How emerging nature-positive business models can unlock attractive returns for investors as well as delivering on global climate and nature goals.
The business opportunity in nature-positive models is clear and is growing: nature-positive transitions in the food, land and ocean use sector alone could create almost $3.6 trillion of annual additional revenue or costs savings while creating 191 million new jobs by 2030. However, with over 80% of capital deployment in nature coming from public funding, private finance must be mobilized at scale for investments in nature if we are to meet the twin climate and nature global emergencies.
By investing in nature-positive funds with specialist asset managers, investors can access technical expertise, robust environmental and social (E&S) processes tailored to the sector, and tailored impact measurement and monitoring; spread risk across multiple projects, geographies and/or revenue streams; deploy larger ticket sizes compared to direct investments, and effectively achieve impact at scale.
An analysis of 169 nature-positive funds undertaken by the MFF LCIP team has indicated that the number of nature-positive funds launched from 2004 to 2023 has been growing year-on-year, a clear sign of increasing demand and scale for investors wanting to invest in the space. Recent years have also shown an evolution of nature-positive funds in terms of market maturity, with fund sizes growing and an upward tick of investment tickets.
This briefing paper by MFF LCIP provides an overview of the current nature-positive funds marketplace and the opportunities available to investors looking to enter the nature market by placing fund-level investments. It is not intended as investment advice and does not claim to be a conclusive list, but rather provides a baseline understanding of the nature-positive fund market to guide investor research as they develop their own investment strategies.
Mobilising Finance for Forests (MFF) is a UK Government funded blended finance investment program that aims to combat deforestation and other environmentally unsustainable land use practices contributing to global climate change. Delivered by FMO, MFF investments will, over time, contribute to a reduction in deforestation rates by stimulating the growth of private sector investment in markets that create value from standing forests and incorporate forest protection into sustainable agricultural practices.
As pressure to mitigate and adapt to the climate and nature emergencies continues to intensify, nature-positive funds are a key vehicle for investors to deploy capital at scale and unlock attractive returns, as well as deliver on global climate and nature goals.
According to recent MFF LCIP analysis of 169 funds, the number of nature-positive funds launched from 2004 to 2023 has been growing year-on-year, a clear sign of increasing demand and scale for investors wanting to invest in the space. The “Nature-positive funds: an introduction for investors” paper aims to provide an overview of the current nature-positive funds marketplace and the opportunities available to investors looking to enter the nature market by placing fund-level investments.
Whilst not investment advice or a conclusive list, the guide provides a baseline understanding of the nature market from a fund-level perspective to guide investor research as they develop their own investment strategies. Access the guide here.
Mobilising Finance for Forests (MFF) is a UK Government-funded blended finance investment program which aims to combat deforestation and other environmentally unsustainable land use practices that contribute to global climate change. With an initial €178 million (£150 million) commitment from the UK Government, MFF aims to catalyze €1 billion of private sector investment into forestry and sustainable land use projects.