Dr. Rich Stockdale: Pioneering the Future of Natural Capital Investment

At the forefront of the sustainable finance movement, Dr. Rich Stockdale, founder of Oxygen Conservation, delivered a compelling closing keynote at Sustainable Finance Live 2024. His insights into the future of investment in natural capital resonated deeply with attendees, highlighting both the challenges and opportunities that lie ahead in this critical sector.

A Vision for Change

Dr. Stockdale’s journey into the world of natural capital began with a simple yet profound desire: to improve the environment. “I wanted to change the environment for the better. I wanted to take weirs out of rivers. I wanted to plant trees and reintroduce species and build new nature reserves,” he explained. This passion led him to establish Oxygen Conservation in 2021, a company dedicated to investing in land for ecological restoration and generating revenue through carbon credits.

By the end of 2024, Stockdale anticipates that Oxygen Conservation will manage an impressive 45,000 acres of land, with a valuation of £150 million. His rapid success has surprised many in the environmental sector, including colleagues at the Wildlife Trust, who were skeptical about the pace of change in this traditionally slow-moving field.

The Investment Landscape: A Cricket Analogy

During his keynote, Stockdale drew an intriguing analogy between the environmental sector and cricket. He likened the slow, methodical nature of traditional environmental efforts to Test cricket, which is often seen as laborious and conservative. In contrast, he emphasized that modern investors are looking for the fast-paced excitement of T20 cricket, where speed, urgency, and high internal rates of return (IRRs) dominate.

“Nature doesn’t care about IRR, and that’s the problem,” he stated. This disconnect between the investment community’s expectations and the realities of environmental restoration presents a significant challenge. Stockdale argued that the environmental sector lacks a common language that can bridge this gap, making it difficult to attract the necessary investment.

The Current State of the Environmental Sector

Stockdale’s candid assessment of the environmental sector painted a picture of a field that, while well-intentioned, struggles with professionalism and performance culture. He described it as “warm and lovely and kind and generous,” but lamented that the standards are low, making it difficult for the sector to be seen as investable. “People don’t work hard; they don’t understand what performance culture is,” he noted, calling for a shift in mindset to make the sector more appealing to investors.

Navigating Criticism and Controversy

As with any innovative approach, Stockdale acknowledged the criticism that comes with the territory. He pointed out that some view the monetization of natural capital as inherently inappropriate. “Some people believe that profiting from nature is wrong, and you’re not going to change their mind,” he said. However, he argued that this mindset contributes to the very issues we face today, including climate change.

Stockdale believes that a significant part of the solution lies in establishing a price on carbon and pollution, which could incentivize more sustainable practices and investments. He sees this as a critical step toward aligning the interests of investors with the goals of environmental restoration.

The Opportunity Ahead

Looking to the future, Stockdale expressed optimism about the potential for natural capital investment in the UK. He identified approximately £20 million worth of high-quality, premium natural capital acquisition opportunities, suggesting that the market is ripe for growth.

“The urgency cannot be overstated,” he concluded. “We need to go, and we need to go fast. People want to make a difference, and we are making strides every day to improve the landscape for investment in natural capital.”

However, he also acknowledged a troubling paradox: as climate conditions worsen, the demand for natural capital solutions may increase. “The worse the climate gets, the better that is for this business,” he admitted, highlighting the complex emotions that come with working in this field.

Conclusion

Dr. Rich Stockdale’s keynote at Sustainable Finance Live 2024 served as a clarion call for the investment community to engage more deeply with natural capital. His vision for a more dynamic, responsive approach to environmental restoration challenges traditional notions of investment and underscores the urgent need for innovative solutions. As the landscape of sustainable finance continues to evolve, the insights shared by Stockdale will undoubtedly play a pivotal role in shaping the future of natural capital investment.