Earth Security is a think tank that connects global finance with nature’s capital and creates opportunities to invest in climate solutions. Its CEO, Alejandro Litovsky, is originally from Argentina and currently based between London and Copenhagen, where we caught up with him. He founded the company in 2011. A publisher of thought-leadership reports, Earth Security regularly works with investors, foundations, companies and governments. Litovsky says that you’ll never see mangroves in the same way once you find out about their ability to generate carbon credits or how they can provide cost-effective coastal protection.

So, is making people see nature as an asset to invest in an easy sell? “It’s hugely sexy and everyone is interested,” he claims. “Now the question is, ‘What does that mean in practice?’” Earth Security has plans there too: the creation of an investment platform to scale opportunities. Monocle caught up with Litovsky to find out more.

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What made you want to set up Earth Security?
I have always been an environmentalist at heart. In 2009 the global science community published a very influential report called Planetary Boundaries. A collective of top Earth-system scientists collaborated on a study to measure what could be the key limits and thresholds for things such as climate change, fresh water and biodiversity to keep the planet operating within stable conditions. It asked whether we had crossed certain security thresholds and the visuals were very stark. Of nine categories, three were already in the red.

My sense back then was to say, “There has to be a way to translate this Earth-level analysis into a practical, almost country-by-country understanding of tipping points and resource bottlenecks.” There was a need to connect the understanding of companies in their headquarters with the reality of what to expect and show them how to create more sustainable investments that wouldn’t just be about ethical developments but would yield long-term resilience and business viability. If you’re operating a manufacturing plant that depends on water and that particular region is experiencing droughts and will have no water in 30 years, that’s something that should be on your radar. Earth Security started as a think tank producing analysis that would show different sectors how to value natural ecosystems and nature to help the services that they’re providing today.

Is it about rebranding how people see the concept of investing in nature?
The basic idea is that nature is already providing us with some fundamental services that we take for granted. Think about pollination: at least half of the world’s crops wouldn’t exist if it weren’t for bees. And what about the recycling of fresh water and where rain comes from? It involves the functioning of a complex ecosystem that one could really think about as a type of infrastructure. We need to be investing in these natural assets to maintain our long-term viability.

In the past decade we have demonstrated very practically with numbers the value that nature has for a range of industry verticals. Coffee is one. By 2050, half of the land that is being used to cultivate high-value Arabica coffee won’t be suitable for growing the crop. Just imagine the bottlenecks and the price volatility. It has been proven that cultivating coffee under the canopy of the forest has a range of different resilience benefits.

The key question is, how do you transition global industrial-scale value chains of coffee production into more nature-based production systems that are fundamental for the supply security of that crop?

You have talked about companies seeking to guarantee their future supply chains but is it a good investment for individuals to look to nature?
A lot of our first decade was about translating the knowledge that exists in science. In many ways, we are credited with really setting global agendas for things such as mangroves [and their protection], and putting them at the heart of global industry. What we are doing now is starting to think about how to start to work with investors, whether these are individuals, family offices, institutional investors or fund managers. How do you start to connect that capital and that interest in getting some exposure to natural capital? Where should people invest? How do you move their capital? That is what we are working on right now, which is really the next phase for Earth Security.

So you’re bridging a gap in many ways?
We find and aggregate a pipeline so that if you have a person who says, “Look, I would like to invest, where are the opportunities?” we are then able to provide a portfolio of opportunities that are nature-positive but that also offer a return. They’re offering a positive effect on the planet’s ecosystems and, by extension, local communities but they also have a return profile.

Do you have to play the long game for a return on investment?
There isn’t a one-size-fits-all solution. We’re not talking about nature as having one risk-and-return profile. We would like to work towards a scenario in which we can create diverse portfolios but also standalone investments, which are an interesting addition to other portfolios that already exist and are exposed to more traditional asset classes. We shouldn’t pigeonhole nature as either philanthropic or “patient” (meaning low- return) capital. I’ll give you an example. When you transition a farm to regenerative practices, first you will need a lot of upfront investment to plant trees and train people, and sometimes you will have a dip in productivity over the next three to five years as the ecosystem is, in effect, rebooting. And after that, what will happen is a massive upshot in productivity, perhaps 300 per cent more than what you had originally. The question is, who puts up the money for that initial lost income to farmers? And that’s where, for some of these opportunities, blended finance is really important – the use of philanthropic or public money when it’s used to de-risk or support a project.

So what do you think are the most interesting investments?
Regenerative forms of agriculture that are growing high-value crops are the place to be. It’s just a question of understanding what kind of companies to look for and what stage of the value chain you want to be at.