Nature is solidifying its place in global investment portfolios, with institutional investors citing that they intend to increase their exposure, despite an increasingly volatile political landscape, according to a new report from Pollination, the global climate and nature advisory and investment firm.
The second edition of Pollination’s Nature Finance Focus surveyed 500 institutional investors across the UK, USA, Australia, Singapore and Japan, that currently consider nature in their investment portfolio, either as a risk or investment opportunity.
Despite 96% acknowledging that the politicisation of ESG is influencing their strategies, momentum for nature-related investment has not slowed. Nearly all (99%) investors surveyed said they plan to increase their nature-related investments – a substantially larger number than the 2023 survey, showing growing interest in capital deployment.
Nature becomes a strategic priority
The study found that nature is shifting from a niche interest to a significant area of engagement and deployment for major investors. 43% of investors cited financial return as their primary motivation for investing in nature, a shift from risk mitigation and implicit inclusion in 2023.
However, regional differences persist: Singaporean investors remained most focused on delivering environmental impact (44%), while UK investors said they are responding primarily to client demands (37%).
Zoe Whitton, lead author of the report and Managing Director, Head of Strategy and Impact at Pollination, said: “The findings tell a clear story: nature is increasingly recognised for its central role in both risk and return. Despite the volatile political landscape, momentum continues to build. But to unlock the next wave of investment, we need to move from conviction to capability, where we align financial models, policy incentives and product pipelines to drive this new asset class to maturation.”
Martijn Wilder, co-founder and CEO at Pollination, added: “Nature is no longer just a risk management exercise, it’s becoming a strategic growth opportunity. Investors are recognising that nature underpins supply chains, production systems and long-term value creation. Building resilience into our economic foundations, starting with nature, is critical.”
Sectoral and asset class risks shift
The survey data suggests that investor understanding of nature-related risks has matured significantly since 2023. Investors pointed to a substantial increase in observed risks across sectors, suggesting that the financial materiality of nature-related risks is becoming more evident for capital markets.
Additionally, there is almost a ten-percentage point jump in the number of investors highlighting risk across sectors, signalling a higher observation of risk than in 2023. Chemicals, materials, and manufacturing have overtaken agriculture and property as the top sectors perceived to carry the highest amount of nature-related financial risks, cited by 42% of respondents globally. The trend is particularly strong in Singapore (53%) and Australia (47%).
Hiring to hold firm and more M&A on the horizon
Investor strategies are evolving, with growing use of specialist expertise, acquisitions and partnerships. For example, in the UK, 42% of respondents say they plan to acquire specialist investment firms to deepen nature exposure, a shift from internal capacity-building and product development two years ago. Meanwhile, Singapore continues to prioritise expert hiring (52%), while Australian investors are now focusing on forming partnerships (44%).
Structural barriers to overcome
While commitment to nature remains high, challenges remain. Globally, 40% of respondents say investor appetite is a barrier, and this reflects differing pain points across key regions. For instance, likely due to recent political headwinds, boards are deprioritising nature in the US (45%), while a shortage of nature-related investment opportunities in Singapore (46%) and skills gaps in Japan (50%) are holding back progress.
This year’s Nature Finance Focus report explores the evolving landscape of nature finance. It examines emerging financing models and market mechanisms, across debt, equity, and blended instruments, that support conservation, restoration, and nature-positive transitions across sectors. It also showcases practical case studies and identifies pathways for scaling institutional investment into natural capital.