---
title: why universal owners act alone and lose together
canonical_url: https://ensurance.app/guide/why-universal-owners-act-alone-and-lose-together
markdown_url: https://ensurance.app/guide/why-universal-owners-act-alone-and-lose-together.md
subtitle: "everyone's share is no one's job"
category: nature-finance
---

# why universal owners act alone and lose together

*everyone's share is no one's job*

A **collective action problem** is what happens when a group shares a benefit but each member pays for it alone. Mancur Olson set it out in *The Logic of Collective Action* in 1965: when each member's share of the gain is small and the cost of acting is private, the group gets less of the thing than all of its members want. For a universal owner, the shared benefit is a working economy. The cost of keeping it working lands on whoever moves first.

Under every holding in a universal owner'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 owner holds them. **Ensurance** is how one owner can fund one of them, at a named place, now, without waiting for the others. It is not the place.

:::johnson
**everyone's share is no one's job.** — An owner that holds a slice of everything gains a slice of any fix and pays the whole cost of making it. That is why the ground under the market is funded place by place, if at all, and rarely by the owners who depend on it.

[see the flows the ground produces →](/natural-capital/flows?from=guide)
:::

## why the problem binds a universal owner

A [universal owner](/guide/what-is-a-universal-owner?from=guide) holds a cross-section of the whole market for decades. Say one pension fund spends two years pushing a food company to stop sourcing from cleared land. If it works, the forest keeps standing, and every other holder of that company, and of every company that depends on that region, gets the benefit. The fund that did the work keeps only its own slice.

None of this needs bad faith. The cost is private and the gain is shared, so a rational member waits. The owner is large enough to care about the whole market and not large enough to capture what it spends on it.

| what an owner does | who pays | who gains |
|---|---|---|
| Engages a company on deforestation | The owner's stewardship team | Every holder of that company and of others on the same land |
| Votes against a board on nature risk | The owner, in time and relationship | Every shareholder, if the board changes course |
| Funds research or a disclosure standard | The owner, or a handful of sponsors | The whole market |
| Waits | Nobody, this year | Nobody now; every holder bears the cost later |

The last row is the trap. Waiting costs nothing in any single year. On the universal-owner argument, its cost arrives later as a weaker market, which every owner absorbs at once. [The risk a universal owner cannot diversify away](/guide/the-risk-a-universal-owner-cannot-diversify-away?from=guide) sets out why that loss lands in the part of the return diversification does not remove.

## what owners built to solve it, and what happened

Owners know this problem well, and their answer has been the coalition: pool the cost, share the work. In a 2017 survey reported on the Harvard Law School Forum on Corporate Governance, 94% of investors said they had led or supported one.

Then the coalitions were tested:

| date | what happened |
|---|---|
| February 2024 | JPMorgan Asset Management and State Street Global Advisors left Climate Action 100+. PIMCO and Invesco also left, and BlackRock moved its participation to BlackRock International. The initiative still lists more than 600 signatories. |
| November 2024 | The State of Texas and others sued BlackRock, State Street and Vanguard in the Eastern District of Texas, alleging that climate-coalition stewardship restrained coal output. |
| 13 January 2025 | Net Zero Asset Managers suspended its activities. |
| 1 August 2025 | The court largely denied the motion to dismiss in the Texas case. |
| 3 October 2025 | The Net-Zero Banking Alliance voted to cease operations. |
| February 2026 | Vanguard reportedly settled the Texas case without admitting wrongdoing. |
| 25 February 2026 | Net Zero Asset Managers relaunched with a revised commitment that, as reported, drops the 2050 reference. |

This post takes no view on the merits of the case or on why any firm left. The point is narrower. A coalition is itself a collective good. It needs members to agree and to stay. When the coalition is the only way to act, an owner's ability to act rises and falls with it.

Coalitions still do real work where they are focused. PRI Spring launched in June 2024 with more than 200 investors and about US$15 trillion, and engages 60 companies on deforestation and land degradation. Nature Action 100 published its first company benchmark in October 2024. NBIM, at about US$2 trillion, sets eight core nature expectations for its companies, from board oversight to TNFD-based disclosure, and can escalate to risk-based divestment. These tools move companies, and they deserve the credit. Water funds and easements, which put money into a named watershed or parcel, deserve the same. The owner's own tools still act on companies, not on the condition of a named watershed.

