markets like Vietnam, companies anticipate domestic carbon market pilots, evolving emissions trading system requirements, and stricter sustainability rules in major export markets such as the EU, US, and Japan. Many see nature-based investments as a strategy to reduce operational risks, enhance yields and water quality, and strengthen their ESG credentials with investors and lenders.

Demand for nature-positive investments has surged, accompanied by growing interest in blended finance structures that share early-stage risk between public and private actors. Green banking policies and the need for climate-resilient infrastructure are further accelerating the flow of capital.

Globally, rules under Article 6 of the Paris Agreement are providing clearer pathways for international carbon credit transfers, whether sovereign internationally transferred mitigation outcomes, voluntary market transactions, or compliance-eligible units such as CORSIA credits. Bilateral cooperation agreements, domestic carbon decrees, and clearer definitions of carbon rights are strengthening investor confidence.

Vietnam stands out as one of the most promising destinations for nature-based climate finance in Asia. The country holds vast restoration potential, from mangroves and upland forests to agroforestry landscapes, and is steadily building the legal architecture for carbon markets.

Multinationals are actively seeking high-integrity Asian carbon credits and more resilient supply chains, which align closely with Vietnam’s strengths in community forestry, co-management systems, and strong local institutions.

The domestic private sector is exceptionally large in key land-use industries such as agriculture, aquaculture, forestry, tourism, and energy. Coupled with the country’s net-zero 2050 commitments and growing interest from development financial institutions, impact investors, and commercial banks, Vietnam is well-positioned to mobilise blended finance for restoration.

Private investment has the potential to transform the country’s landscapes and economies. It can secure long-term financing for restoration and community livelihoods, create green jobs in monitoring and sustainable production, and stimulate the emergence of new financial markets, from carbon trading to green lending.

Meanwhile, governments play a decisive role in shaping the investment environment. Clear rules on carbon rights, who owns them, who transacts them, and how benefits are shared, are essential. Transparent approval processes for land-based and blue carbon projects, alignment with national climate strategies, and rules for foreign investment and special purpose vehicle (SPV) structures enable market confidence.

Institutions and governance should be ready for projects. Investors seek strong local partners, effective safeguard systems, community engagement frameworks, and established benefit-sharing mechanisms. Capacity and credibility at the project level can make or break investment decisions.

Bankable, scalable projects are attractive. Secure land tenure, transparent land-use rights, robust baseline data, and internationally aligned measurement, reporting, and verification systems are fundamental. Investors look for evidence-based feasibility and clear pathways to scale.

Fit-for-purpose financing architecture is needed. Countries that offer blended finance facilities, pooled investment vehicles such as SPVs, and incentives for early-stage risk-sharing can attract significantly larger volumes of capital. Tailored financial structures help align investor expectations with the realities of long-term nature-based projects.

From the investor perspective, successful NBS projects share several characteristics. For global investment funds, they require bankable structures, predictable cash flow models, strong return on investment potential, and scalable pipelines.

At the same time, global corporates seek high-integrity carbon credits with low reputational and regulatory risk. They value projects that align with sourcing regions, demonstrate clear additionality and permanence, and offer visible co-benefits such as biodiversity, water security, and community livelihoods.

Domestic firms prioritise alignment with national carbon markets, direct operational benefits, such as improved productivity and water quality, and support for compliance with export and sustainability standards. Local partnerships and alignment with government priorities enhance attractiveness, along with opportunities for corporate leadership and brand value.