Terms

What is Regenerative Finance(ReFi)?

Regenerative finance(ReFi) is a sub-field of finance that deals with the financing of natural capital and ecosystem service regeneration. It is an emerging field that is gaining traction in both the private and public sectors as a way to finance the transition to a sustainable economy.

There are many different ways to finance regeneration, but all share the common goal of using financial instruments to incentivize the restoration of natural capital and ecosystem services.

Some of the most common methods include green bonds, carbon credits, impact investing, and payments for ecosystem services (PES).

Green bonds are a type of debt instrument that is used to finance environmental projects.

They are typically issued by governments or development banks and can be used to finance a wide range of regeneration projects, from reforestation to renewable energy.

Impact investing is a type of investment that seeks to generate both financial return and positive social or environmental impact. Impact investors typically invest in companies or projects that are working to solve social or environmental problems.

Payments for ecosystem services (PES) are payments made by businesses or individuals to those who provide ecosystem services, such as farmers who maintain healthy soils or foresters who manage forests for carbon sequestration.

PES can be used to finance a wide variety of regeneration projects, from habitat restoration to sustainable agricultural practices.

Regenerative finance is still in its early stages, but it is already having a significant impact on the way that the private and public sectors are financing the transition to a sustainable economy.

As the field continues to grow, it is likely that more and more businesses and governments will begin to use regenerative finance instruments to support the restoration of natural capital and ecosystem services.