Key Learnings from Episode 13: Can Nature Become an Asset Class? with Rob Gardner, CEO and Co-Founder of Rebalance Earth

In this episode of Beyond the Raise, Rob Gardner explains how Rebalance Earth is working to make nature investable. By treating restored rivers, peatlands, soil and other natural systems as infrastructure, the company aims to reduce the financial risks caused by flooding, drought and poor water quality. The conversation explores natural capital, market creation, institutional investment, fundraising, credibility, AI adoption and the challenge of assembling a multidisciplinary team.

Nature Can Be Treated as Infrastructure

Rebalance Earth is the third business Rob has founded. After co-founding Redington and mallowstreet, and spending more than 25 years across investment banking, pension consulting and asset management, he is now combining his financial experience with his academic background in geography, glaciology and hydrology.

The company invests in nature restoration as though it were infrastructure. A restored landscape can help protect energy networks, transport systems, homes, businesses and water supplies from the effects of climate change and nature loss.

If these projects reduce measurable risks for organisations, they can generate financial returns for investors while improving the natural environment.

Key Takeaways

• Natural systems support the infrastructure and services on which businesses depend.

• Restoring nature can create financial as well as environmental value.

• Expertise from established investment markets can be applied to natural capital.

• Nature restoration can strengthen resilience across entire communities and economies.

Natural Capital Has Historically Been Treated as Free

Natural capital describes the value provided by nature through ecosystem services. These include clean air, clean water, water storage and the healthy soil required to produce food.

Nature has traditionally been treated as a commodity. Trees are grown and harvested for timber, while crops are cultivated and harvested for food. Although regenerative forestry and agriculture are becoming more prominent, these models still depend on extracting something from the natural environment.

Rebalance Earth is exploring whether investors can instead earn returns from the services nature provides while leaving the underlying natural asset intact.

Potential revenue streams include payments for flood mitigation, drought resilience, water quality, biodiversity and carbon. Together, these payments can create the cash flows required to repay investors.

Key Takeaways

• Nature provides valuable services that have rarely been reflected in financial models.

• Traditional natural capital investments have often been extractive.

• Ecosystem services can potentially generate revenue without destroying the underlying asset.

• Multiple environmental outcomes can be combined to create an investable revenue model.

Environmental Risk Can Be Converted into Financial Risk

Rob argues that the financial calculations involved in valuing nature are not necessarily more complicated than pricing a long-term Power Purchase Agreement. The greater challenge is that society has historically taken nature for granted.

In the UK, peatlands have been damaged, rivers have been straightened, soil health has deteriorated and vegetation has been removed. Degraded landscapes cannot retain as much water, so heavy rainfall moves downstream more quickly and increases the risk of flooding.

That flooding can damage roads, railway lines, factories and homes. Extreme heat and drought can also disrupt transport, water supplies and business operations.

Once organisations calculate the financial cost of these disruptions, they can begin to establish the value of preventing or reducing them.

Key Takeaways

• Environmental damage creates measurable operational and financial consequences.

• Businesses need to translate climate and nature risks into specific costs.

• The value of restoration becomes clearer when compared with the cost of disruption.

• Nature can be positioned as an investment in business resilience.

Creating a New Asset Class Requires Alignment

Rob compares financing a river catchment with financing a shopping centre. A shopping centre needs large anchor tenants alongside smaller businesses and supporting infrastructure. In a river catchment, those anchors might be water companies, transport operators or energy distribution network operators.

Other businesses, local authorities and communities within the catchment can then contribute because they also benefit from the restoration work.

The comparison is not exact. A river catchment may involve numerous farmers and landowners, alongside many different organisations benefiting downstream. Aligning these groups is more complicated than financing a conventional property or infrastructure project.

Rebalance Earth is therefore adapting established structures from the property and infrastructure sectors to support whole-landscape restoration.

Key Takeaways

• Large organisations can act as anchor customers within a river catchment.

• Several beneficiaries may contribute to the same restoration project.

• Landowners, companies and investors must be aligned around shared outcomes.

• Existing infrastructure finance models can provide a starting point.

Nature-Based Solutions Must Stand Up on Their Own Merits

For natural capital to become an established asset class, organisations must first recognise that climate change and nature loss are creating operational risks now, rather than at some distant point in the future.

Nature-based solutions must then demonstrate that they can address those risks effectively. Peatland restoration, river restoration, healthier soil and the reintroduction of species such as beavers can all help landscapes retain and clean water.

These interventions need to be assessed against conventional engineered alternatives such as flood defences, concrete infrastructure and water-storage systems.

