The conversation was hosted by Gemma Corrigan, Senior Advisor to Parley Future Materials, and it did not produce an optimism report. It produced a structural diagnosis. And it produced a counter-thesis to the way most European circular materials companies, and the policymakers supporting them, are framing the scaling problem.

The sector is treating a capital infrastructure problem as if it were a venture problem. It is not. The distinction matters because the solution to a venture problem is more risk-tolerant early-stage capital. The solution to an infrastructure problem is aggregate demand commitments, corporate equity positions, and instruments that do not yet exist in the European toolkit at the required scale.

This essay starts from that conversation, then builds outward. The diagnosis and the core argument are what the room produced. The supporting detail, the named companies, the figures, the policy context, comes from research conducted afterward to test and extend what was said. Where a claim is attributed to “a participant” or “the room,” it reflects something said in the conversation. Everything else is verified independently.

It argues four things.

1). The time for pure sustainability business cases is over. The companies that will scale are those for whom the sustainability proposition and the economic proposition are the same thing.

2). The offtake agreement unlocks everything, but the sequence required to obtain one is structurally impossible for most companies without an instrument that does not currently exist.

3). Feedstock cost is not fixed. It is dynamic, and the moment your competitive advantage becomes visible, it starts to erode.

4). Europe is producing the technology and, in some cases, exporting the scaling opportunity.

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The wrong unit of analysis

The conventional framing of the circular materials scaling problem is a venture capital framing. There are excellent companies at the pilot stage. They need growth capital to move from pilot to industrial production. The market is large. The regulatory tailwinds are strong. The investors who move early will capture disproportionate returns.

This framing produces a particular kind of investor activity. It produces seed rounds and Series A rounds and a growing number of European circular materia

ls companies with proven technology at small scale. What it does not produce is the upstream infrastructure that industrial customers need to commit to buying at volume.

The conversation in May named the problem plainly. The circular transition at scale is not a technology problem and it is not primarily a venture capital problem. It is an infrastructure problem. The factories, the processing facilities, the feedstock collection and sorting networks, the logistics chains: all of the physical infrastructure required to deliver recycled or bio-based materials at the volumes that large industrial buyers need does not yet exist. And the instruments required to fund that infrastructure are either absent or inadequately capitalised in the European context.

Treating it as a venture problem produces a consistent failure mode. Companies raise enough capital to prove the technology at pilot scale. They approach large industrial customers. The customer is interested. The customer wants volumes that require a production facility ten to one hundred times larger than the current operation. The customer will not commit to a purchase contract without seeing the facility. The venture investor will not fund the facility without seeing the purchase contract. The company is stuck. The technology works. The loop is broken somewhere else.

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What it takes to make one tyre

To understand the scale of the upstream infrastructure problem, it helps to trace one product.

A modern tyre is not just a lump of rubber. It is an engineered composite of around two hundred materials: natural rubber tapped from trees in South East Asia, synthetic rubber derived from petroleum, carbon black produced by burning heavy oil fractions, steel wire, textile cord, silica, sulphur, and a long list of chemical accelerators and stabilisers. Almost every one of those inputs is today either fossil-derived or virgin-mined. To make a tyre circular, each of those streams has to be replaced with a recycled or renewable equivalent that performs identically, at a price the market will bear, at the volume of the hundreds of millions of tyres produced every year. That is not one substitution. It is two hundred substitutions, each with its own supply chain that largely does not yet exist.

Now follow one tyre off one car. Europe generates around 3.5 million tonnes of end-of-life tyres a year, and on paper the story is a triumph: roughly 95% are collected and treated, one of the highest recovery rates of any product in the economy. But watch where the tyre actually goes. Around 40% of that mass is burned, most of it as fuel in cement kilns, more than a million tonnes incinerated every year. Another 55% or so goes to material recovery, and roughly three-quarters of that is ground into granulate and scattered into artificial football pitches, playground surfaces, and road fill. Only a fraction of one percent passes through pyrolysis on a path that could ever return it to a tyre. The circle does not close. A tyre becomes heat, or it becomes a football pitch. It almost never becomes a tyre again. The recovery infrastructure Europe spent decades building was built to get rid of tyres, not to remake them, and that is the difference between a recycling rate and a circular economy.

