Natural Capital is moving into a new phase of consolidation and opportunity-seeking, an Environmental Finance conference has heard.
The seventh edition of the Natural Capital Investment EMEA conference brought together a record number of participants in London.
Off the stage, it was highlighted that the market is moving out of a difficult 2025 with investors more willing to take the theme seriously. One natural capital manager privately remarked to Environmental Finance that they have seen renewed interest from institutional investors – just months after many said they did not want to get involved.
It appears that work was also being done in many financial institutions behind-the-scenes to collect the right information and begin integrating this into decision-making and stewardship.
Norges Bank Investment Managers revealed that with nature data firmly integrated into its stewardship activities, it is now ready to ramp up expectations. Ashley Gorst, senior advisor at the manager for the Norwegian sovereign wealth fund, said it is working on a “refresh” of its expectation documents for nature, which will give it a “playbook” for how companies set targets.
Dutch asset manager Robeco revealed that it is looking to incorporate its biodiversity traffic light system into its index products. Launched in 2025, the traffic light system uses sector-specific indicators to compare current and future performance, based on a mix of reported data and proxy metrics.
Harry Ashman, senior engagement specialist, said this follows enquires from asset owners for biodiversity-tilted index products which overweight better performances. “In the say way that on the climate side [of investment] there is a lot of decarbonisation heavy lifting on [tilting of] portfolios, it’s an interesting angle for biodiversity”.
He labelled this as a “really nice way” of beginning to reward better performance.
Large institutional investors, which have also begun looking at the issue, are also now looking at how they can push further. Gjermund Grimsby, chief advisor for climate change at Norwegian pension fund KLP, told the event that it is currently doing a lot of work internally to “nudge the curiosity of our managers”.
The market also welcomed major developments that will help build momentum and provide more clarity – specifically the decision by the International Sustainability Standards Board to begin a standard-setting process for nature.
Richard Barker, board member for the ISSB, revealed at the conference that it is currently developing definitions for key nature aspects used in nature disclosures – including a capital-focused measure and a ‘flow measure’. It will specifically look to provide more clarity on ecosystem definitions – something which its S2 climate standard requires organisations to disclose, but it does not currently define any parameters.
It expects to finalise these definitions in May and then decide whether it will develop a specific standard or merely add these foundational elements as an appendix to its existing standards climate and sustainability standards.
Barker labelled this work as “phase one” and told the conference not to expect metrics now – although did not rule this out for subsequent phases.
NBIM’s Gorst, who sits on the board of the Taskforce on Nature-related Financial Disclosures, welcomed the standard-setting process by the ISSB, arguing this will be a gamechanger.
Meanwhile, regenerative agriculture was highlighted as a theme which has continued to see significant interest from investors despite the ESG pushback in the US.
Nature-based carbon credits also continue to emerge as a key revenue stream for land managers – particularly in forestry and timberland. Stephen Levesque, managing director of forest operations at JP Morgan Chase-backed Campbell Global, said that in recent years investors “expect more” with both cash flow diversification and community co-benefits, even if the latter does not lead to financial benefits.
The Lyme Timber Company is also looking at how it could leverage the data it has collected from Light Detection and Ranging (LiDAR) technology - which maps a portion of land with more granularity than field mapping - to carry out nature-based carbon projects.
For many, however, biodiversity credits remain off the table. While many cited the EU’s ongoing work to scale up nature and biodiversity credits – which Qarlbro Biodiversity labelled as “optimism for [a] future of market” – the nascency of the market was a barrier for many.
In the wider natural capital theme, there are some elements which also remain nascent or require significant work.
Nature stress testing remains very early stage. Anne-Claire Lejeune, director, green & sustainable hub, ESG advisory at Natixis, told the conference that this begun following the European Central Bank’s own internal stress test, but it is incredibly difficult for banks to carry out.
Gorst argued that companies are also struggling on nature target-setting and transition data, making it difficult for investors to make informed investment decisions. While he recognised initiatives such as the Science-based Targets Network, he said this remains limited in uptake, and ultimately more initiatives are not necessary.
Initiatives that are already out there must “do the things that really matter for investors and the companies that they invest in”, he said.
Emine Isciel, head of climate and environment at Storebrand Asset Management, called for more clarity on what is meant by nature transitions. “Currently we’re having a black and white discourse” for something which is not that simple, she said.
The TNFD presented its transition plan guidance to the conference – which it released at the end of 2025 – but recognised this is only a start. Emily McKenzie, technical director of the initiative, welcomed calls for more transition definitions but highlighted that this is not the role of the TNFD.
This week, the UK’s Green Finance Initiative and WWF put out preliminary work on transition guidance for nature. McKenzie was positive that this is being taken up but admitted this will be incredibly difficult, and so it’s “good that work is starting now”.
