How Nature-Based Investing Could Be the Ultimate ESG Achievement

The idea of making responsible investments that conform with environmental, social, and governance (ESG) standards is gaining traction in the financial world. The twin goals of ESG investing are to reduce risk while also having a positive impact on the environment. Now, nature-based investments are emerging as a promising option that could achieve these goals.

The argument for investing in nature requires looking beyond just the economic considerations. By investing in natural resources like water, land, forests, and minerals, investors can do their part to protect the environment and help alleviate poverty in less-developed regions. Nature-based investments also hold the potential to generate returns that are both socially and ecologically responsible, making them an attractive option for ESG investors.

It is private markets that offer the most viable route into nature-based investments. This is because private investments can access a much broader set of assets than public investments. In addition, private investments typically have greater flexibility to implement environmental and social policies, allowing investors to make a more direct impact with their investments.

One example of a nature-based investment is timber. Timber has long been recognized as a reliable inflation hedge, given its relative stability compared to other asset classes. As an ESG investment, timber offers the added benefit of fostering biodiversity and helping to sequester carbon dioxide, making it a win-win for investors and the environment.

Ultimately, nature-based investments could be the realization of the twin goals of ESG investing. Not only do these investments reduce risk and have a positive impact on the environment, but they also create the potential for long-term returns. Nature-based investments could be the ultimate way for investors to achieve their financial goals while also doing their part for the planet.