Rich Stockdale, CEO of Oxygen Conservation
This summer, England, along with most of Europe, cooked in record-breaking heat. Across the country, the earth dried and cracked and verdant fields turned the color of straw. Yet hiking through the Leighon Estate in Devon on an August morning, the air felt cool and clean. The turf was squishy and moist underfoot, and the understory teemed with ferns and lichens and moss. Britain may be largely a quiltwork of farms and pastures, but here lay a vestige of an ancient temperate rainforest with its own microclimate.
“Look at that,” says Rich Stockdale, the founder and CEO of Oxygen Conservation, the investment firm that owns this 861-acre property about 200 miles southwest of London. He points out a cluster of tiny oak saplings that recently sprang up in a glade.
“That would have been a buffet to sheep,” he says. “They would have moved straight through them. They are nature’s most effective lawnmowers.”
There are no more sheep at Leighon Estate these days, as Stockdale’s team keeps livestock in check and lets the land do its thing. This isn’t a nature park — it’s an asset in a £200 million ($270 million) “natural capital” portfolio comprising 43,000 acres on 11 properties stretching from England’s West Country to the Scottish Highlands.
It’s the first portfolio of its kind in Britain. In June, the four-year-old firm sold £1 million worth of carbon credits stemming from Leighon. At £125 per ton, the credits were valued at twice the going rate in the European Union’s Emissions Trading System, the No. 1 cap-and-trade market in the world. For Stockdale, the deal shows investors are willing to pay a premium for carbon credits tied directly to thriving ecosystems rather than to offsets derived from fuzzy sources. But it’s just one deal. And Stockdale, a 42-year-old Brit with a tribal tattoo on his arm and a PhD in environment and data science, needs to pull off other, similar transactions across Oxygen’s portfolio.
His timing is good. In a surprising turn, natural capital is gaining traction with institutional investors just as ESG, lambasted by opponents as “woke capital,” is falling out of favor. In 2024, assets at the top-50 natural capital institutional investors jumped 11 percent, to more than $83 billion, according to IPE, which tracks the market. In the first half of 2025, natural capital firms raised $8.6 billion in almost two dozen funds — close to the pace of 2024, Preqin data shows. In contrast, global inflows into ESG offerings fell a whopping 50 percent last year and investors withdrew almost $12 billion in the first quarter, a record high, according to Morningstar.
Predicated on the idea that nature itself can be quantified in economic terms, natural capital has quietly grown in the shadow of ESG for about two decades. The proposition has little to do with renewable energy or combating fossil fuels. Instead, investors manage stuff that grows — namely, plantations of carbon-consuming hardwood trees and regenerative croplands — replenishing the soil and forestalling logging on arable land. By harvesting timber, crops, and livestock, natural capital investors earn steady returns that tend to be uncorrelated with the stock market. Gresham House, a London natural capital investment firm and the top forestry asset manager in the U.K., has generated average annual returns of 11.4 percent in its forestry funds since 2008. Eoin McDonald, the firm’s director of global natural capital, calls the strategy “gold with a coupon.”
Now a new breed of natural capital investor is pursuing a more experimental strategy: rewilding. Across its portfolio, Oxygen is transforming “monocultural” grazing lands and hunting grounds into habitats for native plants and endangered animals such as pine martens. It’s also trying to restore river systems and wetlands to improve water quality and flood control and revive soils exhausted by chemicals-fueled agriculture. The bet is that markets for premium carbon and biodiversity credits, as well as an emerging sector called “nature-based solutions,” are poised to grow as the world looks for practical ways to address the effects of a warming atmosphere.
“A forestry company wouldn’t buy an 861-acre estate unless they could plant 500 of it with trees,” says Stockdale as he wades through head-high bracken fronds. “We’ve planted 60. You have to see the wider benefits. It’s about the land, the water, the biodiversity. It’s about nature. And the carbon credit reflects all of that.”
The proposition is risky. Oxygen is relying on markets that are still nascent and have yet to prove they can scale. Some early attempts to capitalize on biodiversity failed to catch on. This year, Federated Hermes, the Anglo-American investment manager, shuttered a biodiversity equity fund because of dwindling assets. Moreover, the price of carbon in the voluntary credit market fell 61 percent, to $723 million, last year, according to the World Bank. The reason: Buyers are increasingly skeptical about the accountability of carbon offsets.
