Commentary
The profit motive can be nature’s friend, not its enemy

A decade ago, when we were launching Nature4Climate, making the case for investment in nature was very much impact first, with returns treated as an afterthought or a hope. You led with the forests and the species and the livelihoods, and you crossed your fingers that the numbers might one day follow.

Let me be clear: the case for nature has never depended on financial returns. Nature matters because people, climate and biodiversity depend on it. The question was never whether nature is valuable. It is whether our financial systems can finally recognise and invest in that value.

The data now suggests they are beginning to. When Forest Trends and The Nature Conservancy first surveyed this field in 2016, for-profit investors in nature weighted conservation impact and financial return more or less evenly. Today, returns lead. 

To some in the conservation community, that will sound like a defeat, but I think it is the opposite. It is a signal that nature’s cause may finally be fundable at even larger scales. Those who are able to weigh these two considerations more or less equally occupy an important but ceiling-bound place in the investor spectrum: what is often referred to as impact and catalytic capital. Financial return is what opens the door to a wider group of investors. 

Why “returns-first” is a feature, not a failure

I understand the discomfort. “Returns-first” can sound like greenwashing and the goal is not to suggest that we should replace nature’s intrinsic value with a financial one. 

But consider where the most durable stream of large-scale capital actually comes from. Institutional investors like pension funds cannot be motivated by mission. In the case of the latter, they answer to retirees, not to a cause. If nature can attract that capital, and other institutional investment alongside it, on a sober risk-return basis, then it has expanded beyond impact investment alone. 

And the numbers point somewhere more hopeful still. When asked about the expected relationship between returns and an investment’s ecological outcomes, the majority of nature investors and asset managers reported a strong positive relationship – rather than a trade-off. That relationship between financial performance and impact held across the full spectrum of business models and project stages. In fact, nearly nine in ten active investors now see returns and impact as reinforcing rather than competing. These are fiduciaries, so they cannot chase impact at the expense of return. Yet what the data suggests is that when they face several opportunities with similar return profiles, they are increasingly drawn to the one that offers greater impact. When the returns are there, impact becomes a tiebreaker, and increasingly a preference.

The quiet, unglamorous work here is making nature legible to a fiduciary, not making it feel virtuous. But it is equally worth saying plainly that not all finance is good finance. Conservation has learned hard lessons about integrity, governance and community benefit. Let’s remember that the real test of any solution is not just hectares restored or capital mobilised, but whether the communities doing the work share in the value it creates. The goal is not more capital at any cost. It is more return-seeking capital aligned with long-term environmental and social outcomes.

What this looks like in practice

Two recent initiatives show the shift, in different ways.

BTG Pactual Timberland Investment Group’s Latin American Reforestation Strategy raised $1.24 billion and closed above target earlier this year, making it the largest reforestation and restoration fund to date. The fund’s sustainably-managed tree farms pair with carbon revenue to provide economic returns, and that sustained economic activity is precisely what funds the impact: nearly 29 million trees planted across more than 64,000 acres, roughly 50,000 acres already under restoration with much more on the way, riparian buffers widened to nearly seven times what the law requires, and close to 1,000 species recorded. The appetite for returns did not dilute the impact; it financed it. Early catalytic support helped de-risk the start.

The World Bank’s new Spekboom Restoration Outcome Bond highlights another key observation: how you turn a restoration outcome into something an investor can simply buy. The bond raised $120 million, the Bank’s longest-dated outcome bond yet, to scale a 50,000-hectare restoration project in South Africa’s Eastern Cape run by Imperative, which is expected to create around 11,000 local jobs while rebuilding carbon, soil, water and biodiversity. The Bank’s AAA rating protects investor principal, and the coupon investors forgo is redirected, through a BNP Paribas hedge, to fund the restoration’s upfront costs. Investors are then made whole by the revenue from Amazon’s decade-long carbon-removal offtake. The return does not come despite the impact; it comes from it. 

These are not necessarily universal solutions, and I am not endorsing any single approach as one size fits all. But these examples help illustrate a broader shift: the emergence of financial structures that reward investors for environmental restoration. 

What still holds nature back

Notable constraints remain. Capital still flows to the categories that are easier to finance – like forestry and agriculture – while the business case in areas like biodiversity and water is still being built. And minimum cheque sizes push the market toward large, aggregated deals, risking a missing middle where smaller and community-led projects are simply too small to finance.

But I think the signals, overall, point in a positive direction. A decade ago I sometimes felt I had to apologise for any returns at all. Now the returns are the reason we are attracting more capital to the table. The task ahead is not to treat profit and protection as opposing forces. It is to build the policies, procurement commitments, standards and partnerships that let every kind of capital, public, private and philanthropic, flow to the places where nature can deliver the greatest value.