Over two-thirds of investors working on nature plan to increase their investment
LONDON, Wednesday 20th September 2023 – Over two-thirds (69%) of global investors engaged in nature investment plan to increase their investments, a new report from Pollination, the global climate and nature advisory and investment firm, has found.
Pollination’s Nature Finance Focus uncovered the attitudes of 557 institutional investors[1] in six key jurisdictions: UK, USA, Australia, France, Singapore and Japan, representing a cross-section of the global fund management industry. The investors in question are significant, with 332 respondents at firms managing over $100 billion in assets under management.
Following the Taskforce on Nature-related Financial Disclosures (TNFD) launching its framework earlier this week and growing interest in nature’s investment potential, the report reaffirms investor engagement and interest in nature-related investments.
Increasing momentum in nature related investments – with the US leading the way
The polarised nature of the responses throughout, from motivations and perceptions of risk through to expectations of returns, highlights the preliminary nature of work in the space. However, investors in all regions share the view that some, or all nature-related investments can be classified as an asset class (75%), with larger investors more likely to hold this view.
This momentum is only set to grow: US investors are already some of the most active on nature despite significant politicisation on sustainable and responsible investment in this market, and 87% of engaged investors plan to increase investments in the space, closely followed by Singapore (79%) and Australia (76%).
Many investors are looking for both returns and impact when they make investments in nature, but 23% – the second most popular answer – said they were motivated firstly by improving environmental outcomes.
Martijn Wilder, co-founder and CEO, Pollination commented, “Investing in the natural world is investing in the resilience of the economy. It’s clear that investors across the globe are starting to recognise the potential nature-related investments have for producing returns as well as reducing systemic risk, alongside protecting and improving the natural environment. But we need much more: a significant and sustained build in capability across capital markets is needed, including skills and human capital, information infrastructure and new models and norms. We need to continue to transform our global economy to avoid further damage and begin to restore nature. This has long been Pollination’s vision, and our findings in this report reinforce our hope and determination to support global capital markets on this journey.”
Global differences in perceptions of risk and activist pressure
Overall, Private Equity and Alternatives is viewed as the most exposed asset class[2], but this differs when drilling down into different regions. While PE is still cited as the most exposed asset class in the UK (46%), this is overtaken by Property and Infrastructure for Singapore (51%) and Agriculture and Forestry for the US and Australia (49% and 47% respectively).
The impact of activist pressure also ranges across the world. While only 16% of English investors cite activist pressure as a driver, half (50%) of Singaporean investors give the same answer.
Martijn Willder continued: “The TNFD’s final framework marks another step in the journey towards a nature positive future, one which will be material for companies and investors. It further clarifies the path for investors to integrate nature-related risks and opportunities into their strategies. We need to recognise this as a watershed moment; for both systems-level change, and for the nations and institutions working to transform our relationship with nature.”
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Notes to editors:
Pollination worked with Censuswide as a global research partner on this report. The research is generated from a globally informed audience of institutional investors across 6 countries – the US, the UK, Australia, Singapore, Japan and France with AUM ranging from less than US$10Bn to US$500Bn+. Working in close collaboration with Pollination on the questions, Censuswide managed an online survey. Censuswide complies with the MRS Code of Conduct based on the ESOMAR principles.
About Pollination
Pollination is a global investment and advisory firm focused on climate and nature. It designs, builds and invests in climate and nature solutions to accelerate the transition to a net-zero, nature-positive future. Established in 2019, Pollination has brought together a global team of 200 leading experts from across the climate and nature ecosystem; spanning finance, investment, technology, business, law, policy and science. Leveraging unique market insights, it supports clients to navigate the transition, and designs investment platforms and funds to meet investor needs and deliver real impact.
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[1] Over one thousand investors targeted; 557 surveyed as already investing in nature-based solutions; nature markets; technology solutions for nature; real assets with regenerative or nature promoting overlays; or responsible mining.
[2] 42% of those who consider nature as an investment opportunity and look for ways to invest directly in nature improvements, markets or solutions, or consider both nature across portfolios and nature as an investment opportunity.