The final requirement is a financial structure through which organisations can pay for the outcomes. Rebalance Earth is developing Resilience Purchase Agreements, inspired by the Power Purchase Agreements that helped accelerate the renewable energy market.

Key Takeaways

• Awareness of environmental risk is only the first step.

• Nature-based solutions must demonstrate measurable performance.

• Restoration needs to compete with conventional engineered alternatives.

• Clear contractual structures are essential for creating investor confidence.

Long-Term Investors Are Driving Early Adoption

Pension funds have emerged as some of the strongest supporters of natural capital because they operate over exceptionally long time horizons.

A pension fund may be responsible for members who will continue drawing benefits many decades into the future. This encourages trustees to consider structural risks rather than focusing only on short-term investment performance.

Large pension funds may also be universal asset owners. Their portfolios are so extensive that they cannot simply diversify away from systemic risks such as climate change and nature loss.

Once those risks have been identified, pension funds can engage with companies, invest in more resilient assets or allocate capital to projects that help protect the rest of their portfolios.

Key Takeaways

• Pension funds are well suited to investments with long-term outcomes.

• Large investors cannot diversify away from every systemic risk.

• Natural capital can provide resilience for other portfolio assets.

• Investors need to connect broad environmental risks with specific holdings.

Making Nature Investable Requires Reliable Demand

Money has traditionally flowed into nature through philanthropy or voluntary markets. These approaches can help fund restoration, but they do not always create the predictable demand required by long-term investors.

Compliance mechanisms can provide greater certainty. Biodiversity Net Gain, for example, requires most new developments in England to achieve a measurable 10% improvement in biodiversity. If this cannot be delivered on-site, developers can purchase off-site units.

However, markets shaped by government policy carry the risk that regulations will change. Rebalance Earth therefore wanted to establish a fundamental commercial reason for companies to pay for ecosystem services.

The business chose to focus particularly on flooding, drought and water quality. These issues can directly affect business operations, maintenance costs, regulatory penalties and access to essential water supplies.

Key Takeaways

• Voluntary payments do not always provide dependable long-term demand.

• Compliance markets can create clearer financial incentives.

• Investors need to consider the risk of future policy changes.

• Commercial demand is stronger when nature addresses an essential business problem.

Resilience Can Be Quantified and Contracted

Rebalance Earth moves from environmental risk to operational risk and then to financial risk.

For a railway operator, flooding may lead to delays, penalties and higher maintenance costs. Those costs can be calculated annually, forecast over ten or 15 years and tested against different climate scenarios.

The next stage is estimating how far a nature-based intervention could reduce that risk. If an organisation expects flooding to create £100 million in costs over a decade, and landscape restoration could reduce those losses by 50%, the intervention has a potential value of £50 million.

A proportion of that value can then be paid through a Resilience Purchase Agreement. These agreements can be tailored to the needs of individual organisations while using established financial and contractual principles.

When several organisations within a catchment agree to pay for different outcomes, the combined revenue can support institutional investment.

Key Takeaways

• Environmental risks must be connected to operational consequences.

• Operational disruption can be converted into forecast financial costs.

• The value of an intervention depends on how far it reduces those costs.

• Contracted payments can turn resilience into an investable revenue stream.

Institutional Capital Needs Scale and Certainty

England’s Local Government Pension Scheme investment pools manage approximately £400 billion. An allocation of 3% to natural capital would represent around £12 billion.

However, pension funds still need to be confident that projects can provide suitable risk-adjusted returns. Rebalance Earth is targeting a 10% return while offering diversification from global equities and greater resilience for UK property and infrastructure holdings.

Investors also need opportunities large enough to absorb meaningful amounts of capital. As pension funds consolidate, individual investment sizes increase. Nature restoration must therefore be structured as large, repeatable projects rather than a collection of disconnected local schemes.

Government could accelerate the market by creating greater policy and revenue certainty. Rob points to the offshore wind market, where early government support helped attract private investors and reduce the cost of capital over time.

Key Takeaways

• Institutional investors require appropriate financial returns.

• Natural capital can provide diversification and portfolio resilience.

• Projects need to be large and repeatable enough to absorb institutional capital.

• Government support can help reduce risk during the early stages of market creation.

Different Investors Are Needed at Different Stages

Rebalance Earth’s fundraising journey began with Rob and co-founder Walid Al Saqqaf contributing their time as sweat equity. The company later completed a small angel round before securing investment from West Yorkshire Pension Fund.

