The crisis facing the world’s biodiversity has become front of mind for policymakers and investors in recent years. Investing in natural capital—the world’s stock of natural resources that combine to yield a flow of benefits—represents an exciting investment innovation that can achieve a range of positive impacts and create opportunities outside of traditional investment silos.
From nature to natural capital
Nature is, quite simply, the natural world around us, including both living “realms” ( biodiversity of ecosystems, species, and genes) as well as non-living ones— land, soil, water, air. Natural capital refers more to the function of nature as a store of wealth (asset) that confers benefits (ecosystem services) and is defined as the world’s stocks of natural assets, which include minerals, soil, air, water, and all living things. It is from this natural capital that humans derive a wide range of services, often called ecosystem services, which make human life possible. From natural capital comes nature-based solutions—solutions that are inspired and supported by nature— that can offer viable and investable ways to mitigate climate change, protect biodiversity, and build resilience into ecosystems and communities. More specifically, they refer to sustainable management and use of natural features and processes to tackle socio-environmental challenges such as global warming and food security.
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