New report details progress on market-based solutions to protect natural capital

New report details progress on market-based solutions to protect natural capital

Momentum is a curious force. It’s invisible to the eye, but we can see a body in motion. Scientifically, we can measure it with precision, but we can also feel it, physically and psychologically. Momentum is both cold, hard fact and thrilling–or sometimes chilling–emotion.

Most discussions about the state of nature start with appropriately dire framing: the climate has changed, soil and water have been degraded, biodiversity has been lost. These are not new facts, but they deserve repetition, because the momentum of decline continues at global proportions. And we have to remember that every ounce of effort today contributes to a better outcome in the future.

We know it’s possible to change course entirely. The Nature Conservancy’s own science reveals that if we make the right moves within the next decade, we can eventually get to a world where people and nature thrive together. This will take a tremendous amount of work, but like starting up a flywheel, actors of every type are pushing hard on top of the progress made so far, and the acceleration is something we can feel.

Investing in Nature: Private Finance for Nature-based Resilience  aims to capture qualitative measurement of the positive momentum being built with market-based solutions to protect and improve natural capital. The points of view collected from investors, deal makers, intermediaries and governments reveal what is working well, and in some cases, not so well.Screen Shot 2020-01-15 at 9.09.26 PM.png  For example, a perennial issue is the tug of war between investor appetite and investable deals. Investments are either too big or too small, too risky or not rewarding enough. What is clear from this report, however, is that investments in nature are seen as both a necessity and an opportunity. Whether an investor’s motivation is profit, resilience, compliance or mission, natural capital will be increasingly factored into investment decisions.

This is a positive trajectory that we can accelerate if we all lean into it. For those who set public policy, develop deals and raise capital, we need to remember that our actions lead to change in investor behaviors, and this report offers several recommendations for progress. Investors and asset owners, on the other hand, have their own key to unlocking the potential energy of their capital: securing a competitive advantage.

Some investors are ahead of the curve: They recognize that their portfolios have always been at risk from the impacts of climate change, pollution, loss of nutrients, loss of species. They know that science will continue to provide better and better understanding of those risks. They see that the best deals will be able to evaluate and quantify not just  impacts on  nature, but the  benefits of  nature. They learn to analyze these relatively new factors. They ask questions… a lot of questions.