What is Natural Capital
Natural capital refers to the world’s stocks of natural assets including air, water, soil, minerals, and biodiversity on which the global economy depends and that enables life on Earth. While not new, it is emerging as a critical asset class due to its direct influence on economic activity including agriculture, forestry, water management, and energy production given the current climate and environmental challenges we face. Although the global food system is entirely dependent on natural capital, leading investors are only now beginning to assess and mitigate those real risks across their portfolios.
In March, the Norwegian sovereign wealth fund—guardian of $1.6 trillion in assets—placed 96% of its entire portfolio under natural capital risk assessment. As the world’s largest sovereign wealth fund, this move confirms what TIFS has long known–the future of finance lies in valuing the ecosystems that underpin our economy.
Just weeks before, Goldman Sachs Asset Management announced the creation of a new biodiversity bond fund, which it called “one of the first fixed income funds” to allow investors to seek portfolio exposure to biodiversity conservation and remediation, and BlackRock, the world’s largest asset manager, officially recognised that natural capital must be integrated into its investment models.
This is just the beginning of an industry’s reimagining of what it means to invest in natural assets as scarcity and uncertainty become increasingly central to the conversation. Natural capital was a critical focus at TIFS’ founding and continues to guide our innovative work including in:
*Systemic Investing Assessment Tool (Natural Capital Risk Assessment in Food Systems Investing)
*The Missing Middle of Food Systems Investing (Closing the gap between investable capital and investable opportunities)
— Food Systems Dialogues for Investors
— Missing Middle of Food Systems Investing Engagement Series
— Prototyping Place-Based Solutions for the Missing Middle
*Food Systems and Natural Capital Knowledge Creation and Publications
— Financing for Regenerative Agriculture
— Food Systems Investing in East Africa: The roles of funds in financing food systems transformation
— Mobilizing Money & Movements: Creative finance for food systems transformation
What’s Next
Natural Capital and Food Systems – Investor Cohort Learning Labs:
As an extension of our long-running Missing Middle of Food Systems Investing program, TIFS convened and facilitated the first of our new “Natural Capital” workshops in Brussels, Belgium on February 25, 2025 immediately preceding the Regenerative Food Systems Investment, Europe conference – a convening to catalyze investment in Europe’s regenerative agriculture & food sector.
This private session was attended by a dozen of the world’s leading natural capital asset owners and asset managers with a combined AUM of $6+ trillion. Several key discussion topics during the workshop included:
- Understanding Natural Capital in Investment Decisions
- Natural Capital on the Balance Sheet
- Deal Flow and Investment Opportunities
- Pre-Competitive Learning and Engagement
The session generated significant interest toward advancing the integration of natural capital into investment decision-making. Participants agreed that sustained learning and engagement are crucial toward scaling natural capital investments and generating long-term value for both the economy and the environment. TIFS is committed to supporting ongoing collaboration and actions to advance this work in areas related to our core expertise at the intersection of natural capital and food/ag systems investing.
The workshop was followed two days later at the RFSI Europe conference in Brussels where David Bennell from TIFS moderated a natural capital plenary session with leading experts from HSBC, Nuveen Natural Capital, and Pegasus Capital Management. It generated a lively discussion around understanding and managing the business impacts and dependencies of natural capital and creating nature-based investable opportunities that drive long-term value creation and help create more sustainable and resilient companies and communities.
If you’re interested in exploring a conversation about natural capital and food systems transformation, please reach out to Rex Raimond (rraimond@tifsinitiative.org) and David Bennell (dbennell@tifsinitiative.org).
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