Nature Finance: Investing in the Living World

Nature finance focuses on supporting assets and businesses that conserve or otherwise benefit nature, which is incredibly important in today's global economic context: 50% of global GDP is moderately to highly dependent on nature. It is an emerging but important opportunity that can help mitigate climate change and move crucial funding towards environmental sustainability.

Why This Matters

• There is a large nature finance gap between the $7.3 trillion invested in activities that damage nature and only $220 billion towards nature-based solutions. The annual nature finance gap is $711 billion until 2030.

• To prevent nature from breaking down, investment needs to rise to between $898 billion and $1.2 trillion yearly by 2030. This massive investment would not just benefit our environment, but it could create up to 395 million jobs and have a monetary value from ecosystem services and revenues from nature solutions of over $200 trillion.

Through case studies spanning investment vehicles, regenerative agriculture, conservation enterprises, and biomimicry‑driven design, this blog will demonstrate how financial mechanisms and nature‑based solutions can close the multi‑trillion‑dollar nature funding gap, generate measurable environmental and social outcomes at market rates, and inspire systemic shifts in how economies value and interact with the natural world. The following case studies exemplify the rapidly evolving landscape of nature finance and nature‑positive business models by illustrating how capital, innovation, and ecological insights are converging to address global environmental degradation.

Nature Finance: Examples

Insects and the economy don’t appear to have much in common; however, insects' contribution to pollinating the earth’s crops accounts for approximately $500 billion yearly. Scientists make these economic calculations to focus attention on the variety of crops and other plants that rely on insects year-round.

In fact, global economic trade depends on insects: The total value of annual exports highly dependent on insects is $202 billion, making up 0.7% of total global trade -- a value greater than the GDP of 154 nations.

Responsible Alpha's analysis of U.S. exports data from 2021 reveals that the U.S. is the world's largest pollinator-dependent exporter globally at $16.17 billion dollars in 2021. This $16.17 billion in total pollinator-dependent exports exceeds the individual export values of aircraft parts, beef, and medical appliances, demonstrating the strategic importance of these trade flows within the US export portfolio.

HSBC and the Pollination Group co-founded Climate Asset Management to start a focus on natural capital financing in 2022. Some funds under this management have since closed in 2024 but were able to raise over $1 billion dollars in the short time they were open.

These funds focus on regenerative agriculture, sustainable forestry, carbon credit generation, and biodiversity, and the projects they support cover 2 million hectares around the world. The Natural Capital Fund concentrated on regenerative agriculture and sustainable forestry, while the Nature-based Carbon Fund worked on landscape restoration and generated conservation carbon credits. Apple’s Restore Fund combined both focuses to support Apple towards their Net Zero goals by allowing carbon removals to offset supply chain emissions that would be costly and difficult to abate.

HBSC also launched an ESG Biodiversity ETF, the first ETF to track the Euronext ESG Biodiversity Screened World USD Index. The goal of this fund is to allow investors to learn how to implement biodiversity considerations into their investments. The ETF has strict filters and is composed of 500 companies with the highest Corporate Biodiversity Footprint and Sustainalytics ESG risk score. The ETF will update the screening tools as analysis improves. The conservation and sustainability outcomes are possible due to the money that these funds generated, and the awareness created by the ETF.

The Regenerative Agriculture Fund (RAF) is a €1 billion private equity impact fund with a performance-based structure, launched by Unilever, AXA, and Tikehau in 2022. Its purpose is to expand regenerative farming around the world, specifically targeting Brazilian and Belgian agribusiness and agricultural tech companies. Environmentally, the RAF is committed to soil health, sustainability of ingredients, and advancing technological solutions.

The private equity fund started with €300 million from its founders and has a goal to reach €1 billion. It benchmarks itself with corporate capital for reduced risk to attract large investors. Its performance is based on an even split of investor returns of environmental projects and financial returns. One of the first big investments of this fund was €120 million in 2023 into BioFirst Group, a pest control and pollination service in Belgium. This funding allowed for the acquisition of another company focused on crop nutrition and protection to support biological solutions to make farming more sustainable.

For BioFirst Group, toxicity of pesticides and CO₂ reductions were evaluated to ensure the bio-based pesticides were having a positive impact on the environment. The performance-based structure of the fund leads to priority of short-term projects where impacts are seen quickly over long-term projects that make larger impacts. Funding projects with lagging results remains a challenge; however, the RAF supports a sector that requires large initial investments and makes regenerative agriculture progress possible.

Ørsted issued a blue bond in 2023, becoming the first energy company to do so when they raised €100 million at a 3.625% fixed coupon to fund improving offshore biodiversity and sustainable shipping. The bond is structured as a use-of-proceeds thematic bond with key investors including APG. The bond’s funds are ring-fenced for offshore biodiversity, marine ecosystem health, and sustainable shipping. 

The bond’s integrity is supported by rigorous monitoring, reporting, and verification using GPS, LiDAR, and acoustic monitoring. The bond followed International Finance Corporation’s (IFC) Blue Finance Guidelines.

Ørsted’s blue bond demonstrates that investors can invest in blue finance delivering investable nature-positive outcomes.

