College of Science

The paper, released on October 9, 2024, puts forward 8 actions for what is needed to empower companies to maximize the sustainability impacts of their nature-based investments.

The Microsoft-led policy paper makes a strong case for how companies have an important leadership role to play with investing in nature-based solutions such as carbon dioxide removal, water replenishment, or biodiversity conservation. The specific benefits of these investments hinge on the health of the whole ecosystems which provide these services.

Because it is challenging for companies to consider ecosystem health holistically in investment decisions, Microsoft collaborated with an international team of scientists, including Dr. William Anderegg with the Wilkes Center, to assess the opportunities and challenges of corporate investments in nature. This paper outlines the importance of investing in ecosystem health, shares Microsoft’s experience, and offers insights from science and practice.

The 𝐄𝐢𝐠𝐡𝐭 Lessons for moving forward:

1. Build incentives to invest in ecosystem health. Establish mechanisms that reward companies for investing in nature-based solutions that improve ecosystem health and ensure local community benefits and stewardship.

2. Agree on science-based standards for the impacts of investments on ecosystem health. Civil society and companies need to collaborate with scientists to agree on corporate standards for characterizing how sustainability investments affect ecosystem health.

3. Make science accessible and build capacity to use it. All actors in nature-based markets need to be able to use the best available science to evaluate ecological and social risks, design projects that enhance ecosystem health, and assess it effectively.

4. Accept trade-offs as inevitable and aim to minimize them. While not all sustainability benefits can be maximized at once, strategic planning can reduce negative impacts and optimize positive outcomes.

5. Innovate to de-risk investment. Nature-based investments face risks from the variability of natural systems; better tools are needed to understand, insure, and manage these risks.

6. Expand blended finance. Combining public and private capital can reduce financial risks to private investors and attract more investment into nature-based solutions.

7. Invest beyond capital. While funding is vital, projects and startups also need strategic support, including expertise, long-term demand signals, and market access.

8. Use AI for speed, scale, and reliability. AI can help companies prioritize ecosystem health by enabling cheaper, more effective measurement, trade-off analysis, and risk management.