WHY NACs

More than half of global GDP is dependent on nature. The clean air, clean water, healthy soil, natural infrastructure, and other vital resources produced by nature are valued at an estimated $125 trillion annually. However, existing approaches to finance regenerative agriculture, conservation, and other critical investments for a nature-positive economy remain insufficient. NACs provide a scalable capital markets solution to closing the “missing trillions” of investment needed.

Stewards of natural capital have had few options to finance and profit from conservation, land restoration, and regenerative practices. NACs provide incentives and financial resources for land stewards and owners seeking to improve the ecological health of their land.

Under-investment in natural infrastructure is increasing risk to supply chains and our wellbeing. Increasingly devastating fires, floods, and droughts are a result of this under-investment. NACs provide a vehicle that can fund management of natural assets in a way that strengthens resilience to flooding, more severe fires, and increase the resiliency of supply chains.

While credit-based instruments, such as carbon and biodiversity credits, have been successful in driving nature-based investments, they face challenges. NACs expand on this groundbreaking work with important additions that overcome design aspects that limit other approaches. NACs build on the net-zero/offset model to include direct investment in nature, climate solutions, and human and social capital. NACs incorporate the full value of nature: intrinsic value, ecosystem service production value, and option value, which reflects the potential for monetization of ecosystem services in the future. The value of a NAC is not solely reliant on credit pricing or policy-driven demand.

The global economy is shifting — growth in many industrial economies is slowing and capital markets are increasingly looking for new investment that can propel future growth. NACs are a scalable, equity-based instrument to power a higher-growth, nature-based, regenerative economy.

Nature, when conserved and well managed, is a perpetual asset: when its systems and cycles are healthy, nature continuously reinvests in itself. NACs, as companies with an equity capital structure, are uniquely positioned to provide an enduring financing solution. Unlike debt or credit instruments, which have a designated duration, NACs can deliver a market rate of return for shareholders as long as the ecological performance of the asset is conserved, restored, or improved.