---
title: "why pension funds don't invest in nature"
canonical_url: https://ensurance.app/guide/why-pension-funds-dont-invest-in-nature
markdown_url: https://ensurance.app/guide/why-pension-funds-dont-invest-in-nature.md
subtitle: the deal is too small and the problem is too big
category: nature-finance
---

# why pension funds don't invest in nature

*the deal is too small and the problem is too big*

Pension funds put little capital into the condition of living systems, and the reason is structure, not indifference. In this post, **investing in nature** means putting capital into the condition of living systems themselves (watersheds, soils, forests), not only into the companies and real assets that use them. For a pension fund, that capital meets six walls: ticket size, illiquidity, no benchmark, a revenue model that misses most of the value, weak measurement, and a credit-integrity dispute that reached the carbon market.

Under every holding in a pension fund's book are living systems: the watersheds, soils, forests, pollinators, wetlands and coasts that make the conditions companies earn in. They exist whether or not anyone holds a certificate, and no fund holds them. **Ensurance** is how an owner can fund one of them, at a named place, now. It is not the place, and it does not knock down all six walls.

:::johnson
**the deal is too small and the problem is too big.** — Each nature project is too small for a pension ticket, and the whole of the need is too big for any one fund's sleeve. Both are true at once, and that is the roadblock.

[see the stocks a book stands on →](/natural-capital/stocks?from=guide)
:::

## the money already moves, the other way

UNEP's *State of Finance for Nature 2023*, using 2022 data, counted about US$7 trillion a year flowing into activities that harm nature, against about US$200 billion going to nature-based solutions. For private money alone the split was about US$5 trillion against US$35 billion, roughly 140 to 1.

Target 19 of the Kunming-Montreal Global Biodiversity Framework, agreed in December 2022, calls for at least US$200 billion a year by 2030 from all sources. The biodiversity finance gap most often cited is about US$700 billion a year, from the 2020 *Financing Nature* report by the Paulson Institute, The Nature Conservancy and Cornell. The first is a target, the second an estimate of the gap; neither is a bill anyone has been sent. The US$200 billion in UNEP's flow count is a different measure from the Target 19 goal.

A pension fund reading those numbers sees a problem large enough to touch its whole book. Then it looks for something to buy.

## six walls, at full strength

Each is a sound reason for a trustee to say no. None is a lack of concern.

| the wall | what it looks like from the CIO's desk |
|---|---|
| Ticket size | Many institutions set minimum tickets of US$50–100 million. PwC UK found that more than half of the nature investments it reviewed were under US$10 million. |
| Illiquidity | Restoration and conservation deals can run for decades with no secondary market. A fund that pays pensions every month rations that lock-up. |
| No benchmark | There is no index for nature to be measured against, so a manager cannot show it beat anything and a consultant cannot place it in an allocation. |
| A revenue model | Most of what a living system provides, the water, the pollination, the held soil, is never sold. A deal that pays has to find a product someone buys, and that product is usually a small part of what the place does. |
| Measurement | Condition data is patchy, costly to collect in the field, and reported in units that map to nothing in a fund's own reporting. |
| Integrity | A 2023 study in *Science* by West and colleagues found that about 94% of the credits from 26 REDD+ project sites did not reflect real reductions. Verra disputes the method. Where the baseline is a claim about what would have happened, the buyer carries that risk. |

The fourth wall is easy to miss. Swiss Re Institute estimated in 2020 that 55% of world GDP, about US$41.7 trillion, depends on functioning biodiversity and ecosystem services. That is a measure of dependency, not a price. The economy leans on these systems without paying them, so a deal has to invent a revenue line the system never had.

The sixth wall makes the others worse. Avoided-deforestation credits were meant to be the priced product that pays for standing forest. [A carbon credit is not a forest](/guide/a-carbon-credit-is-not-a-forest?from=guide) explains why that product rests on a counterfactual, a claim about what would have happened without the project. When the counterfactual fails in public, the REDD+ category pays for it, including the communities and developers who did honest work.

