Finance Solutions for Nature 2025

2.3 Natural asset companies (NACs) NACs are a new asset class that integrates the total economic value of nature. Overview58,59 NACs are a new class of public or private companies that convert the value of natural assets into financial capital. They aim to generate finance, create jobs, offer price signals for externalities and serve as portfolio tools for nature. Structured as operating companies issuing equity, NACs can be established by governments, landowners, corporations or communities. They may attract institutional investors, asset managers, corporates, MDBs and family offices seeking returns, thematic alignment, diversification and long-term resilience. Revenue streams include carbon and biodiversity credits, water services, ecotourism, sustainable harvesting and PES. Potential to mobilize capital for nature Structuring NACs requires close engagement with primary investors. Only one live transaction exists to date, with several in development. They hold strong capital potential, leveraging familiarity with equity markets. By assigning financial value to intrinsic, productive and option-based aspects of nature, NACs enable assets to be traded and appreciate over time. They offer diversified revenue streams through a single entity – appealing to institutional investors, many of whom were engaged during NACs’ conceptual development. NACs are widely applicable to agriculture, forestry and infrastructure sectors, enabling ecosystem services – such as wetlands, standing forests and pollinators – to be turned into reportable, investable assets. Ability to price nature into markets NACs incorporate the full economic value of ecosystem services into financial valuation by combining financial statements and ecological performance reports (EPRs). EPRs, based on UN-SEEA (system of economic-environmental accounting) standards, assign monetary value to ecosystem benefits, including commercial output, services, non-use and option value, store of value and risk mitigation. However, greater transaction volume is needed for price discovery. While markets exist for provisioned goods (e.g. food, fibre), pricing remains underdeveloped for regulating (e.g. water filtration) and cultural (e.g. recreation) services – areas that NACs aim to value. Pathways to mainstream The structure and valuation of NACs needs standardizing. The limited methods and precedents for translating ecosystem value to equity hamper investor confidence. Progress depends on three factors: sustained engagement with landowners, investors and underwriters; convergence around common standards by securities bodies; and replicable models from leading NACs. Piloting, proof-of-concept transactions and benchmarks all need to be ramped up. A first generation of similarly structured NACs deployed across ecosystems could build price references and support convergence. Compatibility with instruments such as conservation easements, corporate debt or parametric insurance to protect against ecosystem collapse could also improve uptake. Clarity on land, property and ecosystem ownership may further improve transaction structuring. By assigning financial value to intrinsic, productive and option-based aspects of nature, NACs enable assets to be traded and appreciate over time. 20 Finance Solutions for Nature: Pathways to Returns and Outcomes