Michelin, the world’s second-largest tyre manufacturer, has committed publicly to 40% renewable or recycled materials across all tyre production by 2030, and 100% by 2050. In 2024 it was at approximately 31%, up from 28% in 2021. At the current rate of roughly one percentage point per year, Michelin reaches the mid-thirties by 2030, well short of its own target. The gap between trajectory and commitment requires not incremental improvement but structural change in the upstream supply chain.

Each of the inputs that currently comes from fossil or virgin sources needs a substitute. Synthetic rubber, derived from butadiene processed from petroleum. Carbon black, produced by the incomplete combustion of heavy petroleum products. Textile reinforcement, typically virgin polyester or nylon. Each substitution requires a supply chain that does not yet exist at the required scale.

Michelin is not waiting for the market. It has committed more than $20 million jointly to Pyrowave, a Canadian company producing recycled styrene monomer from post-consumer polystyrene via microwave chemical recycling, with the first three-tonne batch shipped to a Michelin plant in France at 99.8% purity. Michelin Ventures holds an equity stake of around 3-4% in Carbios, the French enzymatic recycling company, which can convert post-consumer PET into polyester tyre yarn. Michelin co-founded a joint venture with Scandinavian Enviro Systems and Antin Infrastructure Partners to build what it describes as the world’s first industrial-scale tyre recycling group, targeting approximately 35,000 tonnes of end-of-life tyres per year. It is part of the BlackCycle consortium, thirteen partners working on full tyre-to-tyre recycling.

Fabien Gaboriaud, Michelin’s Senior Vice President for Solutions for Circular Materials, has been direct about what this transition costs: “The cost of fossil materials is much lower than the costs we will have to face to access new renewable and recycled materials. Incorporating these renewable or recycled materials will therefore inevitably lead to a significant increase in initial costs, an economic reality that needs to be taken into account now. Acceptance of these economic impacts by the market will thus be a major challenge.”

That is one tyre manufacturer, building its own supply chain, equity position by equity position, consortium by consortium. The conversation in May put a number on it. One participant estimated that a single large tyre manufacturer, meeting its own renewable-content targets, would need on the order of €10 billion of upstream capex. It is an estimate offered in the room, not an audited figure, and it should be treated as indicative. But the order of magnitude is the point: that is not a sum any startup can supply or any venture fund can finance. What Michelin’s own disclosures confirm is the direction: materially higher input costs, a transition the market will find challenging to accept, and a supply chain that has to be built rather than found.

This is infrastructure finance, not venture.

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The offtake-capex lock

The structural problem the room named most clearly was the sequence required to build a circular materials business at industrial scale.

To obtain a purchase contract from a large industrial buyer, you need to demonstrate that you can supply at the volume, specification, and consistency they require. To demonstrate that, you need a production facility at a scale approaching what they need. To build that facility, you need capital. To raise capital at that scale, you need a purchase contract, or at minimum a commercial commitment with enough weight to satisfy a lender’s project finance requirements.

Each step requires the previous one. The sequence is circular. The starting point does not exist.

Carbios is the clearest recent illustration, and it is worth slowing down on, because the company did everything the playbook demands and the playbook still failed it.

By late 2024, the French enzymatic recycling company had spent over a decade proving that its enzymes could break PET plastic back into its original building blocks, ready to be remade as new. It had run a demonstration plant. And it had assembled what may be the strongest offtake consortium in the industry: L’Oréal, L’Occitane, PepsiCo, Nestlé Waters, Suntory, PUMA, Salomon, On. Those are not speculative commitments. They represent real purchasing intent from some of the largest consumer goods companies in the world. The science worked. The customers were signed. Construction of the first industrial plant was under way.

