A surge in nature tech investing

The market for nature-related technologies that help companies understand, mitigate and adapt to the twin climate and biodiversity crises is poised to reach US$2 billion in 2022.

Will Evison, Eleanor Gill, Tarik Moussa and Dan O’Brien

Nature-related technology, or nature tech, is one corner of the overall market for climate tech where investment has been trending upward over the past year. With more than half of the world’s GDP dependent on nature, capital has been surging into technologies that enable nature-based solutions to the climate crisis. Our analysis of nature tech start-ups estimates that investment in the sector has grown to around US$2 billion in 2022, an average rate of growth of 52% per year since 2018.

Natural climate solutions alone have the potential to mitigate greenhouse gas (GHG) emissions by more than a third of the amount required by 2030 to keep global warming below 2°C. These solutions include technologies that help protect, manage and restore natural and agricultural landscapes in ways that avoid emissions or that increase carbon sequestration. As of September 2022, investment volume for the year was on track to rival the high set in 2021. Led by a growing number of larger deals, it seems investors are increasingly sanguine about the opportunity.

Nature tech can also have more immediate applications to help companies manage agricultural lands. To glimpse the nuanced connections between climate change, biodiversity, technology and a company’s bottom line, consider the humble honeybee—and a certain South American coffee plantation. Like other pollinators, bees are susceptible to changing environmental conditions. Those conditions could include anything from a slight shift in crop flowering patterns—already a risk due to climate change—to increasing levels of pollution, which can further disrupt the delicate balance between pollinators and crops. So when plantation managers noticed a sudden drop in crop yield, they deployed new measurement, reporting and verification (MRV) technologies to figure out why, using advanced sensors and AI to collect and analyse hive data.

They discovered that an increase in exhaust from local traffic was interfering with pollination, and they were able to improve productivity by moving hives to the other end of the fields, away from roadways. Had the data indicated different problems, managers could have used other types of apiary nature tech, such as robot queens to direct drone activity or solar hive warmers to control predator and mite infestations. The value for businesses, such as those in the global US$430 billion coffee industry, may help explain a sharp increase in investment in MRV technologies.

The rise of nature-related technology is leading to a greater understanding of companies’ impacts and dependencies on nature. It is also providing companies with the tools to identify, manage and disclose nature-related risks and opportunities with greater precision and credibility. The expanding flow of capital into nature tech start-ups suggests that investors recognise these trends — and see the value they could create for business and the beneficial effect they could have on the climate.

The authors thank Jeremy Block, Millie Foakes, Laura Russell and Ana Yovtcheva for their contributions to this article.

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Will Evison

Will Evison

Global Sustainability, Climate and Nature Strategy, Director, PwC United Kingdom

Tel: +44 (0)7718 864854

Tarik Moussa

Tarik Moussa

Senior Manager, Sustainability and Climate Change, PwC United Kingdom

Tel: +44 (0)7753 461500

Daniel O’Brien

Daniel O’Brien

Sustainability and Climate Change Partner, PwC Canada

Tel: +1 604 484 3478