Nature Business: Repairing at the Source

Another avenue of environmental solutions is creating businesses that look to conserve, protect, and restore nature. These companies generate revenue through activities that are beneficial to nature. This goes beyond offsetting or implementing environmental solutions to curb emissions. Two examples of nature businesses are Bureo and the Coral Restoration Foundation.   

The company Bureo started a program called Net Positiva that uses discarded fish nets to make a material that can be used for other companies' products. Fishing gear is dumped but also gets snagged and lost in oceans due to weather and improper practices by fishermen, which kills fish and generates 70% of ocean microplastics.

The very first product made with Bureo's NetPlus material is a skateboard deck called The Minnow. Source: Session Magazine.

The environmental impact that this initiative can be massive as plastic waste in waterways remains a huge challenge, and fishing nets are a major source of damage to aquatic ecosystems. Once collected and diverted, the nets are sent to recycling facilities and transformed into nylon pellets that can be molded into new products. The company calls the material NetPlus® and it has been used in 5.1 million products in 2024 including jackets, activewear, swimsuits, hats, skateboards, surfboards, and sunglasses. 

Their work has resulted in millions of pounds of fishing nets that Bureo diverted from waterways and landfills while engaging communities and educating stakeholders about proper disposal and best practices.

 As of 2023, Bureo has collected over 15 million pounds of fishing nets and partnered with large companies like Trek, Jenga, and Patagonia. This long-term sustainability program has made a huge impact targeting the source of water pollution and shows that circular economy materials can scale and support communities.

The Coral Restoration Foundation (CRF) in the Florida Keys works on the restoration of five coral nurseries and is the largest of its kind in the world. Anthropogenic causes have destroyed 95% of coral in the reefs that CRF works to restore. Agriculture, scuba diving, tourism, disease outbreak, fishing operations, ocean acidification, and sewage discharge are all factors that pose threats to the coral in Florida.  

Coral reefs play important roles as homes for many marine organisms, coastal barriers during extreme weather, and provide ecosystem services that are valued at $8.5 billion. The CRF worked with coral under the Endangered Species Act. Volunteers carry out much of this work, and the work is funded through grants, corporations, and donations. This work faces many challenges such as educating stakeholders, so they understand how effective their outplanting work is, hurricane destruction, fundraising, and permitting. Despite the obstacles, CRF has been able to return 100,000 corals to the reefs, restore 5,000 m² of reefs, and outplant 74,000 plus corals. For longevity, increasing funding is needed as it is a costly operation, and to address the whole reef track in Florida. Currently, there is only partial funding available from the government. 

Beyond finance and restoration, biomimicry is a design approach that looks to nature for ideas on how to design better and more sustainably. Janine Benyus, who coined this idea, emphasizes that humans have only been on this planet for a limited time, and we should consult nature and its organisms for solutions because they have lived sustainably for billions of years. This concept has gained popularity -- in 2024 it was worth $8.3 million, and it is projected to continue to grow at 11% per year. 

Two notable examples of biomimicry in action are the Eastgate Centre in Zimbabwe and Japanese Bullet trains. Both designs looked to animals for inspiration on how to create sustainable and energy efficient structures that solve problems such as AC emissions and noise pollution.

The Eastgate shopping centre in Harare, Zimbabwe. Its design is famously inspired by the ventilation of termite mounds. Source: The Earthbound Report

In Zimbabwe, the Eastgate Centre building in Harare used passive cooling ideas from termite mounds to regulate the temperature in the building without air conditioning. Air conditioning has a significant environmental impact, forming 3% of global carbon emissions, so looking at natural cooling methods reduces environmental harm. Eastgate mimics the structure of termite mounds, which are warmed by the sun during the day; when temperatures fall at night, the warm air moves up and out, and cool air comes into the structure. The building has brick chimneys that facilitate the movement of warm air upwards and underground gaps that hold cool air and let it into the building when needed. This temperature regulation method reduces energy use by 90% and is an example of an urban innovation that is sustainable by design using biomimicry.  

The Shinkansen bullet trains in Japan initially had a noise problem when coming out of tunnels, but the designers looked towards nature to solve this issue. They noticed that kingfishers-- a type of bird-- can enter water without making a loud splash in order to effectively catch fish to eat. Newly designed trains now imitate the kingfisher’s beak in the nose portion, which allows the trains to travel 10% faster. This innovation reduces noise pollution around the trains that harmed nearby ecosystems and improved aerodynamics contributed to 15% increased energy efficiency.

The new Shinkansen design compared to a Kingfisher. Source: UX Collective

Bringing It All Together

Nature finance, nature business, and biomimicry all tell the same story: we can redesign economic systems to work with nature instead of against it without relying on concessionary financing. Financial mobilization makes nature-based solutions possible, businesses can repair ecosystems and create revenue from sustainability, and biomimicry inspires new ideas for sustainable design. Together, they can create a net-positive economy where investment, companies, and environmental health can coincide instead of clashing. 

Take Action

• Asset Owners: Direct capital towards funds that benefit ecosystems and nature and prioritize long-term environmental goals.

• Corporations: Redesign business models to support nature-based solutions and adopt biomimicry practices into all parts of operations. 

• Policymakers: Incentivize nature-positive investments and support policies that allow for long term recovery over short term outcomes. 

• Consumers: Support nature businesses with your dollars.

Thumbnail image: Cole Freeman on Unsplash.