Data snapshot: Current trends in nature investment

Published in New Private Markets

Nature-based Solutions and nature markets are the most interesting areas for institutional investments, per a Pollination survey.

The majority of interested institutional investors view nature as a distinct asset class, according to a survey from Pollination.

Launched in 2019, Pollination is an asset manager and venture capital firm focused on natural capital. To compile the report, the firm identified 557 institutional investors from the US, UK, Australia, Singapore, Japan and France that were “thinking about or working on nature”, and asked them a series of questions relating to their strategy and perception of the market.

A strong majority (75 percent) of respondents agreed that nature-related investments form a separate asset class, with larger investors more likely to be of this view.

Respondents’ perception of the opportunities offered by investing in nature varied significantly, though a minority (18 percent) were solely motivated by short-term financial returns. Most investors cited a need to accept lower returns in the near term in exchange for either reducing risks in their portfolios or delivering improved outcomes for nature.

The survey also revealed regional variation in investors’ areas of interest. For example, though only 32 percent of investors across all regions cited responsible mining as an area they were looking at, country-specific figures varied from over 40 percent in Japan to just over 20 percent in the UK.

Overall, investments in nature opportunities are more prevalent among Australian respondents (61 percent said they currently have exposure to such investments), closely followed by Singapore (54 percent) and the US (53 percent). Exposure was less common (40 percent) among respondents from France.