Investing in Natural Assets: Seeking Alpha in a World in Transition

The game of investing has been played by the same players, using the same script, for the last 40 years. But due to changing externalities, including the pandemic, war in Ukraine, and increased climate events, the world’s beta, or risk factors, are increasing and getting more entangled. There is concern that globalization has peaked and Gross Domestic Productivity (GDP) volatility is at its highest since World War II.

As risks to the current system increase, the search for alpha will require new approaches, new thinking, and new players. Driving returns in this environment will be more complex and require systems thinking and partnership across new stakeholder groups, many of whom do not collaborate today. But if done well, investors can drive returns that are more productive and profitable in a way that protects our natural resources.

Our systems are at a point where it is more productive to work with nature than against it. Amid higher risks and a surge of innovation, we take a look at the investment opportunity arising in the Energy, Agriculture, Forestry and Oceans sectors.