Natural Capital Investment EMEA 2025 conference round up

The well-attended event in London highlighted that natural capital remains the ‘hot topic’ of sustainable investing but more infrastructure building is needed. Genevieve Redgrave reports

Just days after COP16 negotiators finally agreed a strategy to mobilise $200 billion of finance towards nature and biodiversity annually, Environmental Finance welcomed hundreds of attendees to the sixth edition of its Natural Capital Investment EMEA conference.

Much has changed since the first event six years ago, as the market continues to mature and financial structures become better equipped to take nature into consideration.

Reporting

This is evidenced by the rapid uptake of the Taskforce on the Nature-related Financial Disclosures’ (TNFD) recommended reporting framework. With 120 reports already published, Emily McKenzie, technical director, told the conference that it is now focusing on capacity building.

Its next phase of work also includes the development of an open-source ‘facility’ for state of nature data. Her keynote address revealed that it will present this to the G20, which is increasingly interested in the “strong investment case” for governments.

The Taskforce will also soon begin pilot testing transition plans based on the Global Biodiversity Framework with 15 organisations.

It is also helping to pilot test the Nature Positive Initiative’s consolidated state of nature metrics, which have been pulled together to help better measure ‘nature positive’ activities.

While nature-related reporting is scaling up, one panel heard how this is perhaps prioritising the wrong thing. Anupam Ravi, senior vice president of investor services at GIST Impact, argued that most nature-related financial reporting has a bias of focusing more on the business impacts of nature loss than a company’s impact on biodiversity.

He said the focus on financial materiality, rather than ‘double materiality’, “is a problem” that should be addressed by reporting organisations.

Jake Harper, senior investment manager at Legal & General Asset Management, highlighted that the burden of reporting could be a challenge for some sovereigns looking to get involved in debt-for-nature swaps.

The inability of some governments to fund post-deal reporting is a potential “hindrance” to the instrument, he argued. It would be useful to lighten the administrative burden of sovereigns engaged in these deals, he said, potentially through the development of third-party data to track debt-for-nature swap impact and generate subsequent reports.

Instruments

Despite these challenges, there was optimism about the potential of the debt-for-nature swaps to scale up.

There were also new announcements on fixed income, with the Wildlife Conservation Society saying it is looking into issuing outcome bonds, and the European Bank for Reconstruction and Development (EBRD) outlining plans to develop a blue bond with an unnamed issuer.

Maya Hennerkes, green financial systems director, told the conference that the EBRD was being “a bit careful”, however, with the label, as it doesn’t want a blue bond to be ‘gimmicky’. She said: “We want them to be real bonds with real use of proceeds”.

While a lot of what its clients want can be achieved under a standard green bond, it is engaging “where there is specific interest from a client or a specific value proposition”.

Blended finance instruments were highlighted as key to scaling up nature capital flows, particularly into nascent themes or emerging markets. Paul Horrocks, head of unit for private finance for sustainable development at the OECD, told the conference there is currently a “lot of interest in guarantees” from development banks, particularly with budgets increasingly under threat.

Carl Atkin-House, head of natural capital strategy at Climate Asset Management, similarly called for more blended finance, arguing that there is “no wrong solution”. Instead, the market needs to “get flexible”, he said, encouraging the private sector to approach the public sector with solutions – rather than waiting for them to be developed elsewhere.

Nature credits continued to be a key theme at this year’s conference – despite biodiversity credits remaining relatively nascent. While there was an expectation that the market will grow, many recognised that some key fundamentals are still to be ironed out.

Asger Strange Olesen, director at the International Woodland Company, called for a move away from a singular biodiversity metric, warning “we will end up in a bad place” if that is the outcome.

Other panellists urged corporates to begin looking at credits – relating to both carbon and nature. Many still “see it as a thing for later”, but now is the time to begin assessing how they will be part of a net zero strategy, Aberdeen’s (formerly Abrdn) head of natural capital investment, Fraser Green, told the conference.

Data

Data and measurement were also a key theme throughout the day. Whilst this is often cited as a key barrier to scaling up nature finance, panellists were positive that this is rapidly improving.

In particular, satellite data was seen as a scaling technology, which could help identify nature positive activities and track impact. Both Robeco and The Landbanking Group were keen to emphasise, however, that this must be backed with ‘groundtruth’ data.

Investors in ‘blue finance’ opportunities also explained that ocean-related data is better than is often perceived, with Fidelity arguing that “it is not an impediment” to investing in the theme.

Optimism

This optimism ran through much of the day – and into the networking areas. While the significant challenges of investing in nature were recognised, many were keen to emphasise that this shouldn’t be dwelled upon.   

As one panellist remarked “complexity is okay. It’s not necessarily a barrier” as the financial sector – and the wider economy – is well equipped to deal with complex transactions and big challenges,

And it’s increasingly clear, with every conference, that maturity is developing. Panels have moved beyond why we should care about nature and how investors can begin looking at the topic, into practical guidance and examples of successful transactions.

The key word of the day for the next phase for the market: scale.

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