## what already works

Some nature deals do get done, and they deserve the credit.

| what works | how it gets over the walls |
|---|---|
| Timberland and farmland | A real asset with a priced product, a long appraisal record and indices that institutions already use. |
| Conservation easements | A recorded legal wrapper that keeps land from development, with a tax treatment funders understand. |
| Water funds | Downstream water users pay for upstream land care because they can see it in their own costs. |
| Debt-for-nature swaps | A sovereign's debt is restructured and part of the saving is committed to conservation. |

Each works where there is a priced product, a legal wrapper, or a payor who can see the benefit in its own accounts. Timberland is held for the timber; the watershed under it comes along. An easement secures the land's use; stewardship funding is usually separate. Water funds come closest to paying for condition, because a named downstream user signs up.

Some pension funds do commit, in sleeves: ABP targets at least €1 billion of biodiversity investment within €30 billion of impact investment by 2030. These are why the field knows what a working deal looks like. The narrow point is that most of the condition of most places still sits outside all of them. [Three nature tickets that are not the place](/guide/three-nature-tickets-that-are-not-the-place?from=guide) looks at what an owner actually holds when it buys the products on offer, and [is nature an asset class yet](/guide/is-nature-an-asset-class-yet?from=guide) asks what would have to be true for the answer to be yes.

## why too small and too big are the same problem

The usual fix for small deals is to pool them into a fund big enough for a pension ticket. That helps with size but puts fees and a manager between the owner and the place, and the pooled vehicle needs one return story, which pushes it back toward whichever part of nature has a price. The usual fix for the big problem is policy, which sets direction and hands no one a thing to fund on Monday.

So a pension fund has two options that both miss. The pooled fund is big enough to buy and too far from the ground to say what changed at any place. The single project is close to the ground and too small to clear the investment committee. [Conservation value is not the ticket size](/guide/conservation-value-is-not-the-ticket-size?from=guide) makes the point that how much a place matters has no relation to how large a check it can absorb. A keystone parcel can matter more to a watershed than much larger land elsewhere and still need a sum no committee will write a memo for.

## what ensurance changes, and what it does not

Start with the limit. **Ensurance does not fix ticket size today.** It is small and early. On 24 October 2026 the protocol showed 2,085 active accounts, 86 with a working onchain wallet, 26 policies and 191 coins, with about US$8 of trading over the prior seven days. No pension fund could put a US$50 million ticket through it. Of the six walls, ensurance bears on two: it changes the unit, which touches the revenue wall, and what is measured, which touches part of the integrity wall. Ticket size, illiquidity and the benchmark stay where they are.

What it changes is the shape of the unit.

| | a nature project | an account addressed to a place |
|---|---|---|
| The unit | A project with a sponsor, a term and an exit | A named place or purpose that stays when any one payor leaves |
| How size is reached | Wait for a project big enough, or pool many into a fund | Many small accounts compose into syndicates and pools, and each keeps its own address |
| What is measured | Usually a counterfactual: what would have happened without the project | Condition now, read each period from what the place is doing |
| Where the money goes | To the project's budget, which often pays stewards directly | To the parcel first, its capital cost while at risk, then its stewardship once secure; the people who keep it are paid out of that work |
| Who can check | The sponsor's reporting, often with a third-party verifier | Anyone can see payments on a public ledger; the condition reading still needs checking on the ground |

The third row avoids one cause of the sixth wall. A reading of present condition does not depend on a claim about what might have been, so it is not exposed to the same baseline inflation. It does not make the reading right. Someone still has to measure the place against a reference condition the ecologists on the ground agree on, and that is the fifth wall, which ensurance does not remove.

The second row is where size might come from in time. A watershed account needs enough to keep its watershed, not a fund-sized ticket. When a need is larger, accounts coordinate up into a syndicate or across to a pool, and each keeps its own address. That is a different route to size than pooling projects into a fund, and it is not proven at institutional scale.

Two more limits. A certificate is not a deed and not a claim on the land; a line has no title, and a policy has a cooperating titleholder. The model is plural, not exclusive: ensurance does not claim to represent any place or be its only funder, and it does not govern the place. The people on the ground do.

One use a fund could consider with its counsel is small: its stewardship team, or a foundation or insurer beside it, names one place many holdings depend on, funds its condition, and reports it beside engagement. Live accounts show the shape: [risk-resilience.ensurance](/risk-resilience.ensurance?from=guide) and [water-abundance.ensurance](/water-abundance.ensurance?from=guide) have wallets deployed. This post is not investment or legal advice; trustees and their counsel decide what fits a fund, including how a certificate would be classed.

