How to invest in biodiversity: Five pathways for investors

Biodiversity is moving from policy to portfolios. For investors, the opportunity is no longer abstract; markets are forming, frameworks are in place, and capital is beginning to flow. The question is how.

Unlike carbon, where credits are the dominant entry point, biodiversity offers a wider set of investment pathways. Here are four of the most relevant for high net worth and institutional investors.

1. Biodiversity credits

The most visible entry point is biodiversity credits - verified units that represent measurable ecological uplift, such as restored habitat or improved connectivity. Credits are already trading in compliance markets (NSW Biodiversity Offsets Scheme, UK Biodiversity Net Gain, US markets) and are emerging in voluntary frameworks for corporates seeking nature impact.

For investors, credits can be purchased directly, held for appreciation, or retired as part of an impact allocation. They are place-based, differentiated assets tied to real ecological outcomes.

2. Real asset ownership and stewardship

Another pathway is direct investment in real assets such as land or forests. By acquiring and managing land for conservation or restoration, investors can generate biodiversity outcomes over time, and in some jurisdictions, credits or offsets.

This approach suits investors seeking exposure to real assets with embedded natural capital value. Returns can come through credit issuance, eco-tourism, sustainable agriculture overlays, or future regulatory incentives. Critically, long-term stewardship creates both financial and ecological durability.

3. Direct project investment

Beyond land, investors can back specific biodiversity projects, from wetland restoration to corridor re-establishment. These are often structured as project finance or blended vehicles, with returns linked to the sale of credits, grants, or impact-linked loans.

Direct project investment allows capital to flow straight into measurable interventions. It also offers investors the ability to target geographies or ecosystems of strategic interest, whether for portfolio diversification or alignment with supply chain exposures.

4. Funds and vehicles

For those seeking diversification and scale, fund structures are emerging to pool biodiversity investments. These vehicles spread risk across multiple projects or credit types, provide professional management, and increase liquidity compared to single-asset exposure.

Examples include biodiversity-focused natural capital funds, blended finance structures combining concessional and private capital, and hybrid vehicles that integrate biodiversity with carbon or water outcomes.

For HNW investors, funds can provide a practical way to allocate to biodiversity without needing to underwrite individual projects.

5. Venture investment into biodiversity companies

The growth of biodiversity markets is creating a new wave of venture-stage companies — from monitoring technologies (eDNA, remote sensing, AI) to exchanges, registries, and credit-issuance platforms.

For investors with a higher risk appetite, backing these companies offers exposure to the infrastructure and tools that will underpin biodiversity markets globally. As with early movers in carbon registries or offset platforms, the upside can be significant if these firms become market standards.

This pathway is less about direct ecological outcomes and more about enabling the systems that will scale biodiversity as an asset class.

Key considerations for investors

Whichever pathway you choose, several considerations apply:

• Quality and integrity – As with carbon, not all credits or projects are equal. Look for additionality, permanence, strong verification, and transparent reporting.

• Liquidity and time horizon – Credits can trade in active markets, but land and projects require longer-term commitment.

• Regulatory alignment – Compliance markets (e.g. NSW Biodiversity Offsets Scheme) provide clearer demand signals, while voluntary markets carry more variability.

• Co-benefits and reputation – High-quality investments can deliver ecological, social, and reputational dividends beyond financial return.

Investing in biodiversity is no longer limited to philanthropy or symbolic ESG. The pathways are here: credits, land, projects, and funds. Each offers a different mix of liquidity, risk, and impact.

For investors, the decision is not whether biodiversity will become investible - it already is. The decision is how to participate, and at what stage. Early movers not only capture opportunity, but help shape the rules of an emerging asset class.