For investors seeking to deploy capital to strategies that may benefit nature while generating positive financial returns, there are a multitude of opportunities to access well-developed existing and emerging environmental markets.
Unprecedented global action to address the decline in nature and its causes is underway, and investments in biodiversity will be a critical part of these efforts. The global rate of species extinction is unlike anything the world has seen since the time of the dinosaurs – today, one million plant and animal species are threatened with extinction, many within decades. Because over half of the world’s economy is dependent on nature, these losses threaten the wellbeing and livelihoods of people all over the world.
Human activity is the primary cause of biodiversity loss – land use change is the biggest driver, but other factors such as climate change, pollution and invasive species contribute to biodiversity’s dangerous decline. Addressing this global challenge will require changes in the way we value biodiversity and manage land and will require new private investment along with supporting policies that encourage private landowners and land managers to take action.
Market-based approaches designed to incentivize the protection, improved management and restoration of nature can both expand the reach of policy to private landowners and encourage investment that helps achieve biodiversity conservation targets. Environmental markets put a price on protecting and restoring nature, creating incentives to facilitate private capital into investments that improve, not diminish, biodiversity. And with the right incentives in place, protecting, improving and restoring ecosystems for biodiversity can become a source of return for landowners and not another cost of doing business.
Do you want to find out existing and developing market-based pathways for land-based investments to positively impact biodiversity? Read the full article here and subscribe to receive the latest insights.
Important information on risk
Investors should be aware that alternative investments including private equity and private debt are speculative, subject to substantial risks including the risks associated with limited liquidity, the potential use of leverage, potential short sales and concentrated investments and may involve complex tax structures and investment strategies. Alternative investments may be illiquid, there may be no liquid secondary market or ready purchasers for such securities, they may not be required to provide periodic pricing or valuation information to investors, there may be delays in distributing tax information to investors, they are not subject to the same regulatory requirements as other types of pooled investment vehicles, and they may be subject to high fees and expenses, which will reduce profits. Real estate investments are subject to various risks associated with ownership of real estate-related assets, including fluctuations in property values, higher expenses or lower income than expected, potential environmental problems and liability, and risks related to leasing of properties. Responsible investing incorporates Environmental Social Governance (ESG) factors that may affect exposure to issuers, sectors, industries, limiting the type and number of investment opportunities available, which could result in excluding investments that perform well. Investments in middle market loans are subject to certain risks such as: credit, limited liquidity, interest rate, currency, prepayment and extension, inflation, and risk of capital loss. Private equity and private debt investments, like alternative investments are not suitable for all investors given they are speculative, subject to substantial risks including the risks associated with limited liquidity, the potential use of leverage, potential short sales, concentrated investments and may involve complex tax structures and investment strategies. Nuveen, LLC provides investment solutions through its investment specialists. This information does not constitute investment research as defined under MiFID.
