The urgency for businesses to assess their climate impact and improve sustainability will continue to accelerate with the introduction of the Taskforce on Nature-related Financial Disclosures (TNFD).

Four experts share how biodiversity and natural capital are being defined, opportunities to monetize natural capital revenue streams, and how these integrate into business activities.

What is natural capital? 


“Natural capital is a term used to describe those parts of nature (e.g., plants, animals, freshwater and soils) that provide value to people (for instance carbon storage, pollination, or water purification). Importantly, when we speak about people, we also mean business. Corporates both depend on the services they receive from nature, and impact its ability to provide these services. Some of the clearest examples of this come from agriculture. Today’s rates of water abstraction may impede tomorrow’s water supply, and intensive management practices may have a cumulative impact on soil health. As such, by understanding our impacts and dependencies on natural capital we can take evidenced steps towards more sustainable business models.” Baroness Kathy Willis, Professor of Biodiversity, OXFORD UNIVERSITY

Marine de Bazelaire, HSBC

“Natural capital is about investing directly in the world’s natural resources, rather than in listed companies, while still getting a return on your investment. Think investing in the preservation of the Amazon rainforest, rather than in Corporates are increasingly understanding their direct or indirect dependence to natural capital and are looking for ways to transition toward business models that have a positive impact on nature. It ranges from depollution, circular economy, investment in agri-tech or nature-based solutions to name a few.” Marine de Bazelaire, Group Advisor, Natural Capital, HSBC

Where are the opportunities around natural capital?

Rachel Kolbe, INVIVO

“Everyone is talking about natural capital but the notion of “capital” still needs to be qualified.  If we consider that natural capital includes the provision of services and goods the economy depends upon, we need to recognize the diversity of the multiple benefits those goods and services provide and put value on them. And we need to pay the stakeholders who are enabling and maintaining those services. One of the barriers to moving forward is that our economy has benefited from these services for free for so long, making it difficult to put value on them now. Nevertheless, if we reframe the question, realize both all that we have to lose (supply chain sourcing, for example) as well as all we have to gain (re-ennobling farming and further job creation above and beyond climate mitigation), I believe we can innovate paths forward to building a positive value proposition which will create sustainable value for us all.” Rachel Kolbe, Head of Sustainability, INVIVO

“There are real and growing opportunities associated with natural capital. Markets continue to evolve, and increasingly value sustainable products and services. Those businesses that are able to respond will position themselves to capture customer demand. Climate and nature are increasingly front of mind for investors. Once an opportunity to improve their reputation, strong environmental credentials are increasingly required to secure the majority of investment mandates.
We expect these trends to strengthen as nature-related reporting requirements are finalised and implemented over the next two years. The Corporate Sustainability Reporting Directive (CSRD) will have a prominent role to play in Europe, while the Taskforce on Nature-related Financial Disclosures and the Science Based Targets Network are setting expectations for good practice internationally.” Kathy Willis

“Preserving and supporting nature is critical to our environment. It’s important that we get it right, not only to protect our planet, but to realise the huge economic and social opportunities that come with it. Nearly half of the world’s GDP relies upon biodiversity, which is one of the reasons why we launched Climate Asset Management with Pollination to create opportunities in this space. Climate Asset Management aims to create long term returns not only for investors but for nature too.” Marine de Bazelaire

Ben Stafford, REGENERATE

“The value of natural capital assets has been emerging where projects create positive environmental outcomes which are sold to counterparties wishing to lower their impact on the natural world. Natural capital has implications further than single projects such as peatland restoration. Natural capital has the potential to underpin wider actions within the investment sector, where quantification of natural capital can lead to better decision making by investors in a broader sectors such as agriculture. The key is unlocking the value of natural capital as a monetary return and as a positive impact for the wider system.” Ben Stafford, CEO, REGENERATE ASSET MANAGEMENT

Will natural capital become its own asset class? 

“We continue to hear from investors that more clients are asking for opportunities to invest directly in natural capital. Interest is based both on opportunities for returns, and the potential for positive impact on natural capital and biodiversity. Notably, timberland and farmland have performed at much lower levels of volatility in recent years, and are being turned to for inflation protection, diversification benefits, and stable returns. In addition to investments in more sustainable models of forestry and agriculture, natural capital investment strategies also include ‘environmental assets’. These tend to be carbon credits with co-benefits for species conservation or freshwater availability. Demand for voluntary carbon credits is growing rapidly, having doubled last year. As such, there is strong optimism within the investment community that nature-based carbon credits will have a greater role to play in driving returns for investors and positive outcomes for natural capital.” Kathy Willis

“Since 2020, we’ve seen private sector attention to nature growing, with many more businesses attending COP15 last year. Earlier this year we saw Apple expand its Restore Fund with up to an additional $200 million commitment, choosing Climate Asset Management to run this portfolio which straddles both natural capital and nature based carbon removal in the portfolio. As investment opportunities mature, and wider interest from businesses and investors grows that we’ll see natural capital grow to become an asset class like real estate.” Marine de Bazelaire

Join Kathy, Marine, Rachel, Ben and more tech-focused agribusinesses, investors and for insights and partnership opportunities. See the full programme of stage sessions and here and book your ticket.