The West Yorkshire Pension Fund (WYPF) is expanding its natural capital investments with a £27 million equity stake in Foresight Natural Capital. This move follows the growing trend of pension funds investing in forestry as a stable, inflation-resistant asset but extends to broader natural capital opportunities, including biodiversity projects, peatland restoration, and sustainable agriculture.
WYPF, which manages £19 billion in assets, sees natural capital as a key part of its alternatives strategy, which now makes up nearly 20% of its portfolio. Sustainable agriculture has gained attention due to its ability to support ecosystem health, enhance soil quality, and reduce carbon emissions, all of which contribute to long-term resilience and economic sustainability. However, Ward notes that transitioning to regenerative agriculture involves risks such as yield uncertainty, which can deter some investors.
In addition, WYPF’s investment in Rebalance Earth, which focuses on nature-based infrastructure solutions for climate change, highlights a new approach to climate resilience. This sector, traditionally funded by public and philanthropic sources, is now attracting institutional capital. Rebalance Earth uses innovative revenue models, such as Nature-as-a-Service (NaaS) contracts, to offer predictable cash flows while addressing sustainability challenges.
Both investments reflect WYPF’s strategy to target emerging natural capital markets and align with global sustainability goals, despite challenges in quantifying returns and impact in these evolving sectors.