In December 2024, Carbios paused that construction and announced it would cut up to 40% of its workforce. Not because the enzymes had failed. Not because a single customer had walked away. Because the capex financing was not in place. The market had said yes; the capital had said not yet. Construction restarted in 2025, but only after €42.5 million in public funding, including a €30 million grant from ADEME, the French environmental and energy agency, and in May 2025 the first direct sales contracts were signed. Offtake is necessary. It is not sufficient. The instrument that bridges the gap between signed contracts and a funded production facility remains the hardest thing to find.

Infinited Fiber Company in Finland tells a parallel story. Its Kemi flagship factory, designed for 30,000 tonnes of Infinna cotton-like textile per year, has most of its capacity pre-sold through multi-year offtakes with Inditex, PVH, Patagonia, PANGAIA, H&M, and BESTSELLER. It has a feedstock supply agreement with SOEX, one of Europe’s largest textile waste collectors. The factory is the slow part. The €400 million needed to build it has been the binding constraint.

Syre, the Swedish textile-to-textile polyester company launched in 2024 by Vargas Holding and H&M Group, found a different route. H&M signed a $600 million, seven-year offtake before the company had a plant. TPG Rise Climate, the US private equity firm, led a $100 million Series A on the back of that offtake. The sequence was: offtake first, equity second, plant third. Not because the capex-first route is unavailable, but because the offtake de-risks the capex financing enough to attract the capital.

And Renewcell, the Swedish company that pioneered cotton-to-textile recycling with its Circulose product, pre-sold capacity to multiple brands and went bankrupt in 2024 anyway, because pre-sold capacity does not equal a funded plant, and a funded plant does not equal a plant that can produce at the cost required to make the commercial model work.

The lesson the room drew is precise. Offtake is the key that unlocks capital, but capital does not automatically follow the key.

The instrument required to fund production infrastructure at the moment between signed offtake and commissioned plant is the instrument that most consistently does not exist in European circular materials.

There is a darker version of this lock, named after this essay first published by a founder negotiated exactly these kind of deals with industrial buyers before the company was acquired in 2025. Sometimes the pilot is not a step toward a deal. It is a negotiating instrument. A startup develops a credible alternative, the pilot succeeds, an investment is announced, and the incumbent supplier suddenly returns with better pricing. The buyer secures the improved terms, the incumbent keeps the business, and the startup is quietly dropped. The pilot did exactly what it was meant to do, but not for the company that ran it. Seen this way, the question is not why so many pilots fail to become deployments. It is whether some of them were ever meant to.

This sharpens the case for a demand-side coalition rather than weakening it. A buyer pre-committed to purchasing qualifying volume cannot use the pilot as a costless way to squeeze an incumbent, because walking away now carries a price. Organised demand does not just aggregate volume. It takes the pilot off the table as a free option.

When your feedstock stops being free

The third structural finding was operational rather than financial, and it applies as much to companies that have found their feedstock advantage as to those still looking.

Feedstock cost in circular materials is not a fixed assumption. It is a dynamic variable that changes the moment your competitive advantage becomes visible.

The mechanism is documented most clearly in used cooking oil, the most widely traded circular materials feedstock in Europe. A decade ago, used cooking oil was a low-value waste product, sold at $300-500 per tonne for use in soap production and animal feed. The expansion of renewable diesel and sustainable aviation fuel mandates across Europe transformed it into a strategic commodity. By mid-2025, ISCC-certified used cooking oil delivered in Northwest Europe was trading at over €1,100 per tonne. Energy Solutions described the price movement bluntly: “the value uplift is a policy artefact, not a reflection of UCO’s intrinsic energy value.” Neste, one of the largest users, responded by acquiring feedstock suppliers and signing long-term collection partnerships to lock in supply before the price rose further.

The same dynamic appears wherever a waste stream transitions from disposal cost to commercial input. In tyre recycling, Michelin’s move from buyer of recovered carbon black to direct equity investor in Scandinavian Enviro Systems is a vertical-integration response to exactly this risk. In textile recycling, Infinited Fiber secured its SOEX feedstock agreement early, recognising that textile waste would not remain cheap once the industry understood its value.

