UK asset owners enter second wave of nature-positive investing
UK asset owners are embarking on a new phase of nature-positive investing, as allocations to the asset class, once limited to the largest investors, are now increasingly being adopted by smaller funds, industry experts say
UK institutional investors are becoming more prepared to embrace nature as an asset class, with the concept of nature-positive investing spreading from the largest investors to smaller master trusts and defined contribution (DC) schemes, according to Drew Henley-Lock, a partner at Lane Clark & Peacock, speaking at Net Zero Investor’s Nature Positive Investment Forum.
“We have seen two waves of nature-positive investing. First, we saw organisations with scale, like Nest, coming through and allocating to sustainable forestry. We are now increasingly seeing smaller DC schemes and master trusts allocating to the asset class,” he said.
While larger defined benefit (DB) investors such as USS and the Pension Protection Fund began to embrace the asset class in the early 2020s, nature-positive investment strategies are now increasingly being adopted by smaller funds, he added.
NZI Charities and Endowments Summit | 12/06/2026 | London
Henley-Lock also noted that many of his clients were approaching the topic as an extension of their net zero strategy. More than 90% view climate as a priority, but only one in five currently considers nature a key concern. This is mirrored by figures released by the Pensions and Lifetime Savings Association (PLSA), the UK’s pension industry body, which show that while 65% of UK pension funds have net zero targets in place, only 17% state they are familiar with the TNFD reporting requirements.
Unlike TCFD reporting, which is mandatory for larger UK pension funds, TNFD reporting is not yet compulsory, though there are growing regulatory pressures encouraging investors to monitor nature-related risks.
For larger asset owners managing their assets in-house, scale has historically been a key challenge when adopting nature-positive strategies, said Adam Gillet, senior investment manager, sustainable ownership at UK DB fund Railpen.
“What is critical from an investor perspective is that when you are making an allocation in this asset class, it needs to move the needle. Given our size, it has to have a certain ticket size because every single investment comes with governance costs. Particularly, some of these really research-intensive projects are not worth our time,” argued Gillet, speaking alongside Henley-Lock at the Nature Positive Investment Forum.
The £35bn fund is invested in natural capital such as timberland and sustainable agriculture as part of its real assets portfolio.
Offering a complementary perspective, Josephine Richardson, head of research at the Anthropocene Fixed Income Institute, made the case for a holistic approach to nature investing. She argued that investors should consider nature-related risks across their public markets portfolios, particularly in fixed income investments.
“We want to strengthen the relationship between pricing and sustainability risks. Not only can investors achieve better returns, but the cost of capital can also be a powerful lever for driving change,” she said.
Concluding the discussion, she urged investors to be more ambitious with their “super boring fixed income portfolios”, adding: “It has the potential to have impact and drive change among companies that will be central to the transition.”
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