New partnership looks to make investing in nature mainstream

“Investing in the resilience of nature is investing in the resilience of the economy,” one of the leaders behind the partnership says.   

An Australian-led climate change advisory and investment firm has teamed up with HSBC Global Asset Management, aiming to create the world’s largest natural capital manager that will raise funds to invest in nature.  

Pollination has entered into a joint venture agreement to establish HSBC Pollination Climate Asset Management – the first large-scale venture to mainstream natural capital as an asset class. 

Through the creation of private funds, HSBC Pollination Climate Asset Management plans to offer investors wide exposure to global natural capital in both emerging and developed markets.

Sustainable investment in natural capital includes areas such as sustainable forestry, regenerative and sustainable agriculture, water supply, and nature based bio-fuels.

Australian climate lawyer Martijn Wilder AM, a co-founding partner of Pollination, said to reach the goals set in the Paris Agreement we needed to fund new at-scale approaches that protect nature.

He said he regularly hears from investors and organisations looking for investment opportunities that mitigate long-term climate risk. 

“In natural capital, we’re accelerating investment in an asset class that can help combat climate change and build biodiversity, whilst also generating long-term returns for institutional investors,” Wilder said.

“Investing in the resilience of nature is investing in the resilience of the economy. Nature is the most fertile investment we have.”

These proposed funds aim to attract capital from institutional investors, including sovereign wealth funds, pension funds and insurers. 

The first fund aims to launch mid next year and will look to raise up to US$1 billion (A$1.35 billion), followed by a carbon credit fund at up to US$2 billion (A$2.7 billion). 

Wilder told Pro Bono News we must start investing in nature, because without a healthy nature we won’t have a healthy economy.

“This is an asset class that hasn’t been given enough focus or attention. And we really need to start doing a lot more to change this,” he said.

“By investing in these areas, we ultimately can ensure that farming is done in a more sustainable way so that everything we do is in a way that’s more aligned with protecting nature, as opposed to destroying it.”

Wilder said not only was investor appetite for this project strong, it had not been dented by the ongoing COVID-19 pandemic.

Conversely, he said the crisis had just strengthened the resolve for people to invest ethically.

“All the feedback that we’ve had in developing this has been really positive,” he said.

“COVID-19 has just reinforced how important natural capital is and how important it is to do things for the environment and protect the planet on which we live.”

Nicolas Moreau, the global CEO of HSBC Global Asset Management, said clients were increasingly focused on environmental matters.

He said this initiative was designed to help them achieve a financial return, while also creating a positive impact on the world’s biodiversity which will be felt for generations to come.

“Through solutions such as this, we’re helping clients achieve their long-term investment objectives, while meeting their increasing demand to actively contribute to a more sustainable world,” Moreau said.