The Editor’s Post: Big numbers and new trends – our takeaways from the GIIN Impact Forum in Amsterdam

Laura Joffre 25th October 2024

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Conversations with delegates reveal growing momentum for natural capital – a young field that could become a staple of impact investing, as essential to the world as renewable energy. This week's view from the Pioneers Post newsroom.

This week, I was among 1,600 delegates gathered in Amsterdam for the GIIN Impact Forum – which many see as one of the highlights of the impact conference season. Opening the event, CEO Amit Bouri revealed, to much applause, the GIIN's latest estimate of the size of the global impact investing market, which now stands at more than US$1.5tn – there are some surprises beyond the headline figure, so make sure to read our article to dig into the detail.

As with many of these conferences, much of the action happens outside the auditorium in the lobbies and corridors, where people are building connections, exchanging ideas, and importantly, doing deals. I had chats with some of the attendees – investors, researchers, network builders – to figure out where the focus of the sector currently is.

One thing that came up repeatedly was the momentum behind investing in natural capital. Investing in natural capital means investing in the protection or restoration of natural resources, for example in forestry, farming and biodiversity – an interesting topic to be talking about this week, as the UN biodiversity conference COP16 is under way in Colombia.

The interest in natural capital among investors has emerged fairly recently: an investor told me awareness and understanding of the concept has grown over the past three years – before that, few people in the industry understood what “natural capital” really signified.

Natural capital: an asset class in its own right

But it’s now seen as an asset class in its own right – recent research found that two-thirds of impact investors are “actively considering” natural capital in their portfolios. In particular, impact investors tend to target the “triple impact” of nature restoration, carbon emission reduction and benefit for local communities.

While many impact investors used to focus on carbon reduction and see biodiversity as an aside, most investors now understand the nexus between climate and natural capital, a senior manager in one of the early-adopters of biodiversity investing tells me – recognising that one goes with the other. A small number of investors remain exclusively focused on carbon emissions, but it’s unlikely to last because “it just doesn’t make any sense”, they say.

The money that flows towards preservation of natural capital currently tends to come from two types of investors: those with an existing portfolio in relevant sectors such as forestry or farming, who are realigning their investments towards sustainable practices (having figured out that depleting the resources in which they were invested was probably not a good idea); and impact investment managers targeting the “triple impact” strategy.

The field is still very young: “think renewables, 15 years ago”, an investor tells me. How investments in natural capital will scale remains to be seen. There’s more than US$1.5tn of impact investments worldwide; pension funds and insurance companies account for nearly half of it… and they’re becoming interested in natural capital. “They’re getting there,” I’m told. A sign that it matters for the sector was probably that one of the investors I was talking to was about to fly to Colombia to attend COP16.

Catch up on our latest webinar online

Did you miss our latest SE100 webinar on how to be brilliant at getting investment for your social enterprise? The full recording is now available to watch on YouTube, and we’re preparing a summary of the highlights if you don’t have time to watch the full video – keep an eye on pioneerspost.com to make sure you don’t miss out. Stay tuned as our next webinar is coming soon, this time on how to be brilliant at reducing your carbon footprint – the date is to be announced in the next few days.