Growing green: cultivating a sustainable future through an ecosystem service valuation – Franklin Templeton

The Franklin Templeton Fixed Income team believes that sustainable investing will be a dominant investment trend in the coming years, with structural tailwinds that could help improve financial returns.

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What are ecosystem services? In short, they are the benefits we all derive from the environment.

The list is long—not only the joys of recreation and tourism, but also more fundamental benefits such as the supply of food and clean water, flood and wildlife regulation, and pollution and pest control. These come at a cost, however. Thankfully, an increasingly diverse green bond market is helping to finance the protection of our Earth’s natural capital—those elements we as a society value, such as our forests and rivers—and to encourage biodiversity. Best of all, the development of the sustainable finance market makes it easier for asset owners to potentially earn a compelling investment return and also make a positive impact on the environment.

Nonetheless, climate change and a rapidly growing population are putting increasing pressure on ecosystem services. As this pressure builds, so does our need to act.

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