Fund Solutions

Investor Demand for Natural Capital Surges

More than 50 asset managers globally are providing natural capital-focused strategies to meet asset owner demand, according to a study published by independent global investment consultancy bfinance. Three main categories of natural capital assets were identified by the group: agriculture, timberland and nature-based climate solutions. The study noted that 32 funds globally generating carbon credits for their investors were collectively seeking to raise US$19 billion in equity commitments, with several of them offering very low or no recurring yields. Sixteen percent of the 32 funds’ returns are almost entirely driven by carbon credit production, with the rest seeing commercial returns supplemented by carbon credit revenues. “Protecting, restoring, and sustainably managing natural ecosystems and biodiversity is so crucial and inextricably linked to achieving our climate goals,” said Sarita Gosrani, Director of ESG and Responsible Investment at bfinance. “Investing in natural capital allows investors to capitalise on strong market fundamentals and have tangible environmental and social impact on the ground.”

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