Yet something is shifting in green investing. As money managers are scrubbing ESG-related terms from their fund names, natural capital players with “real assets” are leaning in. Gresham House, which manages more than £8.7 billion, has tapped McDonald, a former senior portfolio manager at Nuveen, to invest in regenerative agriculture projects and nature-based solutions. In May, New Forests, a Sydney-based natural capital firm with $8 billion in assets, hired Anne Dillé-Weibel, a business development executive at Nomura, to cultivate institutional investing clients from her base in Paris. The firm is raising a A$750 million ($482 million) agriculture fund. And in January, Manulife, the Canadian insurer and No. 1 global natural capital player, closed a $480 million forest climate fund.
Tony Hansen, the former director of natural capital at McKinsey & Co., says the asset class makes more sense to investors. “Carbon is an intangible; it’s esoteric — whereas nature, they get it,” he tells Institutional Investor. “The bottom line is that natural capital is the foundation for life on Earth. And if we don’t protect it, there won’t be life on Earth.”
In the past, such sentiments might have elicited eyerolls from investors unconvinced about climate change. Not anymore. As torrential rain, extreme heat, and increasingly violent wildfires and floods devastate communities around the world, nature has become an urgent investment priority. In its latest risk survey of policymakers and business leaders, the World Economic Forum found the four gravest global threats over the next decade are nature-related, including biodiversity loss and ecosystem collapse. And no wonder. Since 1970, wildlife populations have plunged by about 70 percent. In the past 30 years, more than 420 million hectares of forests — an area almost half the size of the U.S. — have been lost. Many economists believe this damage will take a mammoth toll on global output; BlackRock says half the world’s GDP is dependent on nature in some way. To address the biodiversity crisis alone will take an average $711 billion in annual investment, according to a 2020 Paulson Institute report.
Still, there are doubts that natural capital provides an effective response to the crisis, let alone a method for investors to align their climate change agendas with their portfolios. For starters, there’s the assumption one can place a monetary value on wildlife or a river or any other natural element. Skeptics say the idea is specious — or as George Monbiot, an influential environmental author and activist, put it in a 2014 speech, “complete gobbledygook.”
Natural capital may also strike some as a fancy label for ESG. The latter approach, which relies on environmental, social, and corporate governance criteria, has been under pressure for some time. Critics such as Tariq Fancy, the former chief investment officer for sustainable investing at BlackRock, say ESG is mainly a marketing gimmick — greenwashing. It doesn’t help that the processes for standardizing and measuring its efficacy are convoluted and often confuse practitioners and ordinary investors alike.
Then there’s the politics. By blending environmental and social goals such as diversity, equality, and inclusion, ESG became a target for U.S. Republicans determined to curb DEI practices and climate change efforts. “During the Covid pandemic, the right came to believe ESG was smuggling in a leftist cultural agenda,” Fancy tells II.
The “anti-woke” blowback has been intense. In a pending lawsuit, the Texas attorney general is accusing BlackRock, State Street, and Vanguard of pursuing an “unlawful conspiracy” to support green energy at the expense of the fossil fuel industry, an allegation they deny. Other red states have passed legislation to stop their public pension managers from investing in ESG funds. And as the Trump administration rolls back regulations for greenhouse gas pollution, Wall Street giants are retreating. In recent months, Bank of America, JPMorgan Chase, and Citigroup, among other institutions, have dropped out of United Nations–backed net zero programs.
Amid the tumult, natural capital has been an oasis of calm. Focused solely on the environment, the proposition is tidy, easy to explain to clients, and, perhaps most important, straightforward to measure in terms of both conservation and returns. Moreover, most funds invest in land rather than securities, so the risk-reward ratio is driven by long-term economic growth trends rather than the volatility of the capital markets. And natural capital investors don’t have to wage proxy contests for shareholder resolutions, which draw a lot of heat. Even Fancy likes a lot of what he sees in natural capital.
“It’s an elegant model,” he says. “It’s much more rigorous intellectually, especially around what you are measuring, and it’s less contentious and politicized.”
But natural capital does face one significant challenge: growth. Are there enough investors with enough capital to truly make a difference? Does this asset class have scalability?
“This is what is lacking,” says Hansen, who runs a consulting firm in Bend, Oregon. “If investors are serious about natural capital and making an impact while making market-based returns, they need to put risk capital to work building scalable business models.”