## why selling does not solve it

The other way out is to sell the worst holdings. Jonathan Berk and Jules van Binsbergen, in the *Journal of Financial Economics* in 2025, model divestment at realistic scale and find it changes a firm's cost of capital too little to change its real investment; they favor investing and using control rights instead. It is a calibrated model and it is debated. The shares pass to another owner, and the forest is where it was.

[Divest, reprice, or protect](/guide/divest-reprice-or-protect?from=guide) takes those choices apart. This post adds one observation: exit is the collective action problem in its quietest form. Each owner leaves alone, and the ground stays unfunded for all of them together.

## the ground has no shareholder meeting

Engagement, voting, coalitions and exit all act through companies. The living systems under those companies have no board, no proxy and no address for an engagement letter. A wetland that holds back a flood for a town and the plants beside it is, in many places, paid for by none of the people who rely on it.

[The free rider is standing on a keystone parcel](/guide/the-free-rider-is-standing-on-a-keystone-parcel?from=guide) works through that problem at a single parcel, and [what is a keystone parcel](/guide/what-is-a-keystone-parcel?from=guide) names the places that carry the most for others. The universal owner's version: every owner depends on the same places, no owner holds them, and funding them has meant waiting for a coalition, a government or a philanthropist to go first, or building a place-specific vehicle such as a water fund or a conservation easement. Those work, and they are the model this builds on. Each is built one place, and one negotiation, at a time.

## what changes when the place has its own account

A coalition asks owners to agree before anyone pays. There is another order: give the place an address, and let anyone pay its share alone.

That is what **ensurance** does. An account is addressed to a named place or purpose, such as a watershed, a stretch of coast or a pollination system. A certificate against it can be held by any owner, foundation, insurer or company. Proceeds fund the parcel first: its capital cost while it is still at risk, then its stewardship once it is secure, and the people who keep it are paid out of that work. Condition is read now, each period, from what the place is doing, not against a guess at what might otherwise have happened. The ledger is public, so anyone can see who paid, how much and when.

| | a coalition | an account addressed to a place |
|---|---|---|
| Who must agree first | The members, on a shared commitment | No one; each payor acts alone |
| What it acts on | Company boards and disclosures | The condition of a named place |
| How a free rider shows | It is invisible; the gain is shared | Payments sit on a public ledger, so who paid is visible, though a free rider still gains |
| If a member leaves | The coalition weakens | The account stays, and the other payments stand |
| Who governs the place | Outside its scope | The people already on the ground |

Olson also saw the way out. Small groups solve the problem more easily than large ones, and so do groups whose members each get something only they receive. An account at a named place may do both. It can turn a vast, diffuse group into a small one: the owners, insurers and companies whose holdings depend on that one watershed. And it gives each payor a dated public record that it paid, which it can report in its own words beside its stewardship work.

It does not make the other owners pay. The gain from a funded watershed still reaches them. What changes is that the first payor is no longer waiting, and the ledger lets the others see it.

Because no agreement among owners is needed, one payor's decision does not depend on the others'. This is not a claim about the legal standing of any coalition. The model is plural, not exclusive: ensurance does not claim to represent any place or to be its only funder. It does not govern the place either. Elinor Ostrom showed communities governing shared resources for generations without handing them to a state or a market. Governance already exists on the ground; the protocol funds and the people there decide. Which places get named, and on whose terms, is for the people who steward them to say.

Two live accounts show the shape: [risk-resilience.ensurance](/risk-resilience.ensurance?from=guide) and [water-abundance.ensurance](/water-abundance.ensurance?from=guide). Both have wallets deployed.

## what this does not do

It is small and early. On 24 October 2026 the protocol showed 2,085 active accounts, 86 with a wallet deployed, 26 policies and 191 coins, with about US$8 of trading over the prior seven days. It does not solve a pension fund's ticket size; [why pension funds don't invest in nature](/guide/why-pension-funds-dont-invest-in-nature?from=guide) says so plainly. A certificate is not a deed and not a claim on the land. Ensurance does not replace engagement, voting or a coalition that works, and it makes no decision prudent on its own. This post is not investment or legal advice; trustees and their counsel decide that.

