Nature is regenerative by nature. It provides the water we drink, the oxygen we breathe and the food we eat. It regulates our climate, our oceans and our landscapes. It is our pharmacy and our wisest doctor. Nature is unity in diversity, meaningfully connecting all living things on our planet. Nature is the basis for human life. 

    Our natural capital is the very foundation of our economy. 

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    Nature is unity in diversity, meaningfully connecting all living things on our planet. Nature is the basis for human life

    economic heartbeat.

    Understanding the nature dependencies of our economy is the first step in valuing natural capital. A recent pwc1 report examining 19 large stock exchanges concluded that more than half the market value of listed companies is subject to nature-related risk, due to their dependence on nature. The same report estimated that 55% of global GDP—equivalent to about USD 58 trillion—is moderately or highly dependent on nature. The European Central Bank estimates that 75% of bank loans within the eurozone are to firms that are highly dependent on nature’s free ecosystems services.2

    For some sectors, the “free” ecosystems services that nature provides are critical. Farmers around the world, for instance, rely on pollinators to boost crop yields – researchers estimate that pollinating insects provide an ecosystems service worth up to USD 577 billion each year3, the equivalent of one tenth of the value of total world agricultural food production4

    Other ecosystems services cut across sectors. The World Wildlife Fund estimates the total asset value of the world’s oceans at USD 24 trillion – this includes the fish they provide, the transport they enable, and the carbon they absorb.5  Meanwhile, mangrove forests are so important for protecting coastlines that they are estimated to prevent tens of billions of dollars in damage to property each year.6

    Nature is the heartbeat of our economy.

    under threat.

    Today, however, nature is in peril. Our society extracts around 100 billion tonnes of natural resources from Earth every year.7 At the same time, we produce approximately 70 billion tonnes of waste annually, over half of which is in the form of emissions and untraced waste and pollution.8 And much of that extraction and waste goes to creating products that add only short-term value and sit idle for most of their lifespan.

    Over a third of the world’s soils are moderately to highly degraded due to erosion, salinisation, compaction, acidification and chemical pollution9, according to the FAO. For agriculture this is combining with a global decline in the number of pollinating insects – caused by habitat loss and overuse of pesticides10 – to threaten long-term yields.

    Together, agricultural expansion, deforestation, climate change and agro-chemical pollution are putting 1 million species at risk of extinction.11 This loss of biodiversity undermines entire ecosystems. Tropical rainforests, for instance, absorb carbon, give us essential medicines and dictate rainfall patterns well beyond their borders. But forests can’t exist in isolation – the multitude of insects, birds, and mammals that pollinate and spread seeds are as important as the trees themselves. 

    We have already breached six of the nine planetary boundaries12 identified by science as underpinning environmental stability. As we push past these limits – such as ocean acidification, climate change, biodiversity loss and deforestation – these boundaries interact, creating cascades that reach across multiple systems. Many of these boundaries are now on the threshold of long-term, potentially irrecoverable, tipping points. 

    We must move from an extractive economy to a regenerative, nature-positive economy. Instead of exhausting our planet’s finite resources we must harness nature’s ability to create self-sustaining value. 

    This transformative shift is already underway through deep system changes. In energy, we are transitioning to zero-carbon renewable electricity in place of the extraction and burning of fossil fuels. In materials, we will turn to regenerative nature-based alternatives to replace the non-biodegradable materials we use today. And in agriculture, we will move towards regenerative farming methods whilst restoring land to nature.

    nature as an asset class.

    Increasingly, the international community is recognising the vital role of nature and biodiversity in tackling the climate challenge. At 2021’s COP26 more than 100 world leaders, together representing around 85% of the world’s forests, pledged to end deforestation. A year later, delegates at the COP15 UN Biodiversity Conference reached a landmark agreement to protect 30% of all land and ocean environments by 2030.

    This growing international focus on preserving and restoring natural landscapes is creating new alternative asset classes based on nature itself.

    Real-world nature-based assets will command an investment premium. In Ghana, for example, since 2019, a government-led programme has helped farmers to plant shade trees across underperforming cocoa plantations, turning monocultures into agroforests and pushing back the tide of deforestation. The result has been a spectacular crop yield increase of 50%, as soils have been renourished and the shady conditions favoured by pollinating insects have returned. The benefit to the farmers has been threefold. In addition to the higher yields, their cocoa now sells at a premium to buyers with zero-deforestation supply chain commitments, and their income is further boosted by payments from the World Bank’s Forest Carbon Partnership Facility – in effect, carbon credits for turning degraded land into net carbon sinks.

    This is an example of the nature premium. As ecosystems are restored, the underlying value of land will rise, yields will grow, the value of the regenerative commodities produced will exceed that of conventional production, and newly restored landscapes will attract carbon or other nature-based credits. 

    investing in nature.

    At Lombard Odier, we believe that nature is currently the world’s most underpriced asset class, but that corporate demand for regenerative commodities – those produced in harmony with nature – will drive the biggest revaluation of this century.

    Investors are currently under-pricing the climate risk. Through holistiQ, our unique partnership with systems change firm Systemiq, we take a science-based approach to identify opportunities for nature-based investment, offering investors the chance to achieve long-term returns and minimise the climate risk of their portfolios.

    As a multitude of innovative new opportunities for nature-based investments arise, the thread common to all will be that healthy ecosystems are worth far more than degraded ones…

    According to UN projections, nature-based solutions can provide necessary carbon sequestration and other climate mitigation measures needed to meet the Paris temperature target by 2030.19 We believe this will only be achieved if we invest in nature, valuing it not for what we can extract, but for its regenerative power. Furthermore, we must work hand-in-hand with indigenous communities, whose ancient wisdom plays a vital role in preserving healthy ecosystems. In Brazil’s Atlantic forest, for instance, deforestation has been shown to slow or even reverse as indigenous land rights are strengthened.20

    As a multitude of innovative new opportunities for nature-based investments arise, the thread common to all will be that healthy ecosystems are worth far more than degraded ones, and that we will maximise economic value not by exploitation, but cooperation with nature.

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    ECB warns that nature loss is major financial stability risk | World Economic Forum (
    Overview of Bee Pollination and Its Economic Value for Crop Production - PMC (
    Do the costs of the global food system outweigh its monetary value? (
    World Oceans Day: Visualizing the human impact on the ocean economy | World Economic Forum (
    The miracle of mangroves for coastal protection in numbers (
    Circularity Gap Report 2020 - Insights - Circle Economy (
    Circularity Gap Report 2020 - Insights - Circle Economy (
    Status of the World's Soil Resources: Introduction (
    10 A global-scale expert assessment of drivers and risks associated with pollinator decline | Nature Ecology & Evolution
    11 World is ‘on notice’ as major UN report shows one million species face extinction | UN News
    12 Earth beyond six of nine planetary boundaries | Science Advances
    13 Quantifying Carbon Fluxes in the World’s Forests | World Resources Institute (
    14 Forests, desertification and biodiversity - United Nations Sustainable Development
    15 How much carbon does the ocean absorb? | World Economic Forum (
    16 Why bees matter (
    17 World is ‘on notice’ as major UN report shows one million species face extinction | UN News
    18 Chronic land degradation: UN offers stark warnings and practical remedies in Global Land Outlook 2 | UNCCD

    19 ipbes_global_assessment_report_summary_for_policymakers.pdf
    20 Formalizing tenure of Indigenous lands improved forest outcomes in the Atlantic Forest of Brazil | PNAS Nexus | Oxford Academic (

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