· 6 min read
The top 1% of households globally steward more than 45% of the world’s capital. A significant portion of this capital is stewarded by private family offices, which are becoming increasingly influential in the investment landscape. What sets family offices apart is their long-term, multi-generational perspective rooted in family. Unlike institutions focused on quarterly returns or a single generation’s retirement horizon, these investors think in seven generations, a hundred years, or other time measures beyond any other investment horizon.
This patient capital is especially relevant for nature investing, where returns - whether financial, ecological, social, or reputational - compound over time. Natural capital investments like regenerative agriculture, sustainable forestry, conservation and restoration activities, and tech solutions for nature, offer resilience, inflation protection, and long-term value creation.
Nature’s value is not only ecological or financial, but cultural, sensory, and relational, from air, water, and food systems to the arts, identities, and biocultural resilience it sustains. Ignoring these interwoven systems undermines the very substrate upon which all economic value depends, as we see when planetary boundaries are crossed.
Most family offices are also driven by a deep sense of stewardship and legacy. The whole motivation of the family office is to ensure a better future for the generations that follow them. We believe this moment calls for a different kind of capital choreography, and family offices are uniquely placed to lead it. Many hold both philanthropic and investment capital, yet often keep them in separate rooms. What if, instead, they moved together?
Philanthropy can underwrite early-stage risk, funding capacity, community governance, and policy alignment. Investment capital can then step in to fund outcome payments, performance-linked models, or scale what proves viable. But it’s not about grants on one side and returns on the other. It’s about capital playing different roles across time and risk, in service of one goal: enabling nature to thrive on its own terms.
It’s high time that more family offices invest more of their portfolio in nature - with more diverse case studies than ever before, and as a way to circumnavigate the current market chaos.
What’s holding back their potential
Despite their potential, most family offices are not aware of or have not undertaken any nature investing. Key barriers include:
• Awareness: Associate sustainability screening just with oil & gas divestment.
• Track record: While the market for nature-based investments is growing, some family offices feel there are not enough proven, scalable solutions or investment vehicles tailored to their needs. Family offices may not have even heard of cases with real returns and consider nature a theme for philanthropy only. Cases such as Builders Vision and Naia Trust should be promoted more widely to build awareness.
• Perceived trade-offs: There is still a lingering perception that impact or nature investments may require sacrificing financial returns, although evidence increasingly shows that sustainable portfolios can perform comparably to traditional ones, especially over a longer horizon. Using evidence from new risk assessment models, we see much higher expected returns compared to legacy industries.
• Internal alignment: Shifting from traditional wealth management to impact investing often requires consensus among family members, which can be a slow and complex process. In multi-generational settings with diverse perspectives, hearing endorsements from those who are demographically similar can help.
• Culture gap: Framing nature as an ESG issue misses the point that nature investing is a win-win for family offices, not only a risk and disclosure issue to be managed, or a philanthropic pursuit.
Practical Efforts Needed to Unlock Family Office Potential
To catalyse family office leadership in nature investing, several practical steps are recommended:
Start with what you love - connection to each other and nature
• Before the structures, strategies, and screens, begin with something deeper: what you already care about. The places your family returns to. The landscapes or seascapes that shaped you. The values that have quietly endured across generations. It’s the compass.
Build internal consensus - there is limited chance for women or NextGen investors alone to deviate radically from the entire family
• Facilitate open discussions among family members to align on values and long-term goals, using real-world examples and peer inspiration to make the case for nature investing.
• Invest in education and capacity-building to deepen understanding of impact investing, nature-based solutions, and measurement frameworks.
Develop a values-based investment thesis
• Anchor your investment approach in a clear theory of change, one that recognises the family’s role in shaping not just financial outcomes, but systemic ones.
• Use this to build a shared impact strategy that reflects your long-term vision and values, ensuring all stakeholders understand the drivers of change, the levers you can influence, and the outcomes you’re working toward together.
• Translate this into a practical investment policy statement that guides day-to-day decisions and portfolio management.
Start with the obvious: eliminate harmful exposures
• The lowest-hanging fruit is often the most overlooked. Begin by identifying how nature flows through your portfolio, and where capital is inadvertently funding nature loss.
• The agreement on exclusions / phase out and investing into transition and solutions might be the most powerful element that the family can agree on - and that’s a huge, commendable step forward.
Build alliances and co-invest with others
• Investing alongside aligned families and partners not only creates leverage and risk diversification, it also builds coalitions capable of influencing broader market signals. It allows you to draw on the experience, due diligence, and trusted relationships of those already active in the space.
• Collaborative capital can have outsized impact, and co-investment is often the fastest way to translate values into tangible outcomes.
• It also offers a way to move capital strategically while learning from others and maintaining discretion.
Develop with a carve out or pilot / proof of concept
• Begin by allocating a portion of the portfolio to nature or impact investments as a “carve-out,” allowing the family office to build experience, measure results, and refine its approach before scaling up.
• This can tie into the philanthropic interests of the family, building closely from a comfort zone.
Emphasise legacy
• Anchor the case for nature investing in the family’s legacy - framing it as an evolution of stewardship that aligns with the family’s history, values and aspirations for its future generations.
Conclusion
Family offices possess the capital, flexibility, and long-term vision needed to be transformative leaders in nature investing. By overcoming internal and knowledge barriers, adopting structured impact strategies, joining into investing clubs for proofs of concept, and leveraging their unique strengths, they can unlock both market and societal value … leaving a better world for their own children and generations to come.
This article is also published on LinkedIn. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.
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