New York, 26 September 2025 — A landmark report launched at New York Climate Week and the 80th UN General Assembly sets out a clear allocation pathway for institutional investors to channel 5–10 per cent of portfolios into nature-based assets by 2030, classifying ecosystems as productive infrastructure that deliver resilience, revenue, and systemic risk mitigation at scale.
The G20 Nature in the Portfolio Asset Allocation Guide, developed by the Sustainable Markets Initiative (SMI), Africa Investor (Ai), and Rebalance Earth, provides asset owners, consultants, and sovereign allocators with a practical framework to integrate nature into long-term strategy. It positions ecosystems as compliance-ready, investable infrastructure assets, underscoring that while investors can decarbonise their portfolios, they cannot afford to denature them.
From Risk to Resilience
- $80tn systemic risk: Unchecked ecosystem degradation could impose losses equivalent to the combined GDP of the world’s largest economies by 2050, undermining sovereign creditworthiness and portfolio resilience.
- Resilience premium: By treating ecosystems as infrastructure, investors can unlock long-duration, inflation-linked revenues while reducing systemic exposures.
- “This is about opportunity, not obligation. A credible allocation pathway exists to capture nature’s resilience premium, alongside private markets and infrastructure. Investors can decarbonise portfolios, but they cannot denature them.”
Fiduciary Logic
The Guide anchors nature allocations in recognised international accounting and disclosure standards:
- IAS 37 — ecosystems framed as liabilities when degraded.
- IAS 38 — ecosystem services recognised as intangible assets that can be valued and contracted.
- TNFD — provides a disclosure architecture for nature-related risks and dependencies.
Together, these frameworks validate nature as a compliance-ready asset class that is fiduciary-consistent, standards-aligned, and performance-competitive.
Case Studies and Africa’s GreenAlpha Framework
- Examples from Mozambique, Kenya, and the UK show how nature-linked contracts generate infrastructure-level cash flows.
- The Guide also highlights Africa’s GreenAlpha asset class — an institutional investor–led framework that structures Nationally Determined Contributions (NDCs) into a pipeline of bankable, infrastructure-style portfolios. These blended models are already delivering returns on par with private equity and infrastructure debt.
- Together, these cases validate nature’s ability to generate both performance and resilience premiums for institutional portfolios.
Sovereign Allocation Pathway
The Guide sets out a phased roadmap for sovereign allocators:
- 2025 → Align policy with TNFD, AfCFTA, and the AU 5% Asset Allocation Agenda.
- 2027 → Anchor at least 2% of AUM from domestic pensions and sovereign wealth funds.
- 2030 → Scale to 5–10% allocations, unlocking fiscal space, GDP growth, and jobs.
By classifying nature as an infrastructure-like asset on national balance sheets, governments can materially improve their sovereign credit profiles. Recognised ecosystem assets increase a state’s net worth and resilience metrics, lowering perceived risk for creditors.
This can:
- Strengthen sovereign ratings by reducing exposure to climate-driven GDP erosion.
- Narrow sovereign spreads and lower the cost of capital across the economy.
- Create fiscal headroom by attracting blended finance and institutional capital at scale.
This approach reframes ecosystems from being off-balance-sheet externalities to on-balance-sheet productive assets, providing sovereigns with a direct lever to cut financing costs while mobilising long-duration investment.
Policy Anchors and Global Alignment
The Guide aligns with the COP30 Belém Roadmap, the AU 5% Asset Allocation Agenda, and the African Continental Free Trade Area (AfCFTA), providing global legitimacy and regional ownership. Together, these frameworks create the enabling environment for investors to allocate to nature with confidence.
Call to Allocation
“This Guide demonstrates the dual wins of nature allocations. For sovereigns, bringing ecosystems onto the balance sheet strengthens credit profiles, narrows spreads, and lowers the cost of capital. For institutional investors, allocating 5–10 per cent to nature provides infrastructure-level, GreenAlpha-grade competitive returns that enhance portfolio resilience. This is not philanthropy — it is fiduciary duty, competitive advantage, and sovereign strategy.” — Dr Hubert Danso, CEO and Chairman, Africa Investor (Ai); Co-Chair, SMI Africa Council
Download the full report here:
Nature in the Portfolio: G20 Asset Allocation Guide
