Your portfolio has a supplier it's never contracted with, never paid, and never audited. This supplier provides critical inputs to 55% of your holdings. They've been losing money for 50 years. They're now visibly failing.
You have no backup supplier. There isn't one.
This is nature's relationship to every pension fund, endowment, and sovereign wealth fund on the planet. And somehow, it's still not on the investment committee agenda.
you can't diversify away from the foundation
Universal owners—the funds so large they effectively own the economy—have discovered an uncomfortable truth: there's no hedge for systemic collapse.
Climate got there first. Pension funds now treat decarbonization as portfolio protection, not values signaling. They understand that cooking the planet cooks their returns.
Nature is the same math, but harder to see.
Swiss Re ran the numbers: 55% of global GDP depends on functioning ecosystems. Not "benefits from" or "is somewhat connected to." Depends. Meaning: when it breaks, so does the value.
But here's what Swiss Re didn't say loudly enough: you can't sell your ecosystem exposure. It's not a position. It's the ground under all your positions.
what's actually at risk
Let's get specific about what "nature risk" means for a $500B portfolio:
Agriculture & food (typically 8-12% of portfolio) Pollinators service $235-577 billion in crop value annually. Soil degradation already costs $400B/year in lost productivity. Your food holdings are running on depleting capital and calling it yield.
Real estate (typically 15-25% of portfolio) Coastal properties without natural protection. Inland properties without flood absorption. Urban properties without cooling. The physical asset base is increasingly uninsurable, and the underwriters know it before you do.
Insurance (typically 5-10% of portfolio) Your insurance holdings pay claims when nature fails. More fires, more floods, more crop failures, more claims. You're on both sides of this trade and losing on both.
Supply chains (everywhere) Water stress affects 40% of global GDP. Deforestation disrupts precipitation patterns that agriculture depends on. Your manufacturing, retail, and consumer holdings all trace back to natural systems that don't appear on their balance sheets.
Total exposure: roughly half your portfolio.
What's your allocation to address it? For most universal owners: zero.
the ESG distraction
Institutional investors have been talking about nature for a decade. Mostly, they've been doing the wrong thing.
ESG screening removes bad actors from portfolios—but someone else buys them. Net impact on ecosystems: zero.
Sustainability reporting documents decline—but doesn't reverse it. Net impact: negative (you now know exactly how you're losing).
Impact carve-outs allocate 1-2% to feel-good strategies—while 50% of the portfolio remains exposed. Net positioning: incoherent.
TNFD disclosure maps dependencies—then does nothing about them. Net effect: liability.
Here's the uncomfortable question: If you've disclosed your nature risk and allocated nothing to address it, what's your defense when it materializes?
"We knew about it, we documented it, and we chose to do nothing" is not a fiduciary position. It's evidence.
what fiduciary duty actually requires
Fiduciary duty is evolving. Courts and regulators increasingly expect long-term, systemic thinking—not just quarterly returns.
For pension funds with 50-100 year obligations, "long-term" means your beneficiaries will be alive when the Amazon tips, when major fisheries collapse, when aquifer depletion becomes acute.
The question isn't whether to care about nature. It's whether ignoring nature is consistent with your legal obligations.
| Position | Legal defensibility |
|---|---|
| "We didn't know" | Gone (post-TNFD, post-Dasgupta, post-disclosure) |
| "We knew but couldn't act" | Weak (instruments now exist) |
| "We're working on it" | Temporary (regulators want timelines) |
| "We've allocated and are monitoring" | Strong (demonstrates due care) |
The safest position is action. The riskiest position is documented inaction.
the mechanism that didn't exist (until now)
The historical excuse was legitimate: there was no way to invest in "nature" at institutional scale. No standardized instruments. No verification. No liquidity. No exit.
That excuse expired.
Ensurance is infrastructure for natural capital investment:
Certificates — Instruments tied to specific natural assets. Not vague "nature" exposure—specific forests, wetlands, watersheds with defined boundaries, verified ecosystem services, and transparent provenance. See specific ensurance →
Coins — Liquid instruments for general ecosystem support. Tradeable, protocol-wide. Trading activity funds protection across the system. See general ensurance →
Syndicates — Pooled vehicles that aggregate natural assets to institutional scale. One allocation, diversified exposure, structured governance.
ENTRUST — Perpetual protection mechanisms with capital return. You fund protection, earn returns, and exit clean while assets remain permanently secured.
MRV — Continuous measurement, reporting, verification. Not annual audits by conflicted parties—ongoing monitoring with onchain attestation.
The infrastructure exists. The assets exist. The only thing missing is allocation.
the real numbers
What would meaningful allocation look like?
For a $500B pension fund:
| Allocation | $ Amount | What it buys |
|---|---|---|
| 0.1% | $500M | Pilot—learn the asset class, build internal capacity |
| 0.5% | $2.5B | Material—protect key supply chain geographies |
| 1.0% | $5B | Strategic—systemic risk leadership position |
For comparison:
- Average allocation to alternatives: 25%+
- Average allocation to real assets: 10%+
- Average allocation to the thing all other assets depend on: <0.1%
The portfolio math is incoherent. Everyone knows it. Nobody's moving.
why nobody's moving (and why you should)
"It's not my mandate." Protecting portfolio value is your mandate. If half your portfolio depends on nature, nature is your mandate.
"There's no benchmark." First movers create benchmarks. You can be the benchmark or you can track it 10 years late.
"My board won't understand." Your board understands risk. This is a $250B exposure with zero coverage. Frame it correctly.
"The instruments are too new." The instruments are proven. The underlying asset—nature—has been generating value for 4 billion years. What's new is the infrastructure that makes it investable.
"Someone else will fix it." You own the economy. If not you, who?
the window is closing
Conservation-grade natural assets are being converted at 10 million hectares per year. The investable universe is shrinking. Remaining assets are getting more expensive.
Universal owners who move now will:
- Acquire assets at current valuations (still cheap relative to ecosystem service value)
- Shape standards and governance as first movers
- Build institutional capacity before it's urgent
- Actually protect the portfolio value they claim to steward
Universal owners who wait will:
- Pay premium prices for what's left
- Accept standards set by others
- Scramble to build capacity under pressure
- Explain to beneficiaries why they chose documentation over action
the ask
Stop treating nature as an ESG theme. Start treating it as infrastructure.
Stop treating disclosure as action. Start allocating capital.
Stop asking whether you should. Start asking how much and how fast.
The fiduciary question isn't complicated: If you own everything, and everything depends on nature, and you're doing nothing to protect nature—what exactly is your theory of value preservation?