Investing in nature-based solutions

Nature-based solutions: a growing opportunity for natural capital investors

For several decades, natural capital as an asset class has become an increasingly important part of institutional portfolios. Investors in the asset class, notably in timberland and farmland, have come to appreciate and value the wide range of potential benefits that natural capital can bring to an investment portfolio. This includes traditional investment benefits, such as diversification, inflation hedging, and attractive potential returns with stable cash yields¹ — as well as sustainability benefits.

Over the last few years, the asset class has evolved, driven by the convergence of critical global trends. Natural capital is increasingly recognized for its ability to provide solutions to address today’s environmental and societal challenges — climate change, biodiversity loss, pollution, food security and land degradation. At the same time, there have also been increasing levels of government action, growth in environmental markets, and growing maturity of assets and business models which aim to tackle these challenges. These trends and the evolution of the asset class are providing opportunities for investors to benefit from diversified investment strategies and exposure to maturing environmental markets, while contributing to improvements in biodiversity, climate, and sustainable production of food, fiber and timber.

Topics discussed

• Defining nature-based solutions investments
• Understanding the financing gap and growing opportunity for private capital
• Examining the powerful tailwinds enhancing and supporting growth of the asset class
• Exploring three opportunities for nature-based solutions investment strategies that aim to balance financial returns with environmental impact
• Discovering the distinct portfolio and asset-level benefits
• Nuveen's approach to nature-based solutions and key investment principles