Catalysing finance and policy for a resilient, nature-positive and prosperous future
Earth Capital Nexus (LSE EarthCap) is a global research initiative hosted by the Grantham Research Institute on Climate Change and the Environment and the LSE Global School of Sustainability, and led by Professor Nicola Ranger.
LSE EarthCap brings together world-leading research, technical expertise and convening power to address a critical blind spot in today’s global economy: the invisibility of natural capital and physical climate risks in financial and economic decision-making. We work across local, national and global scales to radically scale up high-quality and accessible finance for sustainable development, including in emerging markets and developing economies (EMDEs), and to secure a resilient, nature-positive and prosperous future for all.
LSE EarthCap was launched in October 2025. On this page we explain the context and need for the initiative, our approach and the kinds of projects we are leading.
Credit: Elen11/istock
Why it matters
Growth, stability and development depend on natural systems: fertile land, water, forests, biodiversity and a stable climate. Yet these foundations of prosperity are being eroded at unprecedented rates. The consequences are profound. Despite decades of commitments, financial flows for climate, nature and Sustainable Development Goals (SDGs) are still vastly inadequate when compared with the scale of the need, particularly in EMDEs.
Despite these realities, most fiscal frameworks, financial models and debt analyses remain blind to natural capital and social resilience. The result is trillions of dollars flowing each year into environmentally damaging activities, while nature-positive investments remain under-financed. This is an ‘own goal’ for the global economy. To shift this trajectory, we need system-wide interventions.
To scale up high-quality and accessible finance and secure a resilient, nature-positive and prosperous future for all, a multi-scale approach is required. The core toolkit of data and models needs to be updated to incorporate new technologies, such as Earth observation and AI. Academia, governments, finance, corporates and civil society must work together to remove barriers, rewire financial, fiscal and economic systems, and harness the influence government, society and business worldwide.
Our approach
EarthCap operates at local, national and global levels, with a clear focus on embedding natural capital, adaptation to climate change and resilience into financial and policy decision-making. We target the critical intervention points that unlock private and public investment, responding to growing demand from businesses, financial institutions and governments for actionable evidence and tools. Our approach combines academic rigour with practical impact and working on-the-ground in EMDEs, identifying ‘win–wins’ where investment in natural capital and resilience can drive jobs, growth and value creation. Our approach includes:
Creating cutting-edge analytics, datasets and tools that make climate and nature-related risks visible and measurable. Our work ranges from macroeconomic models and stress tests to entity-level risk and opportunity tools, asset-level AI-powered analytics and satellite data.
Conducting applied economic research within EMDEs, working with local partners to test and identify the policies, incentives and partnerships that enable inclusive, resilient growth.
Through our Finance Lab, co-developing innovative solutions with banks, investors and insurers, from sustainability-linked instruments to credit risk frameworks, and natural capital investments.
Convening and building capability bringing together business, government and civil society to accelerate policy innovation and embed best practice in financial systems and governance.
Main pillars of work
Our work is organised into three main pillars:
International architecture, fiscal policy, norms, standards and diagnostics: We develop analytics that embed natural capital and resilience within fiscal frameworks, regulation and debt sustainability assessments, and that advance innovative financing modalities.
Financial institutions and corporates: We collaborate with banks, insurers, investors and corporates to integrate climate and nature-related risks into risk management, business and investment strategies and governance. Through our Finance Lab, we work in partnership to develop and test blueprints for new solutions, from building adaptation-smart and nature-aware credit ratings, to building new benchmarks and using Earth observation to design key performance indicators for sustainability-linked financial instruments.
Country labs: Applied research and engagement in-country will provide actionable, decision-useful evidence and toolkits on the nexus of natural capital, growth, stability and finance for use in policy and business decisions. In partnership with governments, investors, corporates and civil society, we will design context-specific policy approaches to increase investment in resilience and natural capital.
The initiative’s projects include:
Investing in ‘systemically important’ natural systems in EMDEs: Analysing the investment opportunity and economics of key critical ecosystems such as forests, river basins and mangroves, and their implications for growth, local livelihoods and fiscal and financial policy at both global and local scales.
Business practices, partnerships and investment in sustainable and resilient global value chains: Analysing the win–wins for commercial value creation, investment and inclusive development in EMDEs and global resilience.
Developing the first corporate benchmark on adaptation and resilience, bringing together asset-level data, geospatial analytics and corporate disclosures.
Developing adaptation-smart and nature-aware debt analyses and credit ratings at the sovereign and project level in collaboration with financial institutions, development finance institutions and sovereigns, and linking these to financial products such as sustainability-linked bonds and loans.
Developing evidence, analytics and solutions to radically scale up finance and action for resilience, nature and the SDGs through our Finance Lab.
Assessing national and entity-level nature-related financial risks in the UK, and developing nature risk and transition scenarios for financial institutions as part of the UKRI Integrating Finance and Biodiversity programme.
Undertaking cutting-edge work to advance innovative finance for nature through novel applications of Earth observation data with the European Space Agency Leveraging Earth Observation for Nature Finance programme.
Advancing integrated ecological-macro-financial models for understanding climate –nature financial risks and opportunities across Europe and applying new analytics to design innovative financing through EU Horizon Nature-3B.
Watch the launch event recording – with keynote address by Ruth Davis OBE
Earth Capital Nexus was officially launched on 7 October 2025, with the keynote address given by Ruth Davis OBE, UK Special Representative for Nature. Professor Lord Nicholas Stern opened the event and expert speakers represented banks, investors and the UK government. A recording will be available here after that date.
