Why big investors are talking about fungi and forests

Investing.com -- Nature restoration is emerging as a major investment theme, with Bank of America calling it one of the most overlooked opportunities in global markets.

The firm says annual capital into nature-based solutions needs to triple to $542 billion by 2030 to meet climate and biodiversity goals.

More than 80% of ecosystems are degraded, and biodiversity is falling faster than at any time in history.

Every $1 put into nature restoration could return up to $30 in economic value, according to analysts at BofA.

Tech and data are turning ecosystems into measurable assets. Tools like LiDAR, satellite imaging and DNA tracking are helping investors identify natural assets in real time such as soil moisture, carbon storage or pollination activity, making them more investable.

Wakehurst, a research site in Sussex, is being used as a live lab where scientists track ecosystem functions and develop seed banks that could help scale nature restoration efforts.

Fungi may become a multibillion-dollar pillar of the bioeconomy. BofA notes that most fungal species remain undiscovered, but those studied are already being used in materials, food, medicine and sustainable agriculture. The global mycelium market could exceed $7 billion by 2035.

Regulators across Europe and the UK are moving to standardize nature credit markets and require companies to account for biodiversity.

Private financing for nature has already jumped 11-fold in four years, and could reach $1.5 trillion by 2030 if current momentum holds.