In our previous piece on the foundations of biodiversity investing , we explored the durability of the biodiversity transition as a structural growth driver, and the depth and diversity of the investable universe. In this follow-up piece, we examine specific investment examples, showcasing companies across our four investment themes .
These leaders not only highlight the breadth of differentiated opportunities but also exemplify our disciplined stock selection process, which aims to deliver value for investors while contributing to a more sustainable future.
Defining high-quality opportunities
We seek companies with a durable competitive advantage that provides pricing power, margin strength and resilience, underpinned by a healthy balance sheet. This enables disciplined capital allocation towards profitable growth opportunities or the return of free cashflow to shareholders. In a rapidly evolving space such as natural capital, a high-quality management team with a credible strategy is essential to convert these strengths into a return on invested capital consistently in excess of the weighted average cost of capital.
Our repeatable process combines screens and fundamental analysis to build a watchlist, then applies valuation discipline and portfolio construction considerations to maintain a concentrated portfolio of opportunities we regard as the most attractive. The investable universe is richly populated with quality companies that serve diverse end markets and span four investment themes: Sustainable materials, Terrestrial ecosystems, Aquatic ecosystems, Circularity & waste management.
Sustainable materials - innovations and substitutes for necessary materials whose extraction or production is damaging to biodiversity.
Demand for lithium is growing due to its use in batteries for EVs and energy storage. Around a third of global lithium supply is extracted from subterranean brines found in and around the Atacama Desert of Argentina, Bolivia and Chile,[1] using an extremely water-intensive process in a highly water stressed environment. Although such arid regions are typically less species rich than other biomes, they often support vulnerable or threatened species that occupy these highly specialised ecological niches.
In contrast, Vulcan Energy Resources [2] produces zero-carbon lithium through geothermal brine extraction in the industrialised upper Rhine valley, an area with comparatively little biodiversity sensitivity. By avoiding evaporation ponds and traditional hard rock mining, it minimises land disturbance and water use. Having utilised the heat as zero-carbon energy for local district heating systems, it returns the brine to groundwater without pollution.
Sustainable lithium production supports premium pricing and blue-chip offtakes
Its superior environmental footprint and location close to end markets gives it a competitive advantage as automaker battery manufacturers seek sustainable, traceable supply chains [3]. Vulcan’s customer base values the environmental credentials of its lithium, which attracts a premium to its lithium prices and enables Vulcan to secure longer term offtake agreements with blue chip customers [4]. In our view, this has derisked the project by providing visibility of future cashflows.
Finally, its strong environmental credentials have given the business access to preferential equity and debt funding [5]; and its ability to extract heat from its geothermal brines both enables zero-carbon lithium and eliminates the energy cost from its business model, moving its lithium down to the bottom of the cost curve.
Terrestrial ecosystem solutions limit dependency and degradation to land-based biodiversity.
SunOpta4 is a leading manufacturer of plant-based milks (oat, soy, almond, coconut, rice) serving major brands, private labels and foodservice providers, primarily in North America. The company contributes to environmental protection by offering alternatives to dairy milk, which have significantly lower greenhouse gas emissions, water usage and land requirements – key sustainability benefits that increasingly drive purchasing decisions, particularly among younger demographics, supporting growth for plant-based foods.
A mid‑teens forward P/E implies attractive upside, in our view.
SunOpta’s state-of-the-art supply chain and unique manufacturing network provide strong competitive advantages in our view, driving above-market growth and gradual profitability improvement, resulting in raising returns on capital [6]. As it scales, SunOpta has the option to deleverage and augment shareholder returns through share buybacks. Trading at a mid-teens forward earnings multiple [27, we believe this represents an attractive opportunity for capital appreciation.
Aquatic Ecosystems solutions protect and preserve water and water-based ecosystems.
SABESP4 provides clean water, sanitation and wastewater treatment to more than 28 million people in Brazil [8]. It operates within a regulatory framework which incentivises investment to conserve water, treat wastewater and protect watersheds, reflecting the importance of this infrastructure to its stakeholders.
Supportive regulation and effective capital deployment provide visibility on regulated returns.
By improving wastewater management and reducing pollution in rivers and reservoirs, SABESP plays a key role in protecting aquatic ecosystems and urban biodiversity. Its ability to deploy capital effectively to appropriate solutions in a clear and supportive regulatory environment [9] means the company enjoys good visibility over regulated financial returns whilst its investment creates a meaningful improvement in the quality of local ecosystems as well as the lives of those it serves.
Circularity encompasses the sustainable reduction, reuse, recycling and safe end-of-life management of all material.
Elis4 is a European leader in circular textile and hygiene solutions. It provides rental, cleaning and maintenance services for flat linen, workwear and hygiene products, mainly serving the healthcare, hospitality and catering industries. By promoting reuse over disposal, Elis helps to reduce textile waste, water use and energy consumption, thus lowering resource extraction and landfill pressure, aligning its customers with the transition in a cost-effective manner.
Operating on a global scale, Elis benefits from geographic diversification, which underpins stable cash flows and economies of scale [10], and supports our expectations for consistent, long-term returns. In our view, the company is well positioned to benefit from a combination of structural organic growth and bolt-on acquisitions that will continue to increase its market density. We believe that Elis is poised to grow at mid-single-digit rates for the foreseeable future while generating attractive incremental returns on invested capital.
Global scale and geographic diversification underpin stable cash flows and economies of scale.
From opportunity to impact
We are encouraged both by the pace of innovation and the deployment of capital to scale solutions such as these. The propensity of corporates and consumers to adopt effective and affordable solutions as they become available continues to advance the natural capital transition.
We see many instances where differentiated solutions with pricing power are well managed and appropriately funded. Investing in the best of these creates potential to generate positive returns from the multi-decade growth opportunity the natural capital transition represents while supporting a sustainable future, a robust economy, and a more resilient society.
[1] The US Geological Survey (USGS), 2024
[2] All securities in this article have been selected to highlight the strategy’s investment methodology and are not representative of the strategy’s performance. The investment strategy holds a broad range of securities. Portfolio holdings are subject to change at any time without notice. This information should not be construed as a recommendation to purchase or sell any security.
[3] Vulcan Energy, October 2025
[4] Goldminingreview.com, October 2025, Vulcan Energy, February 2022
[5] Thinkgeoenergy.com, July 2025, Vulcan Energy, March 2025; Vulcan Energy, November 2024
[7] Bloomberg, October 2025
Key Information
No investment strategy or risk management technique can guarantee returns or eliminate risks in any market environment. Past performance is not a guide to the future. The prices of investments and income from them may fall as well as rise and investors may not get back the full amount invested. Forecasts and estimates are based upon subjective assumptions about circumstances and events that may not yet have taken place and may never do so. The statements and opinions expressed in this article are those of the author as of the date of publication, and do not necessarily represent the view of Redwheel. This article does not constitute investment advice and the information shown is for illustrative purposes only.
