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Investing in biodiversity: from nature‑related risk to long‑term value

Tackling biodiversity loss: considerations for sustainability-focused investors

Active Equity 4 min read
How institutional investors can mitigate nature-related risks and capitalise on the growth of biodiversity capital.

  • USD 7.2 trillion

    enterprise value exposed to unmanaged biodiversity risk

  • USD 1.4 trillion

    projected size of nature-related investments by 2030

  • +10%

    commercial rental premium for green buildings with nature-based solutions in London & Asia

Sources: Carvalho, Cojoianu & Ascui (2023), UNEP FI (2024), JLL (2024)

Key takeaways and investment implications

  • Biodiversity is a core investment risk, and opportunity

    Nature loss is already affecting cash flows, asset values and the cost of capital across sectors, from food and materials to infrastructure and real estate. At the same time, investing in nature is among the most cost-effective ways to reduce pollution and carbon emissions, restore biodiversity and deliver wider social benefits.

    Implication: biodiversity and nature-related risks and opportunities are financially material and should be integrated into portfolio analysis. and construction.

  • Data, science and regulation have reached a tipping point

    Advances in monitoring, impact modelling and reporting, and disclosure frameworks are turning biodiversity from a seemingly insurmountable problem to an investible one.

    Implication: scientific advances and maturing regulatory frameworks allow investors to integrate biodiversity considerations into portfolio analysis more systematically and objectively.

  • Capital markets are catching up fast

    Nature-related investible assets are expected to exceed USD 1.4 trillion by 2030. Biodiversity has overtaken climate as the primary category of green and sustainability bonds, while equities and private markets are seeing a rapid expansion in nature-linked strategies. 

    Implication: the natural capital investible universe is expanding across equities, fixed income and private markets, creating new sources of long‑term returns.

  • Returns and protection are no longer a trade-off

    Investing in biodiversity is no longer a binary choice between protecting the environment and achieving capital gains. Companies that reduce ecological damage and improve resource efficiency are often better positioned for long-term growth.

    Implication: integrating biodiversity considerations can help investors identify companies with more sustainable business models and better risk-adjusted return potential over the long term.

  • The power of active ownership and engagement

    Operating with long time horizons, sustainability-focused institutional investors can have an outsized influence on the companies they invest in. Sustained, focused engagement can improve both sustainability outcomes and financial performance.

    Implication: active engagement offers a practical alternative to divestment for managing biodiversity risk and safeguarding value.

  • Photograph taken at the Botanical Garden of Geneva. Established in 1817, the garden was founded by Augustin-Pyramus de Candolle, a renowned botanist and a relative of the Pictet family, co-founders of the Swiss banking institution.

  • Photograph taken at the Botanical Garden of Geneva. Established in 1817, the garden was founded by Augustin-Pyramus de Candolle, a renowned botanist and a relative of the Pictet family, co-founders of the Swiss banking institution.

© Geneva botanical garden photography series

Cover photo: a Doryanthes palmeri, also known as a giant spear lily, blooms at the Geneva Botanic Garden in early April 2026, more than 40 years after the seed was sown. The Australian native plant flowers only once in its lifetime.

From insights to implementation

FinBio's Investor Framework for Biodiversity Risk Mitigation (INFORM) is a practical, science-based set of biodiversity engagement guidelines for both investors and companies. Each level comes with a set of questions. 

Why it works:

  • Effective for those with no prior knowledge of biodiversity issues, and for experts
  • Applicable for companies regardless of their size or industry
  • Every question comes with specific scientific guidance on why the issue matters, what form a satisfactory response take and how investors can use the disclosed information
The INFORM engagement framework: three levels of questions

  • 1. Assess biodiversity impacts and risks

  • 2. Mitigate negative environmental impacts

  • 3. ‎ ‎ ‎ ‎ ‎ ‎ ‎ Set targets

Source: Wassénius, E., Funke, H., Crona, B., Meacham, M. 2025. INFORM: Investor Framework for Biodiversity Risk Mitigation. Mistra FinBio & Stockholm Resilience Centre

Research team

  • Stephen Freedman

    Head of research and sustainability, Thematic Equities

  • Philipp Buff

    Senior Investment Manager

  • Gabriel Micheli

    Senior Investment Manager

  • Yi Shi

    Client Porfolio Manager and Impact Specialist

  • Juan Salazar

    Senior Engagement Specialist

  • Bahar Sezer-Longworth

    Senior Stewardship Specialist & Client Portfolio Manager

Read our previous biodiversity reports

  • Biodiversity: why investors should care

    For too long, businesses and investors have ignored the threat biodiversity loss presents to human prosperity and growth.

    Find out more

  • Costing the Earth: measuring corporations' impact on biodiversity loss

    Investors can no longer afford to ignore the devastating economic effects of biodiversity loss, but they need better tools to contain the risks.

    Find out more
Footnote

Important information

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The information and data presented in this document are not to be considered as an offer or solicitation to buy, sell or subscribe to any securities or financial instruments or services. The information used in the preparation of this document is based upon sources believed to be reliable, but no representation or warranty is given as to the accuracy or completeness of those sources. Information, opinions and estimates contained in this document reflect a judgment at the original date of publication and are subject to change without notice. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any products or services offered or distributed by Pictet Asset Management. Pictet Asset Management has not ensured the suitability of the securities mentioned in this document for any specific investor, and it should not be relied upon as a substitute for independent judgment; investors are advised to determine the suitability of the investment based on their financial knowledge, experience, goals and situation, or to seek specific advice from an industry professional before making any investment decisions. Investors should read the prospectus or offering memorandum before investing in any Pictet managed funds. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future. Past performance is not a guide to future performance. The value of investments and the income from them can fall as well as rise and is not guaranteed. Investors may not get back the amount originally invested.