Five reasons to include biodiversity in your portfolio
Institutional investors have embraced carbon as an asset class. Now biodiversity is stepping into view - and with it, an opportunity to diversify, protect value, and deliver measurable impact. For investors looking beyond short-term market cycles, biodiversity is no longer peripheral, it’s becoming essential.
aHere are five reasons why biodiversity deserves a place in your portfolio.
1. Protecting asset value in a nature-dependent economy
The World Economic Forum estimates that $44 trillion of global GDP (more than half the world’s economy) is moderately or highly dependent on nature. Sectors from agriculture to real estate, mining to manufacturing, are exposed to risks when ecosystems degrade. Pollination, soil fertility, water security, and climate regulation are not “nice-to-haves”, they are underlying assets.
Investing in biodiversity is fundamentally about risk management. By allocating capital into biodiversity credits, projects, or funds, investors are hedging against systemic risks that could otherwise undermine entire industries.
2. Diversification beyond carbon
Carbon markets are now well-established, with corporate demand driving billions of dollars in transactions. But carbon tells only part of the story. A tonne of carbon reduced or sequestered doesn’t capture the health of ecosystems, species, or water systems.
Biodiversity investments complement carbon. They capture the complexity of nature, delivering outcomes that carbon credits alone cannot. For investors, this means access to a new, differentiated asset class - one that moves beyond a single metric to a portfolio of ecological outcomes.
3. Regulatory and market momentum
Policy is moving fast. The Kunming-Montreal Global Biodiversity Framework commits 196 countries to halt and reverse biodiversity loss by 2030. There are now 40+ operational biodiversity compliance markets around the globe, including in the USA, Australia, France and the UK. National schemes are scaling: the UK’s biodiversity net gain (BNG) market launched last year, while Australia’s NSW Biodiversity Offsets Scheme already trades in the hundreds of millions. More than 100 countries have adopted ‘no net loss’ policies, so many more biodiversity offset markets are expected to follow.
The voluntary market is also emerging. The Taskforce on Nature-related Financial Disclosures (TNFD), Science Based Targets Network (SBTN) and others are embedding nature risk into corporate reporting. Biodiversity markets and other opportunities for investment provide the vehicle for corporates to act on these reports and move towards ‘nature positive’.
These market trends mean that investing into nature is no longer abstract. They point to a future where capital can be invested - whether through compliance obligations, voluntary leadership, or new investment vehicles - to deliver important benefits for the world’s biodiversity.
4. Early mover advantage in an emerging asset class
History shows that early entrants into new markets capture outsized returns and influence. Carbon is one example: those who moved first shaped standards, secured prime project exposure, and built reputational capital.
Biodiversity is now at a similar inflection point. Investors who participate early not only position themselves for financial upside but also gain a seat at the table shaping market rules, standards, and integrity frameworks.
5. Tangible impact with measurable outcomes
Unlike broad ESG allocations, biodiversity investments deliver direct, verifiable outcomes. Credits are tied to specific ecological uplift — restored wetlands, protected habitats, species recovery. Funds can report on hectares protected, species supported, or connectivity restored.
For investors increasingly under pressure to demonstrate both impact and return, biodiversity provides a rare dual benefit: measurable ecological outcomes alongside financial performance. It is not just compliance — it is contribution.
The bottom line
Biodiversity is no longer confined to conservation NGOs or CSR departments. It is becoming a serious, investible asset class. For high net worth and institutional investors, the rationale is clear:
It protects existing assets.
It diversifies portfolios.
It leverages existing regulatory markets and helps drive voluntary market demand.
It offers first-mover advantage.
And it delivers tangible, verifiable impact.
The question is no longer whether biodiversity will become part of institutional portfolios — but who will move first, and who will follow.
References
Environment and Heritage - NSW Government. (2024). Understanding the Biodiversity Credits Market. https://www.environment.nsw.gov.au/topics/animals-and-plants/biodiversity-offsets-scheme/biodiversity-credits-market/understanding-biodiversity-credits-market
European Commission. (2025). Global Biodiversity. https://environment.ec.europa.eu/topics/nature-and-biodiversity/global-biodiversity_en.
Nature. (2024). How Biodiversity Credits Could Help to Conserve and Restore Nature. https://doi.org/10.1038/d41586-024-03475-2
Oryx. (2025). Biodiversity Credits: A New Currency to Support Nature Conservation? https://doi.org/10.1017/s0030605324001467
TNFD. (2025). TNFD – Taskforce on Nature-Related Financial Disclosures. https://tnfd.global/
Resources, Conservation and Recycling (2022). Overcoming Barriers to Supply Chain Decarbonization: Case Studies of First Movers. https://doi.org/10.1016/j.resconrec.2022.106536
UK Government. (2024). BNG Launch Date Confirmed - Environment. https://defraenvironment.blog.gov.uk/2024/01/18/bng-launch-date-confirmed/
World Economic Forum. (2024). Biodiversity Credits: Demystifying Metrics for Nature Markets. https://www3.weforum.org/docs/WEF_Biodiversity_Credits_2024.pdf
World Economic Forum. (2020). Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy. https://www3.weforum.org/docs/WEF_New_Nature_Economy_Report_2020.pdf
