The advent of finance-grade data will push nature into the investment mainstream in 2026, says Steven King, Senior Vice President, Business Development Resource Management Service.
While global equities markets ended up delivering strong returns in 2025 despite turbulence over much of the year, market uncertainty – including fears of an AI bubble together with new regulations, policy shifts, and climate volatility introducing new risks – could mean a different class of funds may be in vogue in 2026.
Recent trends have indicated a growing shift to safe haven assets such as passive global equities. And as regulation, climate volatility and inflation converge as key considerations within portfolios, natural assets such as land, forests, water systems and the ecological functions are stepping into the spotlight.
In Europe, a flurry of regulatory shifts began throughout 2025 and will continue into 2026, with the likes of the EU Deforestation Regulation (EUDR), the Corporate Sustainability Reporting Directive (CSRD) and the rapid mainstreaming of the Taskforce on Nature-related Financial Disclosures (TNFD). These changes will have tangible impact for investors, forcing companies and capital markets to treat land-use impacts as financial exposures.
A new era
CSRD – although watered down from its initial scope – will still mean mandatory, assured sustainability disclosure for big businesses, creating the largest expansion of auditable environmental data in capital markets history. And while the EUDR has been subject to delay, from late 2026 large companies trading commodities like soy, beef, coffee, cocoa and rubber will be required to prove their supply chains are deforestation-free. Meanwhile, TNFD provides the framework that links ecological impacts to risk management. Combined, they create something investors have never had before: finance-grade nature data. For asset managers, that means land-use externalities, once invisible, suddenly show up in credit spreads, M&A due diligence, covenant negotiations and underwriting standards. Real assets with verified ecological integrity become lower-risk propositions. Those without it become latent liabilities.
2026 will therefore see many of these regulations go from planning to implementation. Markets can begin pricing natural capital with the same seriousness they apply to emissions inventories and energy exposure. For investors, this is not a compliance story; it’s a re-rating story.
But regulation is only one half of the shift. Climate resilience and biodiversity are increasingly being seen as financial risks, not just environmental afterthoughts. As TNFD moves from concept to implementation and CSRD begins forcing companies to disclose their dependencies on soil health, water stability and ecosystem functions, markets are waking up to the fact that ecological integrity underpins economic integrity.
This is pulling natural capital directly into the path of mainstream capital allocation. The EU’s emerging nature-positive agenda, combined with national net zero strategies in the UK and European Union, places land and forests at the centre of transition delivery. As companies shift from committing to executing on net zero through actual removal and restoration projects, demand for high-integrity natural capital is poised to grow. Governments and development banks are beginning to direct public and blended finance toward restoration and preservation (such as the Tropical Forest Forever Facility announced at COP30), lowering the cost of capital for credible projects, and making them financially viable for institutional investors.
Among natural assets, timberland stands out. Institutional investors who once viewed forestry as a slow, niche corner of real assets now see an asset class with three qualities the financial system suddenly prizes: biodiversity integrity, climate resilience and long-dated cash flows aligned with nature-positive and net zero policy. Timberland offers carbon sequestration, sustainable materials, long-term value, and crucially, resilience. In a world of supply-chain disruption, climate risk and regulatory scrutiny, high-integrity timberland is ideally positioned to serve as a defensive, inflation-linked asset with potential upside in value and cash flow. Long-term data from the National Council of Real Estate Investment Fiduciaries, for example, reveals that over the last three decades, US timberland in particular has delivered returns of, on average, 9.1% annually.
Impact measurement
A key issue however is that, until recently, no standardised methods have existed for measuring comprehensive biodiversity impact. But this is starting to be addressed. Last October, the International Organisation for Standardisation (ISO) released the world’s first international standard designed to help organisations assess their impacts and dependencies on biodiversity. ISO 17298 is designed to work in alignment with existing sustainability frameworks and standards, including ISO 14001 (environmental management), ISO 26000 (social responsibility), the TNFD, and the UN Sustainable Development Goals (SDGs). The ISO standard provides auditable, standardised metrics that transform broad environmental claims into concrete, verifiable action. For banks, investors, and insurers, that means TNFD disclosures are no longer narrative statements but quantifiable data points, tied directly to real-world performance.
Measuring biodiversity impact across large forestland portfolios in particular is inherently challenging due to their scale and ecological diversity. Portfolios spanning thousands of acres across different ecosystems require expensive, specialised monitoring that is difficult to standardise, but aggregating meaningful metrics across properties with varying ecological conditions and management histories into coherent portfolio-level assessments proves extremely complex. Investor allocations to biodiversity are growing quickly, alongside a fast-moving push to strengthen data, metrics, and reporting readiness.
RMS recently commissioned leading environmental consultancies Nature Positive and RSK Wilding to help us develop a new Ecosystem Integrity Index designed to track changes in ecosystem integrity over time tailored to our forestland holdings. While the index is designed specifically for working forests where trees are harvested and replanted for commercial timber production while supporting conservation objectives, but its underlying principles can be applied to other land holdings with appropriate modifications to account for different species, habitats and ecological conditions.
Credible strategies and pathways
For investors, this all means the opportunity is there to identify assets with verifiable ecological integrity, credible climate resilience strategies and pathways to produce regulated, high-integrity carbon removals. The winners will be those who treat natural capital not as a sustainability sideline but as the foundational real asset of the next decade. 2026 is set to be the year natural capital becomes not just an exotic allocation for niche funds, but a mainstream real-asset category attracting serious institutional capital.