Back at Leighon Estate, Stockdale ponders his own business model as he hikes across a meadow teeming with moles and buzzing with insects. A muscular man with a broad chest and a thatch of spiky hair, Stockdale looks like he’d be right at home in a rugby scrum. Oddly enough, in his 20s, this Yorkshire native loved American football and played in an English league. His team once went to the U.S. to play lower division squads. Standing 5-foot-7, he got some funny looks from the oversize Yanks. “They thought I was the mascot,” he says.
At the University of Hull, Stockdale wrote his dissertation on ways to measure large-scale river flow. Beginning in 2009, he worked as an environmental planner and then director at the U.K. Environment Agency and got to know ecosystems across several regions. In 2019, he jumped to the private sector as a director at Sanctus Limited, an environmental engineering firm. Stockdale believed the time was right to create a new asset class for estates that could be bought and restored at scale. He was inspired by Douglas Tompkins, the late billionaire co-founder of apparel makers The North Face and Esprit, who acquired more than 1,500 square miles of forests, lakes, and fjords in Patagonia and created a national park. The U.K. has a vastly different geography, of course, but the strategy, Stockdale felt, should be the same — buying properties of sufficient size to make rewilding efforts worthwhile.
The catch was that this type of conservation was typically carried out by philanthropies. Then Stockdale crossed paths with Mark Dixon, a British statistician who made his fortune founding ATASS, a research consulting firm that builds predictive models for the sports industry. An outdoorsman alarmed by the worsening climate and biodiversity crises, Dixon and some like-minded friends formed an organization called Oxygen House Group in 2008 to back worthy ventures. In Stockdale, Dixon found a kindred spirit. Both men wanted to apply data analysis and technology to the problem of environmental conservation. They also believed that rewilding, a burgeoning movement to restore native habitats that has become popular in the U.K., could make natural capital more impactful.
In 2021, Stockdale, Dixon, and the partners at Oxygen House Group founded and provided principal funding for Oxygen Conservation. A bit later, they secured additional funding from Blue & White Capital, the family office of Tony Bloom, majority owner of the Brighton & Hove Albion soccer club. Following a series of property deals, Oxygen is now putting its thesis to work. In Norfolk, a coastal region north of London, Oxygen plans to restore the natural meanders to a river on a 694-acre estate to support native fish and birds and improve its flood control system. On a 15,000-acre property in Scotland’s Cairngorms National Park, Oxygen has ended recreational bird shooting and stopped the practice of burning the moorland to prime the ground for killing game. Instead, Oxygen is letting the native plants and wildlife, including endangered species of birds, make a comeback.
At the Leighon Estate, which Oxygen acquired in 2022 from the descendants of the Singer sewing machine family, Stockdale’s team are also untaming the land. They stopped pumping the meadows with nitrogen-loaded fertilizers, which were great for growing grass for sheep but not so good for other plants. They also uprooted dozens of giant rhododendrons, a non-native flowering shrub that acidifies the soil, and left them to decay on the forest floor as a meal for microbes and fungi. To measure progress, Oxygen uses drones equipped with thermal sensors to track and count animals, and estate managers regularly survey the land to index the changing flora. These data points are itemized in the prospectuses for carbon credits.
Because the estate lies inside the Dartmoor National Park, sometimes people wander in, unwittingly threatening to upset the delicate ecosystem. Last summer, for instance, about 100 members of the Rainbow Family, a nomadic counterculture group, gathered on the property for a festival celebrating the lunar cycle. Charles Owen, Oxygen’s head of estates, trekked out to their camp and explained that their presence would prevent pied flycatchers, an endangered bird, from nesting in nearby boxes. The group reluctantly pulled up stakes and moved to another locale.
It probably wasn’t as pretty as Leighon, where a forest of beech, oak, and hawthorn hugs the banks of a river called the Becka Brook, which splashes its way through a series of falls downstream. Wild ponies can be seen munching wild grasses at the edge of the woods. In the distance looms Hound Tor, a granite outcropping that looked like a giant dog’s head and inspired the setting for Arthur Conan Doyle’s Sherlock Holmes tale The Hound of the Baskervilles.
“This would be an amazing home for beavers,” Stockdale says, passing a lake covered in lily pads. “I’d love to see them come back here.”
It’s jarring to contemplate such natural beauty as an asset. The lexicon that has sprung up around natural capital — phrases like habitat banks, landscape optimization, and payment for ecosystem services — seems at odds with environmental protection. Stockdale waves away the critique. For 25 years, Robert Costanza, an ecological economist who has shaped much of the thinking around natural capital, has argued that the valuation of ecosystems is not only doable but necessary. “Far from being impossible, it is happening every day, all the time, every time we make a decision that involves trade-offs that affect ecosystems,” Costanza, a professor at University College London, wrote in 2014.
