The focus areas of the conference were natural capital, agriculture, supply chains, and regulation and reporting; and highlighting new technologies being used to collect nature-related data such as Earth observation and satellite reporting.

Peers pointed to the Hackathon, which commenced on 27 September and will continue until 10 October, as a part of the event that demonstrates the ’Learn by Doing’ aspect of the event. He also touched on background of nature in financial services in the EU, pointing to the EU Nature restoration law adopted this year which requires 30% of natural habitats to be restored by 2030, and 90% by 2050.

“What we wanted to do, is to put on an event that is our attempt at explaining the landscape of what a natural transaction might be with data providers along the way, and end it up in an asset management trading platform with all the concerns and traditionality that that regulated entity has to prove to the financial industry that this can be an asset class that is as tradable as any other, but with all the due diligence and concern that all of us would expect along the way.”

Peers ended the introduction with a simple Slido question: ‘Is it clear to you how natural capital could be priced and traded?’ The majority responded ‘no’, and we will see if this response changes over the course of the event.

Robert Gardner, founder of ReBalance Earth opened the first session of the morning with a keynote address on ‘A day in the life of a transaction’, which outlined the problem statement of the conference this year: what is the role of natural value in the supply chain, and how can financial institutions assess natural capital?

Gardner emphasised how companies often do not acknowledge the impact that climate change and nature loss has on their business and assets: “Every 1 ̊C increases in temperature is a 7% increase in moisture in the air, and what happens? We’re getting more rainfall, but if we get more intense rainfall, we also get periods of lower rainfall. For the last two weeks, we’ve all been experiencing that damage. That’s the climate physical risk.”

Providing examples of severe damage to factories owned by Shell and McVities due to natural disasters, he demonstrated how climate change causes loss of revenue and assets: “Of all of the nature risks, water is the number one risk. It impacts 7-9% of GDP. Yet, only two-thirds of financial institutions, banks, asset managers, and insurers, really understand or have assessed their water risks. Only 1% of financial institutions have even set targets about water security. The issue is that no one can even see this risk.”

Gardner highlighted that nature is the solution. Moving to the actions taken by ReBalance Earth, he stated that the company starts with high value catchments to assess what is the best nature restoration that they can do: “Our starting point is not to start with nature, counterintuitively, but to start with high-value catchments, and then to work backwards and say, what are the nature catchment restoration opportunities that we can do. It might be peatland, it might be river restoration, it might be paying farmers to farm differently and improve their soil quality.”

Pointing to nature-related solutions being enacted through ReBalance Earth initiatives in Plymouth, he showed that water can be stored in nature, by flowing capital back into restoration habitats and biodiversity instead of building more concrete monoliths, environments can be protected and businesses can make profit.

He stated that the return is avoiding the loss of assets due to natural disasters, insurance costs that do not cover business interruption, and slowing down flood risk. Gardner emphasised that the main challenge is the free-rider problem, because big businesses need to put in the capital to protect the environment that will protect investments and attract more business. If more businesses are not willing to make those changes in their infrastructure to assess nature-related risk, then the ability to make a difference will become more difficult.

However, £100 billion over the next decade is needed for nature restoration. Yet, there is £5 trillion in UK pension and wealth assets, which will double to £10 trillion by 2025, that can be redirected into nature.

“My point to a pension fund is for every pound that you have, if you just took 2p and made a 2% allocation to nature, as an asset class in the same way that you invest in real estate or infrastructure. If I can reframe nature as business-critical infrastructure, and I can show you that you can get a rate of return, because those companies in Plymouth are going to pay to reduce the risk of not being able to operate like Shell and McVitie’s.”

Gardner concluded that by redirecting the flow of capital, we can achieve their goals of “financial return and a world worth living in.”