Head of Nature Investing David Sternlicht breaks down what we stand to gain by valuing nature as an asset class.
Head of Nature Investing David Sternlicht breaks down what we stand to gain by valuing nature as an asset class.
by David Sternlicht
In our most recent installment of our Valuing Nature Series, Head of Nature Investing David Sternlicht broke down what humanity stands to lose should we not invest in nature. This week, we look at the flip side of the coin by examining what could be gained if we make the shift to valuing nature as an asset class.
To start, nature is in crisis. A 2022 World Wildlife Fund report found an average decline of 69% across tens of thousands of wildlife populations since 1970. That being said, investors can make an enormous impact on this issue. Currently, annual funding for biodiversity and nature protection is $166 billion globally, with the lion’s share (76%) stemming from government funding. But the financial industry is extremely well funded – the size of the professionally managed assets market is $100 trillion. That means that even 1% of this market could bridge the entire nature financing gap. And investors can not only mobilize a larger pool of funding but also implement it more quickly, both locally and globally.
Here are some main takeaways from this episode:
Urgent Need for Investment: There is a pressing need for investment in nature conservation. A 2022 World Wildlife Fund report revealing a staggering 69% average decline across tens of thousands of wildlife populations since 1970.
Opportunity for Investors: This is a solution investors can scale by supporting projects and businesses that regenerate ecosystems and protect biodiversity while delivering financial returns.
Opportunity for Advisors: Educating clients on these investment opportunities can help them understand how nature is impacted by their portfolios, hopefully leading to an influx of private capital that scales consistently and rapidly.
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