What it changes is the order of moves: one owner can pay its share of a place without waiting for the others, and the others can see that it did.

Next, the roadblock trustees raise first: [fiduciary duty and esg for a universal owner](/guide/fiduciary-duty-and-esg-for-a-universal-owner?from=guide). If you work across a landscape where many funders each hold a piece, [regional collaboratives](/solutions/regional-collaboratives?from=guide&topic=universal-owners) shows how ensurance brings fragmented funding to one place. If your book already depends on a place you can name, [tell us which](/contact?from=guide&topic=universal-owners).

## frequently asked questions

### what is the collective action problem in investing?

It is the gap between what investors would all gain from a healthier market and what any one of them will pay alone to get it. The cost of engagement or stewardship is private; the gain is shared by every holder. So each has a reason to wait, and the shared good is under-provided (Olson, 1965).

### why don't investor coalitions solve the collective action problem?

They solve part of it; PRI Spring and Nature Action 100 still move companies. But a coalition needs members to agree and stay, and from 2024 to 2025 several lost members or paused activity. Coalitions also act on companies, not on the condition of a place.

### is divestment a way out of the collective action problem?

Not on its own. A 2025 model by Berk and van Binsbergen, which is debated, finds divestment at realistic scale barely moves a firm's cost of capital. The shares change hands; the land is unchanged. [Divest, reprice, or protect](/guide/divest-reprice-or-protect?from=guide) sets the three options side by side.

### how can one investor fund a shared natural asset without a coalition?

Fund the place directly, through an account addressed to it. With ensurance, an owner can hold a certificate against a named place, under its own rules; proceeds fund the parcel first, condition is read each period, and the public ledger shows who paid. No agreement among owners is needed. You can [browse certificates by place](/specific?from=guide) or [explore the catalog](/explore?from=guide).

## sources

Olson, M. 1965. *The Logic of Collective Action: Public Goods and the Theory of Groups*. Harvard University Press. — The definition: shared benefits are under-provided when each member's gain is small and the cost is private; small groups and member-only benefits ease the problem.

Harvard Law School Forum on Corporate Governance, 2017. — 94% of investors surveyed had led or supported a collaborative engagement.

[Climate Action 100+](https://www.climateaction100.org/) — The initiative and its signatory count; departures of JPMorgan AM, State Street GA, PIMCO and Invesco, and BlackRock's move to BlackRock International, as reported by Banking Dive and ESG Today, 2024.

[Net Zero Asset Managers](https://www.netzeroassetmanagers.org/) — Suspension on 13 January 2025 and relaunch on 25 February 2026 with a revised commitment (NZAM press release, 2026).

Net-Zero Banking Alliance vote to cease operations, 3 October 2025. Trade press, October 2025. — The alliance's closure.

[Climate Case Chart](https://climatecasechart.com/) — *Texas et al. v. BlackRock, State Street, Vanguard* (E.D. Tex., filed November 2024); the 1 August 2025 ruling on the motion to dismiss. ESG Dive, 2025–2026, for the reported Vanguard settlement.

[PRI](https://www.unpri.org/) — PRI Spring, launched June 2024: 200+ investors, about US$15 trillion, 60 companies engaged on deforestation and land degradation.

[Nature Action 100](https://www.natureaction100.org/) — First company benchmark, October 2024.

[Norges Bank Investment Management](https://www.nbim.no/) — Nature expectations for portfolio companies, and escalation to risk-based divestment.

Berk, J. and van Binsbergen, J. H. 2025. "The Impact of Impact Investing." *Journal of Financial Economics*. — Divestment at realistic scale changes cost of capital too little to change real investment; a calibrated, debated model.

Ostrom, E. 1990. *Governing the Commons: The Evolution of Institutions for Collective Action*. Cambridge University Press. — Communities governing shared resources without a state or market takeover.

[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 (this post)
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](/guide/why-pension-funds-dont-invest-in-nature?from=guide)
7. [what system-level investing looks like at a named place](/guide/what-system-level-investing-looks-like-at-a-named-place?from=guide)