5 trends shaping nature fintech
By Owen Dehmler-Buckley, Paula Palermo, and Janine Furtado
Financial technology, best known as fintech, leverages the power of technology to increase access to financial services, provide faster and more transparent transactions, and finance sectors and areas that the market has previously ignored. One of these areas — nature–has been marked by negative externalities, inefficiency in capital allocation, unequal access, and an absence of data and information. Nature fintech aims to resolve these market failures and create a world where finance, nature, and technology are symbiotic.
Innovative financial tools are sprouting, fostering a more vibrant and inclusive market to mitigate and reverse biodiversity loss, pollution, and climate change. In addition to these innovations, technological advancements are providing the infrastructure for nature-positive action to meet these challenges head-on. The combination of these two trends has given rise to a nascent yet impactful new market.
Enter “nature fintech”: an ecosystem of financial technology solutions harnessing AI, blockchain, remote sensing, and many other bleeding edge technologies to unlock the potential of nature-based financial innovation, fund conservation projects, resolve reporting requirements, and mitigate transition risks. These solutions increase financial transparency and inclusion, ensuring an equitable assessment of risks and opportunities in nature.
Here are 5 trends we’ve identified that are shaping nature fintech:
1. Investments and offsets
Noticing the gap between investor’s sustainability goals and the traditional track of financial investments, fintechs have made it simple to view your portfolio’s impact on nature, influencing investment decisions for individuals and corporate alike. Beyond awareness, these platforms also deliver in-reach solutions for users to improve biodiversity through responsible spending and investing. Financial instruments, such as biodiversity credits, nature-based ETFs, bonds, or SMAs, are specifically designed to finance nature-related projects or provide returns based on environmental outcomes.
CreditNature, the self-described first nature fintech platform, is an online marketplace where organizations can invest in natural assets, track their investment’s progress, and create and trade minted Nature Impact Tokens.
Sugi connects you to your investments, revealing their carbon footprint (quantified by trees lost), and compares them to benchmarks and similar investments, helping you explore greener investment options.
Nori helps farmers reap profits from regenerative farming by providing a platform to sell nature-based carbon credits. Their marketplace is rooted in web3 and can be directly integrated into a user’s websites or apps.
Agreena empowers regenerative farmers through blockchain-verified carbon credits. These credits, facilitated by smart contracts and digital payments, unlock new income from carbon markets. Farmers win financially, buyers gain sustainability claims, and soils are enriched sustainably.
Cultivo aims to accelerate investment in nature at scale by financing projects that restore and protect natural ecosystems. They identify high-quality projects, package them into investment products, and implement the projects in conjunction with landowners and local communities.
Ethic is a values-aligned investment service across multiple asset classes for investors looking to curate a separately managed account (SMA) that invests in organizations that regenerate ecosystems, mitigate biodiversity loss, and protect nature. Their AIME software is an automated trading and portfolio tool that manages this complexity, ensuring the best possible outcomes for the SMA.
2. Transactions and Microfinance
This trend covers solutions that allocate capital toward nature-related projects with financial inclusion and secure transactions in mind. Fintech-enabled microfinance is an important key to ensuring mutual benefits in the nature and biodiversity market. These solutions use crowdsourcing and target smallholders in the global south to encourage climate and nature-positive action on their farms, as well as providing resources to nature-related projects.
One Acre Fund leverages crowdsourcing fintech to provide micropayments to Zambian farmers, empowering them to implement nature-based solutions and offer income diversifying options through carbon credits.
Alipay: Ant Forest is a first-of-its-kind payment technology that incentivizes greener lifestyles while enabling users to contribute to reforestation and blue carbon projects through gamification. Considered an overwhelming success, this model has been replicated in other threatened regions like the Philippines.
GainForest is a decentralized green fund that uses machine learning and smart contracts to reward sustainable nature stewardship anywhere in the world. Their “NFTrees” – on-chain records of natural assets whose status is monitored through IoT and satellite data – allow investors to support reforestation while avoiding costly middlemen.
Aspiration rewards customers for shopping with sustainable businesses and allows them to reforest with every purchase made - all on an automated platform.
Epoch Blue’s platform enables secure insetting payments for suppliers, ensuring last-mile payments are secure and fortified by blockchain.
Handprint has developed a novel ‘impact voucher’ that allows companies to empower stakeholders to meaningfully engage with nature-positive projects. This solution allows companies to track the usage of these vouchers as well as the impact they bring.
3. Natural Capital Financial Products
Natural capital financial products are emerging as a new asset class built on natural capital and ecosystem services. These initiatives are supported by new technologies that provide the tools needed to secure investment and infrastructure. They create new products aligned with sustainability goals, directing capital towards nature-positive projects and creating novel (and long-lasting) means of investing in nature.
