The Best Investment Opportunity Ever: Investing in Nature 101
Nine years ago, I said goodbye to Wall Street and became an investment banker for nature. After a 24-year career at Goldman Sachs where I was a partner and led a number of key business units, I left the firm to become president and CEO of The Nature Conservancy (TNC), the world’s largest environmental organization.
When I arrived, TNC—along with organizations like World Wildlife Fund, Environmental Defense Fund, the Union of Concerned Scientists, and many others—was doing great work. Project by project, we were getting great things done for nature. But alas, as good as we were, it wasn’t quite enough. You could say we were winning many battles but losing the war. Environmental harm continued. And looking ahead—especially with rapid population growth and the threat of climate change—our challenges would only grow more intense.
The big question: How do we get more done? And how do we ensure that more financial resources go toward conservation?
My answer: by getting the world to fully appreciate the opportunity to invest in nature.
Unlocking new sources of capital
Most environmental work to date has been funded by philanthropy and government grants. And a lot of great work has been accomplished. But there’s a limit to how much you can do with traditional sources of funding.
As a former investment banker, I couldn’t help myself. I kept thinking about whether there were other sources of capital we could draw on to scale up our work. Capital that wouldn’t run out.
It seemed to me that investing in nature—or “green infrastructure”—might be the key to unlocking a powerful new source of capital for our mission.
Think of nature as infrastructure—“green infrastructure,” in contrast to manmade “gray infrastructure.” Green infrastructure provides valuable services in the form of clean air to breathe, healthy water to drink, fertile soil to grow our food, abundant fish to eat, protection from floods and storms.
Investing in these services can provide very attractive returns for communities, businesses and governments. For example:
· Planting a new forest can be a cost-effective strategy for businesses to comply with air quality requirements.
· Adding rain gardens, porous pavement and artificial wetlands can help cities address stormwater runoff—a leading cause of water pollution—at low cost.
· Restoring a coral reef can help protect people and property from floods and storms, reducing disruption and costs during times of disaster.
· Changing farming and ranching practices in a city’s upstream watershed can improve water quality and reduce treatment costs for beverage companies and utilities.
These natural solutions can be great investments. Often, they work just as well as—or even better than—traditional manmade infrastructure. They often cost less. And they usually deliver important co-benefits for free—things like habitat for plants and animals, green space in underserved neighborhoods and opportunities for recreation and tourism.
That’s what I want to write about in this series.
This series of columns is about the compelling but underappreciated idea that saving nature is the smartest investment we can make. In this series, I’ll explain this idea, describe examples and show you how you can take full advantage of this opportunity. Indeed, I’ll show you how to invest in nature and achieve great returns — all while making the world a better place. It’s hard to be against that, right?
I’ll share some examples of how investing in nature can produce great returns—all while making the world a better place.
You’re likely reading Forbes because you’re looking for smart ways to make investments or grow your business. You’re thinking big about the future of business in a changing world. You’re studying new emerging markets and creative approaches to building resilience and reducing risk. Guess what? Environmental leaders are too. Conservationists and business and finance professionals are natural partners. I look forward to sharing my thoughts on why saving nature is the smartest investment we can make.
*This article originally appeared on October 11, 2017 in Forbes.