The biodiversity blind spot: Why your endowment is your most powerful response to the nature crisis

Nature is losing. Despite three decades of conservation efforts, biodiversity is declining at rates that outpace even the most pessimistic projections. Meanwhile, the financial system continues to bankroll biodiversity loss. According to UNEP (2026), approximately $7 trillion is invested each year in activities that actively degrade ecosystems: for every dollar flowing into nature restoration, thirty flow into the infrastructure-heavy and resource-extractive sectors working against it.

Most foundations operating in the nature and biodiversity space are funding both sides of that equation – albeit unintentionally. At the heart of this paradox lie their endowments: the pools of assets invested in capital markets, whose returns fund their operations and grantmaking programmes. At present, these endowments are quietly contributing towards nature-negative financial flows, yet they represent foundations’ greatest opportunity to reverse them.

Leveraging the opportunity in the endowment

Studying 44 foundations funding nature in the UK, which collectively manage over £12 billion in assets, I found that median grant expenditure – the proportion of capital deployed toward charitable purpose – was just 5%. The remaining 95% is typically invested in conventional capital markets, its ecological footprint largely unexamined.

This is not simply complacency. Foundations face real constraints – founding articles, fiduciary duties, internal capacity and a financial system that has never accounted for the natural world. Moreover, shifting endowment capital is complex, with real trade-offs to navigate. But for those which are genuinely seeking to avert ecological collapse, the endowment is undeniably the greatest untapped opportunity for impact.

Unlike pension funds bound by strict fiduciary mandates, or corporations answerable to quarterly earnings, foundations that fund nature hold patient, risk-tolerant capital with an explicit ecological mandate. They can absorb lower-than-market returns, take positions mainstream investors cannot, and move first – demonstrating viability and creating conditions for much larger capital flows to follow. Sitting at the intersection of financial markets, civil society and policy networks, foundations also possess what researchers call “hyperagency”(Schervish, 2003) — the resources and influence not only to pursue desired outcomes, but to shape the system itself, including the norms, institutions and conditions that determine where far larger pools of global capital will follow. This means that a foundation’s systemic impact on nature is determined not only by its grants, but by where all of its capital flows – and what those flows signal to the wider market.

Four paradigms: A diagnostic framework

My research identifies four distinct paradigms of capital deployment among nature-funding foundations in the UK. It is designed to be a practical diagnostic tool enabling foundations to assess where they currently are and the direction of travel available, as a first step to unlocking greater impact.

Business-as-usual: Investment and mission operate in entirely separate silos within this paradigm. The endowment is managed exclusively for financial return, whereas their nature-related mission is operationalised through grantmaking – at a median annual spend of 4% – leaving the ecological footprint of the remaining 96% of capital unexamined. Even modest steps toward sustainable investing – such as excluding sectors known to cause ecological harm, like fossil fuels – represent a significant opportunity for these foundations to shift the real-world impact of their capital.

Performative: Foundations in this paradigm collectively hold £8.5 billion in assets. They adopt responsible investment language and utilise ESG frameworks and UN Principles as tools for managing financial and reputational risk. But they have yet to look at their endowment through a nature lens, leaving unmanaged nature-related risks embedded in their portfolios, along with an enormous, untapped opportunity to invest in nature’s recovery. Their greatest levers lie in active ownership – engaging the companies in their portfolio on nature-related risks and opportunities – and in allocating a portion of capital to impact-first investments where financial return is not the primary objective.

Progressive: Foundations in this paradigm take a more holistic approach to deploying their capital – actively working to reconcile their financial and mission objectives by combining active ownership, positive screening and impact-first approaches, with other ESG tools. Given the relatively small size of their collective financial assets (~£3 billion), they rely heavily on their social and cultural capital to influence outcomes, in some cases, even shaping sector-wide norms. The opportunity for this paradigm lies in accelerating the pace of transition, to bring the full weight of their assets into mission alignment at a speed commensurate with the biodiversity crisis.

Prefigurative: In this paradigm, every investment decision is made in service of nature, demonstrating that full mission alignment is entirely achievable. Prefigurative foundations bring much more than financial capital to the table, leveraging their knowledge, relationships and credibility to influence biodiversity outcomes. Their greatest opportunity lies turning their capital deployment experience into evidence – and using it to accelerate change across the sector.

Closing the gap: The mission alignment opportunity

Over £9 billion of the capital studied still sits in the Business-As-Usual or Performative paradigms, while less than 0.1% is held by Prefigurative foundations, whose capital is most tightly aligned with nature. This represents an enormous opportunity for systemic change.

To be clear, the opportunity here is not about increasing grantmaking but about bringing investment logic into alignment with charitable purpose. A foundation’s systemic impact is determined not simply by its mission statement, but by where its capital flows and what those flows finance.

The Progressive and Prefigurative foundations in my study show that making this shift is entirely feasible. Legal precedent now confirms that trustees can accept lower financial returns for their investments, where doing so directly advances charitable purpose. And a growing range of impact-first investment vehicles exists to receive capital seeking ecological, rather than purely financial, returns. The barriers are real but not insurmountable – and the foundations already navigating them are leaning into their full power as hyperagents, demonstrating what is possible and pulling the wider sector in their wake.

Taking the next step

The four paradigms offer a practical diagnostic for any foundation ready to examine its capital deployment honestly. In my experience, most foundations find the first steps easier than they expect, and that the opportunities ahead are more exciting than they imagined. If you would like to assess where your foundation sits and explore what a credible path toward greater mission alignment could look like, I would welcome the conversation.