NATURAL CAPITAL – NATURE TECH IS THE EMERGENT GLOBAL ASSET CLASS

From a conventional agricultural perspective, natural capital is one of the most vital and mismanaged resources. It requires patience, careful nurturing, and a mindset that combines both ecological restoration and profitable production outcomes.

Natural capital is about the world’s stock of natural assets; this includes soil, air, minerals, rivers, oceans, wild landscapes and plants, animals, fungi and microbial biodiversity. Viewed from a human perspective, they can be understood in functional biomechanical terms as the moving parts of nature that collectively work together to provide a range of ecosystems services on which we depend for our existence.

Ecosystem services include food and fresh water, carbon sequestration, natural flood defence, water filtration, clean air, atmosphere and biodiversity habitats. The way they combine is a critical element in determining the ‘earth system’ of weather patterns – the climate. Up until now, from an economic perspective, these ecosystem services have been mainly considered as free-to-use external benefits. Hence, they have been extracted and depleted to the point of crisis.

The response of progressive leaders in the financial sector has been to recognise that natural capital can, and should, be seen as both an intrinsic and precious ‘asset class’ and therefore be part of any economic decision-making process.

Building, restoring and preserving natural capital through regenerative practices can rebuild the ability of the natural world to provide local, regional and bioregional ecosystem services. This potential is at the core of New Foundation Farms’ ethos of being a Regenerative Enterprise. At the global level, this is part of the solution to address climate change. It is, for example, about removing carbon from the atmosphere into the soils, forests and peatlands and increasing the resilience of landscapes to flood, drought, fire and other risks. Doing this is often described as nature-based solutions to tackling climate change. We, at New Foundation Farms like to think of this as ‘nature tech’. In other words, combining the cutting edge of modern scientific knowledge about nature with entrepreneurial innovation to build a restorative and regenerative economic system.

In this sense, nature tech is, from an investment perspective, the emergent UK and global asset class. As such we believe that if developed to its full potential, it will be central to addressing the needs of patient capital to secure long-term returns for many generations to come.