The implication for founders is that feedstock strategy is not a cost assumption to be set at the point of fundraising. It is an active commercial decision that requires long-term supply agreements, exclusive relationships with feedstock providers, or equity positions in the feedstock supply chain. The advantage is real, but it requires active construction and active defence. Free feedstock is a temporary state. The companies that act on this insight before their competitors recognise the same waste stream are the ones with the durable cost advantage. The ones that treat it as a permanent given are the ones who find, a few years into operation, that their fundamental commercial premise no longer holds.

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The equity gap

The fourth structural finding was the one most specific to the European context, and the one that requires the most precise framing.

The conversation observed that the willingness of corporates to take equity positions in upstream circular materials suppliers varies significantly by geography and sector. In critical raw materials, the distinction is clear. The United States has deployed a set of instruments, IRA tax credits, Defense Production Act guarantees, direct equity stakes, and long-term offtake contracts, that together create a market-shaping function for domestic supply chain development. The US Export-Import Bank has $100 billion in critical minerals and supply chain capacity to deploy. The US government took a 15% equity stake in MP Materials, a rare-earth processor, to secure domestic supply. The EU’s Critical Raw Materials Act, adopted in March 2024, sets ambitious 2030 targets of 10% extraction, 40% processing, and 25% recycling of annual EU needs from within the union, with no more than 65% of any strategic raw material from a single third country. The RESourceEU action plan, adopted 3 December 2025, aims to mobilise €3 billion in EU funds within twelve months. Scrap export restrictions on permanent-magnet waste are proposed by Q2 2026. But the Jacques Delors Centre’s assessment is direct: Europe’s instruments “largely repackage existing funds” and have not yet moved to the equity-participation model that would align European industrial capital with the supply chain build-out.

In textiles and bio-based materials, the picture is more mixed. Infinited Fiber’s 2024 funding round brought in TTY Management, the investment vehicle of Tadashi Yanai, founder of Fast Retailing and Uniqlo, as one of its top-three shareholders, alongside Goldwin and Youngone from Korea. Inditex is also a top-three shareholder and has signed an offtake commitment worth more than €100 million. H&M Group holds equity in Worn Again Technologies and co-founded Syre. European fashion brands are not absent from this picture.

The more accurate characterisation is that European industrial corporates outside the fashion sector, particularly in chemicals, automotive, and building materials, have been slower to move from procurement relationships to equity positions in the circular materials companies they intend to source from. Michelin is an exception, and its exceptions are notable precisely because they are exceptions. For most European industrial buyers, the procurement team and the corporate venture or investment arm operate separately. Procurement buys on price and specification today. Investment looks at the supply chain of tomorrow. The company that resolves that tension, so that its procurement function can endorse an equity position in a strategic supplier, is the one that will have the supply chain it needs in 2035.

Winner-take-most

The room’s fifth conclusion was the one that most directly affects the investment timing question.

In conventional materials markets, scale confers advantage but not dominance. Multiple suppliers can compete on price and specification indefinitely. In circular materials, the market structure that is beginning to emerge is different.

The first company to secure a large offtake agreement, build a production facility at the required scale, and demonstrate the economics at industrial volume holds structural advantages that are very difficult for a later entrant to overcome. The advantages are not primarily technological. They are logistical and relational. A company that has built a collection and sorting network for a specific waste stream owns the relationships with the feedstock providers in that geography. Those relationships took years to build and cannot be replicated quickly. A company with a long-term supply agreement with a major brand has a reference customer that de-risks the next commercial conversation. A company that has demonstrated production at scale has the cost curve data that allows it to price competitively while a later entrant is still on the steep part of their learning curve.

In textile-to-fibre, Infinited Fiber and Syre are building the first-mover positions. Renewcell’s 2024 bankruptcy, despite being the category pioneer with pre-sold offtake, shows that first-mover status does not guarantee success if the economics of the plant itself do not work. But Renewcell’s failure also removes a competitor and concentrates demand on the survivors.

In chemical recycling, Carbios in enzymatic PET, and Plastic Energy in pyrolysis with two operating plants in Spain and partnerships with TotalEnergies and ExxonMobil, have accumulated the offtake relationships and the operational track record that new entrants will struggle to replicate without years of commercial development and significant capital.

