Biodiversity & Natural Capital: where pension funds are and what comes next

Pensions for Purpose’s natural capital research paper, commissioned by the Palladium Group, examines how asset owners are approaching natural capital investments. For many, this remains a relatively new asset class. Nevertheless, the fact that most of our interviewees have initiated allocations within the past two years – driven primarily by the diversification benefits natural capital can offer, its inflation-hedging characteristics and its natural fit within private markets portfolios – demonstrates increasing momentum in this space. Asset owners with long term allocations have also begun to expand their exposure beyond forestry, often mentioned as the ‘entry point’, indicating a maturing approach to nature across the industry.