Next, what an owner can do this year: [what system-level investing looks like at a named place](/guide/what-system-level-investing-looks-like-at-a-named-place?from=guide). If you steward land that a funder's book depends on, [land stewards](/solutions/land-stewards?from=guide&topic=universal-owners) shows how restoration and stewardship work can be funded through the place itself. If your fund can name the place it stands on, [tell us which](/contact?from=guide&topic=universal-owners).

## frequently asked questions

### why don't pension funds invest in nature?

Because most nature deals do not fit how a pension fund has to buy. Tickets are often under US$10 million against minimums of US$50–100 million, the assets are illiquid, there is no benchmark, most of the value is never sold, measurement is weak, and a public dispute over credit integrity has made committees wary.

### how much money goes to nature compared with activities that harm it?

UNEP's *State of Finance for Nature 2023* estimated about US$7 trillion a year to nature-negative activities against about US$200 billion to nature-based solutions, using 2022 data. For private finance alone the ratio was roughly 140 to 1.

### are there nature investments that pension funds already make?

Yes. Timberland and farmland are long-standing real-asset holdings, and easements, water funds and debt-for-nature swaps work through partners. Each works where there is a priced product, a legal wrapper or a payor who sees the benefit.

### does ensurance solve the ticket-size problem?

No, not today. On 24 October 2026 it had 2,085 active accounts and about US$8 of seven-day trading. What it changes is the unit: an account addressed to a named place, condition read each period, a public ledger, and small accounts that compose into syndicates and pools.

### what is the difference between funding a nature project and funding a place?

A project has a sponsor, a term and an exit, and is usually measured against what would have happened without it. A place stays. Funding it pays for present condition, with proceeds to the parcel first and then to the people who keep it. You can [browse certificates by place](/specific?from=guide) or [explore the catalog](/explore?from=guide).

## sources

[UNEP, *State of Finance for Nature 2023*](https://www.unep.org/resources/state-finance-nature-2023) — About US$7 trillion a year in nature-negative finance against about US$200 billion to nature-based solutions; private flows about US$5 trillion against US$35 billion (2022 data).

[Convention on Biological Diversity, Kunming-Montreal Global Biodiversity Framework, Target 19](https://www.cbd.int/gbf/targets/19) — At least US$200 billion a year by 2030 from all sources (December 2022).

Paulson Institute, The Nature Conservancy and Cornell Atkinson Center for Sustainability, *Financing Nature: Closing the Global Biodiversity Financing Gap*, 2020. — The biodiversity finance gap of about US$700 billion a year.

PwC UK, *Closing the nature investment gap*. — Institutional minimum tickets of US$50–100 million; more than half of nature investments reviewed under US$10 million.

[West, T. A. P. et al. 2023. Action needed to make carbon offsets from forest conservation work for climate change mitigation. *Science* 381.](https://doi.org/10.1126/science.ade3535) — About 94% of credits across 26 REDD+ project sites did not reflect real reductions; Verra disputes the method.

Swiss Re Institute, *Biodiversity and Ecosystem Services Index*, 2020. — 55% of world GDP, about US$41.7 trillion, depends on functioning biodiversity and ecosystem services; a dependency estimate, not a price.

[Ensurance catalog](/explore?from=guide) — Read 24 October 2026: 2,085 active accounts, 86 with a wallet deployed, 26 policies, 191 coins, about US$8 of seven-day volume.

## the series

1. [what is a universal owner](/guide/what-is-a-universal-owner?from=guide)
2. [the risk a universal owner cannot diversify away](/guide/the-risk-a-universal-owner-cannot-diversify-away?from=guide)
3. [what the tragedy of the horizon costs a universal owner](/guide/what-the-tragedy-of-the-horizon-costs-a-universal-owner?from=guide)
4. [why universal owners act alone and lose together](/guide/why-universal-owners-act-alone-and-lose-together?from=guide)
5. [fiduciary duty and esg for a universal owner](/guide/fiduciary-duty-and-esg-for-a-universal-owner?from=guide)
6. why pension funds don't invest in nature (this post)
7. [what system-level investing looks like at a named place](/guide/what-system-level-investing-looks-like-at-a-named-place?from=guide)