For investors, the implication is that the period of maximum risk and maximum opportunity coincides. The company currently struggling to close its offtake and fund its production is the company that, if it succeeds, will be structurally difficult to displace. The capital required to bridge that moment is the capital that captures the advantage.

What the room committed to

Three commitments came out of the conversation.

The first was to work toward a first-mover coalition for circular materials, modelled on the aggregate demand commitment structures used in hard-to-abate industrial sectors. A group of industrial buyers committing in advance to purchasing specified volumes of recycled or bio-based materials from qualifying suppliers, at a price that justifies the upstream infrastructure investment. This commitment remains open. The circular materials scaling dynamic is moving faster than the coalition-building.

The second was to examine what it would take for European corporate buyers to take equity positions in circular materials suppliers, and to identify the governance and structural barriers that prevent them from doing so. The fashion sector shows it is possible. The question is what it would take for automotive, packaging, and chemicals companies to reach the same conclusion.

The third was to engage with the developing EU policy framework, including the Critical Raw Materials Act, the RESourceEU action plan, and the Advanced Materials Act expected by Q4 2026, to ensure that the instruments being designed address the specific gap between early-stage innovation funding and production-infrastructure finance.

The Decision Room is convening the cohort that was in the May conversation to begin defining what these three pieces of work look like in practice. The shape will be determined with the room, not handed down to it.

Progress will be tracked publicly until Edition II in Zürich on 11 May 2027. A full status report will form part of Before Capital Flows Edition II.

The work is the point. The event is the architecture around it.

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The position

The implication of all this, for any investor, founder, or corporate in the circular materials space, is that the diagnosis of “more venture capital” is wrong. Not unhelpful. Wrong.

The problem is upstream. The infrastructure does not exist. It will not be built by venture capital alone, because venture capital is not structured to fund first-of-a-kind production facilities that require offtake commitments before they can be financed, and offtake commitments before the facility exists to demonstrate the specification.

The companies that will define the circular materials landscape in 2035 are building now. They are building not just the technology but the feedstock relationships, the offtake commitments, and the production infrastructure that no later entrant can easily replicate. The window to establish the dominant position in a given category is shorter than it appears. The regulatory pressure that is making circular materials commercially attractive to industrial buyers is also attracting competition.

The institutions that need to show up, with equity, with demand commitments, with the instruments that bridge the offtake-capex lock, are the industrial buyers who have made the public commitments and are now discovering that the upstream supply chain required to honour them does not yet exist. Michelin has understood this. The question is how many of its peers will reach the same conclusion before the positions are taken.

The room in Zürich was not unanimous on every point. There were sharp disagreements on whether the EU’s regulatory instruments are calibrated to the actual investment timeline, on whether CDMOs are a bridge or a dependency trap, and on whether the winner-take-most dynamic could be interrupted by a well-capitalised late entrant with better technology. There was no disagreement on the diagnosis. This is an infrastructure problem. Until it is treated as one, the technology will continue to work at pilot scale and stall on the way to industrial volume.

Edition II will return to this question with the coalition work tracked and the equity gap mapped. The next gathering is on 11th of May 2027 in Zürich. The work between now and then is not the event. It is the architecture being built around it.

If your work intersects with what the room described, the door is open.

Ways in.

Apply for Edition II. The founding allocation is open now, for those who joined us on the 8th May, at the lowest price The Decision Room will ever be priced. The full event is capped at 400. Each roundtable is capped at 20. → Apply for founding access

Partner the room. Co-host a roundtable. Shape the programming. Sit at every conversation that matters to your thesis. → Read the Partner File → Apply to partner

Read the full record. Before Capital Flows is the published record from all eight closed-door conversations at Edition I. → Before Capital Flows

Reply to this email if any of the work streams above are yours. We will be in touch directly.

Aaron C. Leaman

Co-founder,

The Decision Room aaron@thedecisionroom.net

The Decision Room is an invite-led climate and frontier-tech capital convening. Once a year. Zürich. This essay is the second in a series of eight, one per closed-door conversation from Edition I. The full record is Before Capital Flows.