Bluebell Index - the Bluebell Index offers blockchain-backed environmental asset tokens called ‘BBLL’. Their unique approach is simple: valuing, certifying, and monetizing environmental assets.
Ekofolio - Ekofolio is a natural asset fintech company that is encouraging the fractional ownership of forests through blockchain, increasing liquidity and reducing transaction costs.
Rize ETF - Rize ETF invests in 100 companies that are poised to take on climate change and nature loss. Guided by the EU Taxonomy for Sustainable Activities, their investments include organizations with biodiversity concerns as a major pillar of the fund.
The Landbanking Group is a social benefit company aiming to revolutionize land use by making nature an investable asset class. They achieve this through "Nature Equity," a system rewarding land stewards for sustainable practices and allowing businesses and investors to support healthy ecosystems and protect against nature-related risks.
Rabobank, in partnership with FrieslandCampina and WWF, is developing a loan product for Dutch dairy farmers. This offering, which combines traditional and digital elements, will link loan costs to a set of biodiversity metrics.
Lynx Global Biodiversity Fund. Lester Asset Management has launched a biodiversity fund for publicly traded companies that operate to regenerate and restore biodiversity. Unique amongst other biodiversity funds due to their prioritization of biodiversity uplift relative to energy transition companies etc., Lynx has integrated the TNFD, ESG strategies, and Nature Action 100 considerations into their investment strategy.
4. Risk Assessment and Insurtech
Increasing pressures on the regulatory landscape are proving the necessity for disclosures on nature-related risk exposures. Nature fintech solutions step in to provide the tools to better understand and model data, thus providing decision-makers with the information necessary to take action towards mitigating these risks. For organizations intrinsically dependent on nature (e.g. all of them), these solutions will become indispensable.
Etherisc specializes in on-chain parametric products. One of their leading fields is insuring reforestation-based carbon credits.
Descartes Underwriting’s parametric insurance for nature-related risks uses IoT and satellite data to monitor natural disasters (wildfire, drought, etc.) and issue payment accordingly.
Kita insures nature-based carbon credits. Sequestration through reforestation takes years that we do not have. But, buying credits before their impact is delivered is risky. Kita insures these credits, increasing trust in forward financing for natural climate solutions.
Earth Analytics Group uses scientifically robust processes to assign financial value to ecosystem services. In doing so, they help companies re-price their risks on balance sheets and identify stranded assets as well as opportunities for capital reallocation.
Dunya Analytics offers a digital platform that helps companies understand and manage their nature-related financial risks, aligning with the Taskforce on Nature-related Financial Disclosures (TNFD) framework.
Climate X Helps organizations become more resilient to the impacts of climate change by quantifying, at an asset level, the probability and severity of weather events decades before they happen.
5. Compliance and Regtech
A rising tide of nature reporting frameworks are emerging for companies and financial institutions. These organizations are increasingly being asked to measure and disclose their impacts, dependencies, and risks arising from their upstream, downstream, and present operations. While various frameworks such as GRI, TNFD, SBTN, ISSB, ESRS, CDP, etc. provide an understanding of impact drivers and pressures, the nitty-gritty of reporting requirements within these frameworks remains unclear and complex for organizations. Additionally, an increase in the volume of data necessary to report with accuracy as well as the complexity of the required metrics warrants the need for tech-enabled solutions. Regulation technology, known colloquially as ‘RegTech’ offers a solution to all of this. Regtech companies use big data, cloud computing, and AI to meet reporting requirements and achieve ESG goals.
Kanop uses satellite imagery and AI to evaluate above-ground biomass. Users employ this platform for carbon projects but also to track compliance with deforestation regulations like the EUDR. Kanop’s powerful platform further assists organizations with large land footprints to meet corporate sustainability reporting (CSR) standards like the CSRD and TNFD.
briink uses AI to scan internal documents and uncover relevant ESG insights, expediting reporting and scaling sustainability reporting far beyond current capabilities.
Nadar uses satellite data in their SaaS to track deforestation across supply chains, allowing organizations transparent and reliable data when reporting against the EUDR.
LandGriffon empowers companies to measure, manage, and transform agricultural supply chain impacts using an open scientific methodology.
NatCap is a nature intelligence company that assists agriculture producers in understanding their interactions with nature and reporting requirements.
Metabolic Software (Link) is a sustainability tracker and risk assessment digital platform that enables organizations to prepare data for and report against a number of different frameworks.
While the definition of nature fintech in such a new market can sometimes be a moving target, the Nature Tech Collective has pinpointed these five trends to start a discussion on what nature fintech is about. Our insights are more than just observations—they're an invitation for discussion and a call to action.
What are your thoughts on nature fintech? What trends are you most excited about? Join us in demystifying this field and paving the way for a future where nature thrives, powered by financial innovation.