The advent of finance-grade data will push nature into the investment mainstream in 2026, says Steven King, Senior Vice President, Business Development Resource Management Service.
While global equities markets ended up delivering strong returns in 2025 despite turbulence over much of the year, market uncertainty – including fears of an AI bubble together with new regulations, policy shifts, and climate volatility introducing new risks – could mean a different class of funds may be in vogue in 2026.
Recent trends have indicated a growing shift to safe haven assets such as passive global equities. And as regulation, climate volatility and inflation converge as key considerations within portfolios, natural assets such as land, forests, water systems and the ecological functions are stepping into the spotlight.
In Europe, a flurry of regulatory shifts began throughout 2025 and will continue into 2026, with the likes of the EU Deforestation Regulation (EUDR), the Corporate Sustainability Reporting Directive (CSRD) and the rapid mainstreaming of the Taskforce on Nature-related Financial Disclosures (TNFD). These changes will have tangible impact for investors, forcing companies and capital markets to treat land-use impacts as financial exposures.
A new era
CSRD – although watered down from its initial scope – will still mean mandatory, assured sustainability disclosure for big businesses, creating the largest expansion of auditable environmental data in capital markets history. And while the EUDR has been subject to delay, from late 2026 large companies trading commodities like soy, beef, coffee, cocoa and rubber will be required to prove their supply chains are deforestation-free. Meanwhile, TNFD provides the framework that links ecological impacts to risk management. Combined, they create something investors have never had before: finance-grade nature data. For asset managers, that means land-use externalities, once invisible, suddenly show up in credit spreads, M&A due diligence, covenant negotiations and underwriting standards. Real assets with verified ecological integrity become lower-risk propositions. Those without it become latent liabilities.
2026 will therefore see many of these regulations go from planning to implementation. Markets can begin pricing natural capital with the same seriousness they apply to emissions inventories and energy exposure. For investors, this is not a compliance story; it’s a re-rating story.
But regulation is only one half of the shift. Climate resilience and biodiversity are increasingly being seen as financial risks, not just environmental afterthoughts. As TNFD moves from concept to implementation and CSRD begins forcing companies to disclose their dependencies on soil health, water stability and ecosystem functions, markets are waking up to the fact that ecological integrity underpins economic integrity.
This is pulling natural capital directly into the path of mainstream capital allocation. The EU’s emerging nature-positive agenda, combined with national net zero strategies in the UK and European Union, places land and forests at the centre of transition delivery. As companies shift from committing to executing on net zero through actual removal and restoration projects, demand for high-integrity natural capital is poised to grow. Governments and development banks are beginning to direct public and blended finance toward restoration and preservation (such as the Tropical Forest Forever Facility announced at COP30), lowering the cost of capital for credible projects, and making them financially viable for institutional investors.
Among natural assets, timberland stands out. Institutional investors who once viewed forestry as a slow, niche corner of real assets now see an asset class with three qualities the financial system suddenly prizes: biodiversity integrity, climate resilience and long-dated cash flows aligned with nature-positive and net zero policy. Timberland offers carbon sequestration, sustainable materials, long-term value, and crucially, resilience. In a world of supply-chain disruption, climate risk and regulatory scrutiny, high-integrity timberland is ideally positioned to serve as a defensive, inflation-linked asset with potential upside in value and cash flow. Long-term data from the National Council of Real Estate Investment Fiduciaries, for example, reveals that over the last three decades, US timberland in particular has delivered returns of, on average, 9.1% annually.
Impact measurement
A key issue however is that, until recently, no standardised methods have existed for measuring comprehensive biodiversity impact. But this is starting to be addressed. Last October, the International Organisation for Standardisation (ISO) released the world’s first international standard designed to help organisations assess their impacts and dependencies on biodiversity. ISO 17298 is designed to work in alignment with existing sustainability frameworks and standards, including ISO 14001 (environmental management), ISO 26000 (social responsibility), the TNFD, and the UN Sustainable Development Goals (SDGs). The ISO standard provides auditable, standardised metrics that transform broad environmental claims into concrete, verifiable action. For banks, investors, and insurers, that means TNFD disclosures are no longer narrative statements but quantifiable data points, tied directly to real-world performance.
Measuring biodiversity impact across large forestland portfolios in particular is inherently challenging due to their scale and ecological diversity. Portfolios spanning thousands of acres across different ecosystems require expensive, specialised monitoring that is difficult to standardise, but aggregating meaningful metrics across properties with varying ecological conditions and management histories into coherent portfolio-level assessments proves extremely complex. Investor allocations to biodiversity are growing quickly, alongside a fast-moving push to strengthen data, metrics, and reporting readiness.
RMS recently commissioned leading environmental consultancies Nature Positive and RSK Wilding to help us develop a new Ecosystem Integrity Index designed to track changes in ecosystem integrity over time tailored to our forestland holdings. While the index is designed specifically for working forests where trees are harvested and replanted for commercial timber production while supporting conservation objectives, but its underlying principles can be applied to other land holdings with appropriate modifications to account for different species, habitats and ecological conditions.
Credible strategies and pathways
For investors, this all means the opportunity is there to identify assets with verifiable ecological integrity, credible climate resilience strategies and pathways to produce regulated, high-integrity carbon removals. The winners will be those who treat natural capital not as a sustainability sideline but as the foundational real asset of the next decade. 2026 is set to be the year natural capital becomes not just an exotic allocation for niche funds, but a mainstream real-asset category attracting serious institutional capital.
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