This essay starts from that conversation, then builds outward. The diagnosis and the core argument are what the room produced. The supporting detail, the named companies, the figures, the policy context, comes from research conducted afterward to test and extend what was said. Where a claim is attributed to "a participant" or "the room," it reflects something said in the conversation. Everything else is verified independently. It is for investors, founders, philanthropic principals and operators who have run out of patience with the gap between intention and outcome..

Edition II · 11 May 2027, Zürich

The conversation this essay is built from was one of eight at Edition I. Edition II is where the diagnosis becomes work: the capital stack mapped, the commitments tracked, the same rooms reconvened with the people who can move them.

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The wrong question

For most of the last decade, the central question in nature finance has been some version of: how do we make capital flow to nature? It is the wrong question. It assumes the problem is supply. It assumes that if enough capital is mobilised, enough projects will be funded, and enough projects will deliver.

The evidence from the room said the opposite. The problem is not supply. The problem is structure. The pipes are leaking. The instruments are mismatched. The timelines are wrong. And the dominant model of how to deploy capital into nature, borrowed wholesale from conventional asset management, is producing the outcome it was always going to produce: capital pooled in the institutions that can absorb it, not in the ground.

The conversation did not produce a manifesto. It produced a diagnosis. And it produced a counter-thesis to the way nature finance is conventionally structured.

This essay starts from the closed-door conversation, then builds outward. The diagnosis and the core argument are what the room produced. The supporting detail, the named companies, the figures, the policy context, comes from research conducted afterward to test and extend what was said. Where a claim is attributed to “a participant” or “the room,” it reflects something said in the conversation. Everything else is verified independently. It is for investors, founders, philanthropic principals and operators who have run out of patience with the gap between intention and outcome.

It argues four things.

One. Nature finance, in its current form, is misdescribed as a portfolio problem when it is in fact a value-chain problem.

Two. Concentration across a single value chain de-risks each node and the system, while conventional diversification protects no one in nature.

Three. The standard 2/20 fund management model is structurally incompatible with the unit economics of impact in the Global South.

Four. With public first-loss capital retreating, the natural replacement is philanthropic and family-office capital, but only if it is reframed as catalytic rather than expendable.

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The leakage

A participant in the conversation offered a number that stopped the room. Less than 0.02% of capital pledged for nature reaches on-the-ground projects in the Global South. The figure is contested and the methodology behind it is not in the public record. But its directional claim is unarguable.

To understand why, consider how a typical commitment travels. A government, a foundation, or a multilateral announces a billion-dollar pledge for nature finance. The pledge flows to a development finance institution, which absorbs the overhead, the staffing, and the structuring costs. A layer is taken. The DFI deploys what remains through a fund of funds. Another layer is taken. The fund of funds allocates to managers, who take 2% per year on assets under management regardless of outcome, and 20% of any upside they generate. Another layer. The managers deploy into projects sized to absorb their cheques, which means projects sized at $5 million and above. Projects below that threshold, which is most projects in most landscapes, are structurally invisible to this capital. The architecture is real even if no single commitment maps exactly to this path. Each layer is doing what it was incentivised to do. The cumulative effect is what the 0.02% figure points at.

This is not a bug. This is the system working exactly as designed.

The structural pressure on this system intensified through 2024, 2025 and into 2026. Germany’s BMZ, historically one of the largest providers of first-loss capital in climate and nature funds, has been in active retreat. Its budget fell from €13.8 billion in 2022 to €10.05 billion approved for 2026, with longer-term projections pointing toward roughly €9.3 billion by the end of the decade. In January 2026, Minister Reem Alabali Radovan presented the BMZ’s reform plan, “Shaping the Future Together Globally,” telling reporters plainly: “We will not do everything everywhere, but sharpen our regional focus.” The ministry’s remaining commitments narrowed to the EU neighbourhood, North Africa and the Middle East, the Sahel, Sudan and the Horn of Africa, with climate-environment work in Latin America and Asia significantly scaled back. The 2025 OECD figures, released in April 2026, confirm a broader collapse: total DAC official development assistance fell 23.1% in a single year, to $174.3 billion, the steepest annual drop on record.

