Schroders invests in Natural Capital Research

Founded in 2018, Natural Capital Research (NCR) is a data led science-based organisation which specialises in measuring natural capital* assets globally. Using leading modelling and data techniques, NCR enables landowners and corporates to map the natural capital provided by their landholdings. These include assets important for carbon storage, carbon sequestration, soil erosion protection, flood risk management, biodiversity, water quality and recreation. It also specialises in advising asset owners on how to enhance their natural capital value and providing the tools to report and validate increases in value over time.

NCR launched a leading-edge bespoke science based tool, NatCap Map and has delivered a number of high profile and successful projects for land owners, utility companies and corporates including Schroders. NCR's services provide scientifically rigorous research which can be used for the development of ESG, biodiversity, connectivity and net zero carbon strategies.

Schroders and Oxford Sciences Innovation (OSI) announced today their investment which will accelerate the development of NCR’s online platform to map natural capital assets globally, with further investment in leading AI and spatial analytics. With the significant growth in the monitoring and measurement particularly of carbon and biodiversity this platform will become an essential tool for asset owners, asset managers and providers of capital. It also has the potential to validate to the highest standards, nature-based carbon credits and the use of natural capital in flood risk management, water quality and soil improvement.

Professor Kathy Willis, Director, NCR commented:

"Viewing nature as an asset and putting it on the same balance sheet as a company’s other resources is no longer seen as an oddity. Governments, corporations, and individuals across the world are starting to understand the critical importance and value of the ecosystem services provided by their natural capital assets, not least in carbon storage and sequestration.

“The race is now on to determine the location and extent of these important assets, their value, and where and how to enhance them. We are therefore delighted to be working with Schroders and OSI as we embark on our journey to map, model and enhance natural capital assets across the world. These globally focused organisations are at the forefront of understanding the huge potential and possibilities of investing in natural capital assets; potential not only for offsetting of carbon and ESG but also for halting global biodiversity loss and restoring some of the most important ecosystems in the world."

The preservation of our natural capital has never been more prevalent. On 30 June 2021 the Environmental Audit Committee (EAC) has launched a paper to urge the Government to conserve and restore UK biodiversity and ecosystems amid grave concern that of the G7 countries, the UK has the lowest level of biodiversity remaining. The EAC found that existing Government policy and targets were inadequate to address plummeting biodiversity loss and called for significant changes to individual biodiversity policies.

Peter Harrison, Group CEO, Schroders commented:

“For too long the focus of companies and the finance industry has been on growth and accounting profits. The failure to properly account for the impact on nature’s capital is of real importance to long term investors. Natural Capital Research have the potential to fundamentally change how we value natural capital, and how this changes over time. Their data led, and science-based approach provides the basis for an exciting partnership.”

Martin Fiennes, Principal, Oxford Sciences Innovation commented:

“OSI is excited to be part of the work that NCR is doing to bring rigorous measurement and enhancement modelling to the natural capital field.”  

The NCR Board is made up of Professor Sir Dieter Helm, Professor Kathy Willis and Mr Julian Metherell.  Representatives from Schroders and OSI will join the Board.

As part of the financing round Blenheim Special Investments Holding Ltd, a vehicle advised by MW&L Capital Partners, is increasing its proforma shareholding in NCR.

*The term natural capital is used to describe those aspects of nature that provide important ecosystem services such as carbon (CO₂) sequestration, soil erosion protection, flood risk reduction, habitats for wildlife, pollination services and spaces for recreation and well-being and provides critical societal benefit to individuals, communities and populations across the globe. The combination of soils, species, communities, habitats and landscapes which provide these important ecosystem services are often called ‘assets’. The concept of viewing nature as natural capital which recognises the true value on the nature’s assets, is rapidly increasing in popularity. While the term first came into use in the 1970s, there are now growing calls for natural capital to be viewed as an economic asset, with the UN urging governments to look beyond GDP.