Natural capital will be a growth area for investment

Significance

Investors are increasingly interested in the financial value of the natural world and how to fit it into their investment strategies. As well as decreasing carbon emissions, the focus is shifting to how to protect nature overall through methods such as reforestation, sustainable agriculture, ocean conservation and increasing biodiversity.

Impacts

• Asset managers are likely to launch an array of innovative nature-linked products.
• Carbon-offset projects will dominate asset inflows for now, but their attractions are limited and eventually they will be superseded.
• More banks are likely to introduce nature-based goals within their sustainability-linked loans.
• The pressure for greater transparency, accountability and measurable metrics will grow in the natural capital asset class.