Over half of UK family offices already invest in natural capital strategies

· Family office investment into natural capital is expected to grow over next three years

· Motivations to invest include financial returns, climate risk mitigation and portfolio diversification

· A family member usually drives discussions around nature-based investing, over the CIO

55% of family offices in the UK are already allocating funds towards natural capital investment strategies, according to new research by investment manager Foresight Group in collaboration with Campden Wealth.

The survey research, covering 51 of the UK’s 250+ single family offices, showed that allocating to natural capital was not only well-established as an investment strategy but looks set to grow, with 59% of respondents stating they are moderately or highly likely to allocate to natural capital investments over the next one to three years.

The motivations for family offices to consider natural capital investments are mixed but primarily driven by financial returns (27%), climate risk mitigation (24%) and portfolio diversification (20%). Regenerative agriculture proved the most popular type of natural capital asset with 25% of respondents expressing an interest in this area, followed by 18% for afforestation (the establishment of new woodlands and forests).

Some of the barriers to entry for investing in natural capital included valuation uncertainty, the lack of track record for this relatively nascent area of investment, and regulatory risk.

Interestingly, discussions within family offices about sustainability and nature-based investing are typically led by a family member, rather than a CIO. For 76% of family offices, a family member is the driving force behind conversations on this topic.

Commenting on the results of the survey, Richard Kelly, Managing Director and Co-Head of Foresight Group’s natural capital strategy said: “These results are fascinating as they show quite clearly that family offices are already deeply involved in the flow of capital towards sustainability and nature-based investing – with more looking to invest in the near future. Family offices are uniquely long-term investors, often thinking in terms of future generations. When you take that kind of time horizon seriously, it becomes increasingly difficult to ignore the twin emergencies of climate change and biodiversity loss – and investing in natural capital is one of the most direct and impactful ways to address both.”

Robert Guest, Managing Director and Co-Head of natural capital, Foresight Group added: “Family members are particularly important in driving allocations to natural capital, with far more involvement in this area than a typical investment into equities or fixed income. This suggests that climate and environmental conviction, portfolio diversification and financial returns have a particularly symbiotic relationship when it comes to natural capital.”

Dominic Samuelson, CEO, Campden Wealth also added: “It is increasingly evident that family offices are investing and increasing their allocations to natural capital - such as sustainable forestry, agriculture, and nature-based solutions - due to growing pressure to align investments with values, generational wealth transfer, and the understanding that nature and the environment is fundamental to economic stability. This shift is enabled by a growing number of investment opportunities and specialists, such as the Foresight Group, who have a focus on turning natural assets into investable, data-driven opportunities.”

Natural capital is rapidly emerging as a major policy priority and investment opportunity across Europe. At EU level, the Biodiversity Strategy for 2030 commits to unlocking at least €20 billion per year for nature, reinforced by the newly adopted Nature Restoration Law, which sets legally binding targets to restore 20% of the EU’s land and sea by 2030 and all degraded ecosystems by 2050. In the UK, the government has committed to mobilising £500 million of private capital per year for nature recovery - a figure set to rise to over £1 billion annually by 2030. These developments show that natural capital is transitioning from an environmental concern to a mainstream investment class driven by regulation, public funding, and growing private market appetite.