West Yorkshire Pension Fund took a 25% ownership stake in the business and subsequently committed £25 million as a cornerstone investor in its first fund.

At the time of recording, Rebalance Earth had secured FCA approval, begun deploying capital and was preparing to launch its fund. The company hoped to raise approximately £150 million before moving into a period of large-scale deployment between 2027 and 2030.

Rob describes raising money for an unfamiliar asset class as extremely difficult. Founders need to identify investors with the right capital, interests, risk appetite and governance for the company’s current stage.

Some investors may support the concept but not be ready to participate until more projects have been delivered. Understanding where each investor sits helps founders focus their time and develop relationships in the right order.

Key Takeaways

• New markets require different forms of capital as they develop.

• An interested investor is not necessarily ready to invest immediately.

• Founders need to match each investor with the appropriate stage of growth.

• Honest qualification can prevent time being spent on unsuitable opportunities.

Credibility Is Built Through Evidence and Expertise

Credibility is particularly important when asking investors to support something that has not previously been delivered at scale.

Rebalance Earth established a set of milestones to demonstrate progress. These included persuading companies to pay for nature-based outcomes, deploying capital, attracting additional investors, securing FCA approval, launching the fund and building the team.

The company has assembled expertise across private equity, infrastructure, property and river science, supported by a wider group of advisers.

No single person is likely to possess every capability required to establish a new asset class. Investors therefore need confidence that the team collectively has the necessary knowledge, judgement and culture.

Key Takeaways

• New markets require more evidence because investors lack established comparisons.

• Clear milestones help demonstrate that an idea is becoming viable.

• Multidisciplinary teams can strengthen investor confidence.

• Credibility is built through progress, expertise and consistent delivery.

AI Is Changing How Rebalance Earth Scales

Rebalance Earth has set an ambition for a team of 20 to do the work of 40 and create the impact of 80.

The company’s original financial model assumed that headcount would grow relatively linearly with assets under management. Developments in AI have challenged that assumption by allowing the team to complete work that would previously have required more people or external support.

As an FCA-authorised fund manager, Rebalance Earth needed to balance productivity with data security, cybersecurity and regulatory risk. It chose to standardise its approach around Claude, including Claude Cowork and, for some employees, Claude Code.

The company supports adoption through regular workshops, individual tutorials and group sessions. AI is now being used across marketing, finance, financial modelling and website development.

Key Takeaways

• AI can help smaller teams achieve significantly more.

• Adoption needs to be deliberate rather than fragmented.

• Regulated businesses must balance innovation with security and compliance.

• Training helps ensure productivity gains are shared across the organisation.

Mindset Will Become More Important in Hiring

Rebalance Earth requires an unusual combination of financial, technological and environmental expertise. Finding people with the right skills is difficult, but aligning individuals with different backgrounds and ways of thinking can be harder still.

Rob describes the CEO as the company’s “chief alignment officer”, responsible for connecting the long-term mission with immediate concerns such as revenue, cash flow and burn rate.

He also feels responsible for ensuring the whole team develops its ability to use AI. Rob references Hidden Figures, in which Dorothy Vaughan teaches herself FORTRAN before training her colleagues to work with a newly introduced IBM computer.

The aim is to avoid creating a small group of highly capable AI users while everyone else is left behind.

Rebalance Earth has not previously recruited specifically for AI capability, but Rob expects this to change. As the technology becomes embedded in everyday work, candidates who have not engaged with it may find themselves at a disadvantage, particularly when applying for senior roles.

Key Takeaways

• Multidisciplinary teams require strong alignment around shared goals.

• Mindset and adaptability are becoming increasingly valuable qualities.

• AI capability should be developed across the whole organisation.

• The ability to work effectively with AI is likely to influence future hiring decisions.

Looking Ahead

Rebalance Earth’s immediate focus is raising and deploying institutional capital through its nature-based infrastructure fund.

The wider ambition is to create a scalable and repeatable public-private partnership model for landscape restoration. If the approach succeeds, natural capital could eventually become as familiar to institutional investors as property, infrastructure or renewable energy.

The next stage will be about proving the model through delivery: restoring landscapes, reducing measurable risks and demonstrating that these projects can produce financial, environmental and social returns.

Final Thought

Natural systems underpin the infrastructure, businesses and communities in which investors already hold capital. Their value often becomes visible only when degradation results in flooding, drought, pollution or disruption.

Rob’s experience shows that nature restoration does not have to be viewed solely as a cost or charitable act. When it reduces quantifiable risks and produces reliable revenue, nature can become productive infrastructure in its own right.