This white paper explores how high-quality, asset-level nature data can be applied to identify alpha within investment portfolios. This showcases how NatureAlpha’s data can be used to screen portfolios and reduce nature risk — revealing a compelling correlation between nature-risk data and performance on longer time scales, relative to standard benchmarks. The presented case study outlines screened and optimised portfolio approaches for reducing nature-related risk and how this can affect risk and returns.

• Nature is financially material: Nature-related risks and dependencies affect financial risks and returns, making it a variable which investors cannot afford to ignore.
• Demonstrating materiality with data: By leveraging historical financial and nature-related data, we can demonstrate the financial materiality of nature-related risks and dependencies.
• New opportunities for portfolio management: This data-driven approach enables investors to filter and optimise portfolios based on nature-related risks.