Investing in nature, our most precious asset - an interview with Marc Palahì, our Chief Nature Officer

Article published in Le Temps, 4 September 2023

In recent years, organisations have increasingly tried to understand the dependence of our economy on nature. PwC reported this year that more than half (55%) of the world’s gross domestic product (GDP) – the equivalent of an estimated USD $58 trillion – is moderately or highly dependent on nature, rising from USD $44 trillion in 2020. The report highlighted that nature’s decline poses significant risks to the global economy and society-at-large if organisations do not reform their practices now.

Rethinking our economy

The ECB’s recent research estimated that approximately 72% of companies in the euro area are highly dependent on nature, while almost 75% of bank loans to companies in the euro area are granted to those with a high dependency on ecosystem services provided by nature.

The above analysis highlights just how much our economy relies on nature. However, as more than just an economic good, its true value is often underestimated. Can you imagine a world without nature? It is impossible; nature is the reason we exist. It is undoubtedly our most important capital and the basis for human life. However, our economy has grown at its expense, and our sophisticated financial system has not historically invested in our most valuable asset.

It is time to rethink our economy. The climate and biodiversity crisis, as well as growing socio-economic inequalities, are different consequences of the same fundamental problem: our economic system. It is time for a new paradigm that positions nature at the heart of our economy and makes the environmental transition possible. To protect nature, and by extension our home, it must be understood and valued, but also made investable.

Connecting nature with finance

A key step companies can take in accelerating this transition is to hire a Chief Nature Officer, serving to connect nature with finance. Banks and investment managers hold enormous power when it comes to valorising the circular bioeconomy, and therefore have an important role to play in protecting it. They can effect change on a grand scale through the channelling of capital, but it is important to fully understand how to do so effectively.

This is where a dedicated role, grounded in science and research, is crucial. Over the past few years, we have seen an exponential rise in the hiring of Chief Sustainability Officers (CSO), a position responsible for a company’s overall environmental strategy. According to PwC research, the number of CSOs tripled in 2021, a positive sign that the role is increasingly valued and supported at the highest level of organisations.

The future of the Chief Nature Officer

We hope that Chief Nature Officers will follow a similar trajectory. They must work closely with the CEO’s senior leadership team, CSOs and investment professionals, building strategies with nature at their heart, which are implemented throughout the business. They must make the case for nature as our most precious asset, providing an understanding of our economic dependence on it, as well as the opportunities that nature-based solutions and the circular bioeconomy offer for the transition to a climate- and nature-positive world. Our research shows that the environmental transition is already well underway; using analysis to identify opportunities for investment holds huge potential to unlock superior returns in the years to come.