In early 2013, Gunnela Hahn, head of responsible investment for the €725 million ($811 million) portfolio overseen by the Church of Sweden, convinced her board of directors to take a leap of faith. The board voted to allocate €10 million to the inaugural fund offered by London-based Althelia Ecosphere, which aims to profit from investing in sustainable land use in Africa, South America and elsewhere.

Part of a burgeoning field called conservation finance, Althelia’s fund appealed to the Swedish church for several reasons. “I think the upside was very attractive, both financially and from a sustainability point of view,” Hahn says. The diversification benefits were another selling point, she adds: “We preferred it to private equity; it’s a real asset that you can see.”

At €100 million Althelia, the managers of the Climate Fund 1 look for opportunities that can generate multiple revenue streams. Among the fund’s investments: $7 million in financing for a $9.15 million farmer-owned cooperative that oversees the long-term protection of 570,000 hectares of rain forest in the Madre de Dios region of southeastern Peru . Some of the money will go toward deploying sustainable agricultural practices at more than 1,100 small cocoa farms. When the project reaches full scale, it will produce at least 3,200 metric tons of certified deforestation-free organic and Fairtrade cocoa annually, Althelia claims. Over the next seven years, the investment will also prevent the emission of 4 million metric tons of carbon from deforestation, the firm says, providing more revenue in the form of carbon credits.

So far, the Althelia fund has paid off for the Church of Sweden, according to Hahn, who says the return has been in the double digits.

Other investors in Althelia include AXA Investment Managers and Credit Suisse Group. Paris-based AXA IM contributes via its €200 million AXA Impact Fund, whose investors comprise 14 insurance companies; Credit Suisse has taken a stake on behalf of its institutional and high-net-worth clients.

In January the Swiss bank and the McKinsey Center for Business and Environment published a report called Conservation Finance — From Niche to Mainstream: The Building of an Institutional Asset Class . This follow-up to a 2014 study by Credit Suisse, consulting firm McKinsey & Co. and the World Wildlife Fund focuses on the swift rise of conservation finance toward mainstream acceptance and examines what must happen to sustain that trend.