Nature as Both a Transition Risk and Untapped Value Creation Opportunity

For many investors, biodiversity is first considered through the lens of regulatory compliance. In England, the introduction of Biodiversity Net Gain (BNG) has made biodiversity a formal planning requirement: new developments must result in a better-quality natural habitat than existed before. Developers must deliver a 10% improvement in biodiversity as a condition of planning approval, measured using a government developed and approved process. This gain must be secured for at least 30 years, placing long-term obligations on developers, asset owners and occupiers. Projects that fail to factor in BNG at an early-stage risk costly redesigns, delayed planning consent, or reliance on off-site biodiversity credits, which may be expensive without careful strategic planning and limited in availability.

While the BNG framework is most advanced in England, similar regulatory momentum is building across the wider UK and Continental Europe. The EU Taxonomy includes biodiversity among its core environmental objectives, and the European Commission aims to achieve no net land take by 2050. In parallel, countries such as France and Germany are embedding nature-based solutions, like green roofs and facades, into planning policy, supported by local incentives. Elsewhere, the Netherlands is piloting biodiversity credits and ecological assessments for new developments, Spain is integrating nature into planning through national and city strategies like Madrid’s Urban Forest, and Austria and Switzerland mandate green infrastructure in Vienna and Zurich (the trend is also evident beyond Europe, in countries including Canada and Singapore.) Together, these examples signal a broader shift: nature is evolving from an environmental aspiration to a regulatory and design imperative across urban markets.

Nature presents a clear transition risk. Shifting regulation, rising investor expectations and evolving market standards are exposing portfolios to planning delays, reputational damage and stranded value. Inaction compounds cost, particularly when nature is left out of early-stage planning and development decisions. But unlike many physical climate upgrades, which tend to address singular issues, nature-based solutions (NbS) can deliver multiple advantages, from urban cooling and improved drainage to flood resilience and land stabilisation. Indeed, NbS support climate mitigation measures and are estimated globally to be able to contribute up to 30% of global GHG mitigation required by 2030³.

Nature focused actions can also support tenant appeal, staff well-being and workplace retention, while strengthening the case for planning approval. For investors repositioning assets, these co-benefits increasingly shape what tenants and regulators expect from prime, resilient real estate. The business case may be harder to model, but the long-term value is broader and more enduring. Investment managers who move beyond compliance and integrate nature considerations into early-stage acquisition, development and refurbishment decisions will be better placed to meet evolving regulatory requirements and tenant expectations. Early adoption opens the door to opportunities that may remain inaccessible or significantly more expensive later.

Once asset managers recognise the strategic value of nature interventions, the next step is to embed nature positive decisions across the real estate value chain. Nature considerations should be factored into underwriting and asset strategy, just as energy efficiency is, across site selection, acquisition, development, refurbishment and ongoing management. This requires more than ad hoc greening or superficial landscaping. It starts with understanding where nature already exists across the portfolio, mapping the most material impacts and the best opportunities for creation and restoration alongside value chain engagement. The risks and opportunities that arise from these “nature gaps” will vary by sector and local context.

Market recognised tools used in the English BNG regulation can help establish a baseline, enabling investors to identify nature risks and prioritise action based on risk and planning exposure. Asset Managers should consult ecologists to design appropriate, site-specific interventions following the mitigation hierarchy. These include minimising land take and damage to existing habitats, enhancement of existing habitats, or habitat creation like rooftop meadows, rain gardens, nature corridors, or sustainable urban drainage features. Strategic off-site enhancements may also be suitable where on-site options are limited. Early-stage integration ensures nature is not treated as an afterthought but embedded as a core element of long-term asset strategy.

Managing nature risk at scale requires a broader perspective than bespoke site-level interventions. The leading emerging standard for embedding biodiversity into portfolio strategy is the Taskforce on Nature-related Financial Disclosures (TNFD), which helps financial institutions assess, report and act on their nature-related dependencies, impacts, risks and opportunities. Alongside TNFD, frameworks like the UK’s Biodiversity Net Gain Strategy and forthcoming ISO guidance on biodiversity are helping define consistent principles for planning, delivering and verifying nature outcomes across projects and portfolios. At its core is the four-phase LEAP approach: Locate, Evaluate, Assess, and Prepare, drawing on established methodologies already used by market participants.

LEAP begins by mapping where assets intersect with nature, then moves to evaluating dependencies and impacts, identifying material risks and opportunities, and preparing a strategic response. For real estate investors, this applies to individual sites and to broader workflows across planning, acquisition and refurbishment. While adoption is still in its early stages, TNFD is gaining traction among financial institutions. CBRE Investment Management has an ambition to evaluate biodiversity across its portfolio through this lens. Tools and data such as ENCORE, datasets provided by IBAT, and the NbS opportunity areas Screening included in the GRI Risk Viewer can help establish baselines and screen for potential impacts and opportunities where interventions can be prioritised.

The challenges remain real. Nature is highly localised, data is inconsistent, and there is no common quantitative definition of a “nature-positive” asset or portfolio. Outcomes often take years to materialise, but the direction of travel is clear. As regulation, public expectations and investor scrutiny converge, nature will become a greater strategic necessity. Integrating it into investment processes today secures a first-mover advantage that will be harder to replicate once new norms are established.

Investors that act now will be the ones to define what resilient, high-performing real assets look like in the years ahead. Nature is fast becoming a new marker of prime, both a risk lens and a lever for long-term value creation. As the thread that connects climate action, resilience, social value and future asset quality, integrating nature into investment strategy is no longer optional. It is a pathway to future-proof portfolios and deliver sustainable outperformance over the long-term.