Stockdale agrees. “Nature is a physical asset,” he says. “My narrative is that not putting a price on the environment has gone terribly. Treating it as priceless leads us to believe it’s worthless.”
In the U.K., Costanza’s trade-offs are becoming tangible as natural systems break down and cause economic losses. Negligent stewardship of watersheds, for example, has triggered severe sewage leaks in river systems and coastlines, causing health problems, damaging the tourism and fishing industries, and triggering costly litigation. Only 14 percent of the nation’s water systems are in good ecological health, according to a report released in August by the Green Finance Institute and the World Wildlife Fund. The study concluded that “chronic climate and nature degradation” in the U.K. will erase 4.7 percent in GDP by the end of the decade.
The U.K. is pursuing several policies to address the threat. In 2024, Parliament passed what is believed to be the first biodiversity legislation of its kind worldwide. The law requires property developments to deliver and manage a 10 percent improvement in biodiversity over a 30-year period. Because some projects won’t have the land, or the expertise, to comply with the mandate, they can purchase “biodiversity net gain” credits in a new marketplace. This change has sparked a boomlet in natural capital investing. Expanding beyond its strength in forestry, Gresham House funds have invested in a firm called Environment Bank that develops and manages habitats, often by leasing unproductive land from farmers. The firm then sells BNG credits to property developers and companies such as Amazon and Tesco, the U.K. retailing giant. Barclays is offering financial services in connection with these deals.
It’s hard to say at this early stage how regulatory pressure will spur demand for biodiversity credits. But the need for sustainable food, water, and air is expected to drive the value of nature-based services. “It’s irrelevant whether you believe in climate change or if natural capital didn’t exist as a concept,” McDonald says. “The long-term structural demand for natural capital is clear.”
Meanwhile, the management of natural capital’s bellwether assets — forestry and agriculture — is also changing. Last year, New Forests rolled out a A$600 million fund that brings a “whole landscape” approach combining forestry and agriculture. David Shelton, the global head of investments at the 20-year-old firm and an environmental scientist, says mixing woodlands, pastures, and cropland enriches the harvests, makes the land more efficient and sustainable, and drives up the potential for profitability. It’s a different mindset than focusing on one crop, and it’s one natural capital investors are embracing. “Taking a single-commodity approach often doesn’t maximize the potential benefits across the whole landscape,” Shelton tells II.
According to New Forests, the approach has the potential to add 2 to 4 percent to returns, on top of returns from the forestry business. Even better, Shelton notes, the biodiversity effect is shaping up to be a bonus. “In Australia, we have seen regulated carbon credits go for a premium when they are recognized to have biodiversity,” he says.
That’s exactly what Stockdale and other natural capital investors are counting on. For all the naysaying that has undercut ESG and climate change investing, there is still a lot of quiet capital committed to the theme. Sustainable funds hold $3.2 trillion in assets globally, according to Morningstar. Market leaders such as Norges Bank Investment Management, which oversees Norway’s $2 trillion pension fund, have vowed to assess climate risk as a key metric across their portfolios. In a record deal in May, Microsoft agreed to buy 18 million tons of carbon removal credits over the next 15 to 20 years from Rubicon Carbon, a climate investment firm. And despite the widely held belief that climate-focused investing lags the market, sustainable funds have outperformed traditional funds since 2018 by a 5-percentage-point margin, Morgan Stanley reports.
Stockdale, who is aiming to deliver 20 percent returns to his investors, is adding a property to his portfolio just about every quarter. He’s close to acquiring an estate in Scotland that will take the portfolio’s asset value to £275 million. He explains he wants to expand to 250,000 acres worth £1 billion by 2030 and then sell the portfolio. Stockdale says he is talking to potential partners in Europe and hopes to eventually buy and rewild estates in the U.S.
That would be quite a coup given that money managers in the U.S. are keeping a low profile — greenhushing, it’s called — as the Trump administration and its Republican allies step up opposition to ESG and deny global warming is even a thing. Stockdale, like so many investors in this space, believes the geophysical changes to come will make natural capital’s value proposition self-evident. And investors with conviction about climate change are out there.
“Just because it’s toxic to talk about those things in a Trumpian era doesn’t mean they have stopped investing,” Stockdale says. “They may be moving away from the labeling and the politics, but they’re still going to do this because it’s the right thing to do. These are the investments that will persist over time.”
