Can the EU taxonomy for sustainable activities help upscale investments into urban nature-based solutions?

Catalina Papari*, Friedemann Polzin, Helen Toxopeus, Harriet Bulkeley, Eloisa Vittoria Menguzzo

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review


We analyze the potential of the European Union (EU) Taxonomy (ET) for Sustainable Activities to mobilize investments for the sustainability transition toward urban nature-based solutions (UNBS). We map the current investment landscape of UNBS in Europe and combine this mapping with document analysis of UNBS inclusion in the ET to understand how the ET might help overcome the well-documented barriers to UNBS finance. We suggest that the ET has a legitimizing effect on UNBS as climate investments, which can support their uptake, but also conclude that only some UNBS subtypes are explicitly included when they fit with existing investment classes. In particular, the ET (1) disregards innovative - and specifically urban - UNBS types and (2) fails to provide incentives for investments that can deliver multiple sustainable objectives, which would enhance the investment case for UNBS. Since the current investment landscape of UNBS is characterized by a strong presence of public actors and a high incidence of co-financing, we recommend that public actors leverage the ET to obtain private funding for UNBS via (green) bond issuance and public-private co-finance instruments. Our analysis indicates that the ability of the ET to upscale investments for specific sustainability transitions depends on the interplay among their current investment landscapes, specific financing barriers, and explicit inclusion in the ET.
Original languageEnglish
Article number103598
Number of pages16
JournalEnvironmental Science & Policy
Issue numberJanuary
Early online date11 Oct 2023
Publication statusPublished - Jan 2024


  • Biodiversity finance
  • Disclosure
  • EU Taxonomy
  • Standardization
  • Sustainability transitions
  • Urban nature-based solutions


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