Investing in a Nature Positive Future

Nature is the collective characteristics of the physical world, including plants, animals, the landscape, and other features and products of the earth. Biodiversity is more specific, referring to the diversity of life on earth, including genes, species, ecosystems and the interactions among them. Biodiversity is not only intrinsically valuable but provides important ecosystem services to society including food, fibre, building materials, pollination, soil formation and nutrient cycling, and freshwater purification.

There would be no global economy and no civilisation without nature.

For institutional investors, accounting for nature and climate adds a new and complex imperative to portfolio allocation, namely, how to choose investments that at a minimum do not increase nature loss and beyond that might even restore it. That is, how do investors create a Nature Positive investment portfolio, and what are the metrics needed to determine if we are succeeding or failing?

This paper explores the policy environment, mechanisms to incentivise conservation or regulate impacts on nature, implications and opportunities arising for investors, and the new tools that are emerging to take on this challenge.

While impacts on nature flow from every asset class, this paper focuses primarily on private real assets and particularly on forestry, agriculture and land management. These sectors are increasingly seen as converging into a new natural capital asset class offering potential solutions to global, biospheric and existential issues