Can private wealth close the biodiversity funding gap?
Wealth managers are keen to engage with clients on biodiversity, but concerns over liquidity and access pose challenges to retail and private clients.
Oliver Withers, biodiversity lead within the global sustainability team at Credit Suisse, says that the case for nature and biodiversity-based investment is pretty straightforward.
“We talk a lot about the need to invest in carbon-capture technology, but that technology already exists, it’s called trees and mangroves,” he points out.
Nature and biodiversity-focused funds lag behind their climate peers in attracting capital flows. Yet they represent a big opportunity to accelerate global decarbonization.
The Paulson Institute’s Financing Nature report highlights an $800 billion funding gap in nature-based solutions (NBS), which constitute a core element of global decarbonization tools.
NBS investments are overwhelmingly driven by public funds, with only 14% of total flows coming from private finance, according to the UNEP. Meanwhile, the latest Capgemini World Wealth Report highlights an annual growth in the high net-worth population of 7.8% in 2021 as global wealth increased by 8%.
Could that private wealth be the key to closing the biodiversity funding gap?
It seems that the wealthy and ultra-wealthy are engaging with sustainable investment trends, while nature-based solutions resonate well with younger private banking customers.