From risk to resilience: financing nature at scale

by Green Finance Institute | September 17, 2025

From awareness to investment​

As the climate crisis intensifies and ecosystems edge toward tipping points, the private sector is beginning to reckon with a fundamental truth: environmental risk is business risk. This reality is underscored by recent surges in food prices – rice, potatoes, cocoa, onions – driven by warmer weather and droughts in key producing regions, which highlight how environmental disruption is directly reshaping global markets and supply chains (1). ​

It is not only in agriculture where these risks are being felt: water scarcity is threatening data centre operations; flood risk, due to loss of topsoil or vegetation, is impacting large infrastructure projects. ​

This nature-related risk is being reflected in the cost of capital for businesses. Businesses that the GFI works with, notably some infrastructure firms, share that their insurance premiums are increasing due to increased risks of flooding or water shortages, while agrifood businesses share that they are concerned their lending terms will be changed if supply chains are not made more resilient to nature degradation and climate change. ​

There is also evidence of a correlation between share price performance and exposure to biodiversity risk. A working paper published by the National Bureau of Economic Research analysed financial statements and corporate annual reports from 2010 to 2020 and found that companies which were more exposed to biodiversity risk saw their stock prices underperform compared with others less exposed (2). ​

Institutional investors are taking notice. Norway’s Sovereign Wealth Fund (GPFG), the world’s largest, has assessed 96% of its USD$1.6 trillion portfolio for nature risk – mapping company dependencies on biodiversity and natural capital (3). In particular, the assessment highlighted the considerable asset exposure of the technology sector, which makes up the largest share of the fund’s portfolio by net asset value, to both very high-water demand and very high-water stress.​

What is needed from the business sector to reduce these risks and ensure business continuity is action – coordinated, collective, and capital-backed – on the ground, at scale.​

Real-world models that are working​

Today, corporate responses to nature risk remain fragmented, with business action isolated to a handful of commodities, or to one landscape. Businesses have also tended to act alone – individually paying farmers for nature-positive actions, or emissions reductions, for example. ​

Co-ordinated action through co-investment vehicles or partnerships, where companies across sectors, supply chains or regions collectively invest in nature-positive actions, are starting to gain traction among large, and often multi-national businesses.​

These partnerships can lower transaction costs for businesses, reduce ‘free rider’ concerns, and have larger, landscape-scale impact, thereby bolstering the internal business case, and increasing business resilience. ​

​Through our partnership with UNEP FI and UNDP BIOFIN we have identified co-investment vehicles that are already enabling businesses to come together to invest in improving the resilience of their collective operations or supply chains. These models have innovative structures that support payments to farmers, communities, non-governmental organisations (NGOs) or fishers to take actions to improve the environment. ​

For example, Agribusiness Receivables Certificates (CRAs) – fixed-income securities backed by receivables from agribusiness operations – are being deployed by initiatives like the Responsible Commodities Facility (RCF) with leading retailers such as Tesco to direct private capital toward sustainable production by lowering credit risk and rewarding farmers and producers for environmental and social performance.​

The Rimba Collective in Southeast Asia from Lestari Capital is a collaborative, long-term finance mechanism designed to link sustainable commodity procurement with large-scale landscape conservation and restoration efforts. Companies like Procter & Gamble and Unilever commit to multi-year financing for conservation in proportion to their palm oil procurement. The model reduces transaction costs and unlocks greater scale and durability of impact (4).

Across the UK and Europe, the Landscape Enterprise Networks (LENs) model from 3Keel shows how aligning around shared landscape dependencies—such as water security, flood mitigation, and soil health—can catalyse co-investment from agrifood businesses and utilities (5).​

Crucially, these models generate multiple benefits, which should enhance the case for investment.

Barriers to replication​

Scaling and replicating these promising models across sectors and geographies, however, remains challenging.​

Development costs present a hurdle. Building collaborative investment vehicles, structuring long-term contracts and engaging stakeholders across a landscape all require time, technical support, and early-stage capital – often between $50,000 and $75,000 for a scoping phase, and up to $500,000 for a model to be able to start contracting and stand on its own. ​

While philanthropic organisations have been open to providing costs for initial model development, they have been reticent to follow on and fund replication. Yet, without this funding, we risk having excellent one-off models having an impact in one region or one commodity, while missing the opportunity for broader systemic change. ​

As these models scale, they may also require upfront capital to pay for on the ground activity – with repayments made by businesses as outcomes are delivered. This is where concessional finance, be that public or philanthropic funding, can play a catalytic role: de-risking these investments, absorbing first-loss capital, and enabling projects to move from blueprint to bankability.

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One example is the Fisheries Improvement Fund (FIF), developed by Finance Earth to channel investment into Fishery Improvement Projects (FIPs) – collaborative initiatives to make fisheries more sustainable. In Chile, the Walton Family Foundation provided a concessional loan to the FIF with an expected 5% return (6). In this first pilot, the WFF has allowed for the return to be reinvested in subsequent projects. Repayment is structured around quarterly payments from supply chain companies through contracted agreements with the FIF. The terms of the loan with Walton only require the FIF to repay if supply chain companies continue to pay. As Elizabeth Beall, Managing Director at Finance Earth, explains: “Philanthropic capital, like the Walton Family’s concessional loan, plays a catalytic role – de-risking the model and attracting more investment into fisheries improvement.” ​

If early-stage funding is made available to these collective action models alone (FIF, Rimba, LENs, RCF) to be systematically replicated, we calculate that at least $1 billion in further investment by companies could be unlocked before the end of this decade.

Systemic Change​

Beyond the funding and finance barriers mentioned above, the scale and pace at which these models can be deployed are also heavily influenced by broader market conditions. ​

Chiefly, how do we prove to businesses that there is a clear case for investment? At present, it is still challenging to exactly quantify the value of avoided losses – losses due to future flood risk, reduced water quality or quantity, or soil heath decline. This quantification is critical in building the investment case for CFOs. As Tom Curtis, co-founder of LENs, shares: “The more we quantify the financial risks of inaction, the better businesses can understand their exposure and collaborate on building resilience.” This includes not just the cost of operational or supply chain disruptions to businesses, but also the future costs of capital as resilience decreases – or, with paid interventions – increases.

Secondly, how can we ensure that paid-for actions on the ground are delivering the impact needed to reduce risks and future costs? At present, impact measurements are not standardised. In the UK, for example, no standard exists for natural flood management projects with regards to impact measurement. This means that businesses have to grapple with different metrics each time they want to invest in a flood reduction project. ​

Even across the models listed above through the Revenues for Nature programme, different impact measurements are used. If we want to replicate and scale these co-investment models, we will need to create more standardized methodologies for measuring impacts across regions. ​

The above challenges are not insurmountable but must be addressed if we want to move from assessment and disclosure of nature-related risk towards investment into more resilient businesses, landscapes and economies. ​

This article was originally published in the September edition of Green Finance Quarterly. Read the full publication here. 

1. Financial Times – Extreme weather drives food price surges across the globe (2025)​
2. Pictet Asset Management – Biodiversity loss is becoming a material financial risk (2023)​
3. Norges Bank Invesment Management – Climate and nature disclosures (2024)
4. Green Finance Institute – Rimba Collective (2025) ​
5. Green Finance Institute – Landscape Enterprise Networks (2024)
6. Green Finance Institute – The Fisheries Improvement Fund (2025)