Public first-loss capital, the layer that has historically made it possible for institutional money to enter nature deals at all, is shrinking at the precise moment the room agreed it is most needed.

The conventional response is to call for more pledges, larger funds, and more aggregated capital. The room rejected this response. Larger funds make the leakage worse, not better. They push the average cheque size higher, which pushes the deployable opportunity set further away from the landscapes and communities that need capital most.

The response the room actually converged on was structural. The model has to be rebuilt around four ideas, each of which inverts a conventional assumption. First, concentrate capital across a single value chain instead of diversifying across unrelated assets, because in nature the risks are correlated and diversification protects no one. Second, redesign the fee model so the manager’s incentive aligns with the landscape’s outcome, not with assets under management. Third, replace the retreating public first-loss layer with catalytic philanthropic and family-office capital, structured as investable rather than expendable. Fourth, treat trust as infrastructure rather than as an output of better data, and fund the slow relationship work that conventional models cannot pay for.

Each of these is the subject of one of the sections that follow. The Brazil-nut case is the first proof point.

The Amazon-nut case

Bertholletia excelsa is a tree that can reach 50 metres and live for 500 years. It does not grow in plantations. It depends on a specific guild of bees, more abundant in primary forest than in disturbed or regenerating land, to pollinate it. It depends on the agouti, the only rodent capable of breaking open the hard pod that protects the seeds, to regenerate. Take away the forest, you lose the bees. Lose the bees, you lose the trees. To produce Brazil nuts at commercial scale, the forest has to remain standing.

The Brazil-nut forests of Madre de Dios cover more than two million hectares, around 30% of the region. Twelve and a half per cent of the regional population works in the industry. Around 1,000 individuals hold government-granted concessions ranging from 25 to 4,000 hectares. The harvest runs December to April. Pods, softball-sized, holding twenty or so seeds, fall from the canopy through the wet season. Each tree drops around 300 pods per season. Falling pods can cause traumatic brain injuries and have killed harvesters. Collectors walk their concessions, gather the fallen pods with a hooked stick called a pallana, carry them in tamshi-fibre baskets weighing 60 to 70 kilos back to camp. The pods are split open, the nuts dried and sorted, and hauled to a processing plant. Most concession-holders earn more than half their family income from the harvest. Around a third of concession-holders are women. In 2023, Peru exported 5,500 metric tons of shelled nuts for around USD 30 million. The top buyers were importers in Germany, the United States, the United Kingdom, the Netherlands and France.

The pressure on the chain is real and named. Some 80,000 hectares of Brazil-nut concessions overlap with mining or farming rights, the legacy of uncoordinated land-use decisions by different ministries. Illegal gold mining, illegal logging, and forest conversion to small-scale ranching are the primary threats. The economic alternative for a Brazil-nut concession-holder is to sell the land.

Amazonia Impact Ventures (AIV) operates a $25 million impact-linked debt fund deploying capital across the agrifood value chains of the Peruvian, Ecuadorean, Colombian and (soon) Brazilian Amazon. The fund is structured with catalytic capital alongside commercial capital, and it deploys through impact-linked loans, debt instruments that price down when borrowers hit sustainability-linked targets tied to forest conservation, restoration, gender outcomes and community benefit. AIV has made roughly $9 to $11 million across some 35 to 45 impact-linked loans, across 12 value chains, reaching 4,000 to 5,200 producers, of whom approximately 36% are women and 32% Indigenous. The fund touches 160,000 hectares under improved management.

What is unusual about AIV is not the volume. It is the architecture.

In Madre de Dios, AIV is not invested in “the Amazon.” It is invested in the Brazil-nut chain specifically. It supports two cooperatives: AFIMAD, the Madre de Dios Indigenous Forestry Association, formalised around 2009 and now representing 200 families across the Yine, Ese Eja, Amahuaca and Shipibo peoples in six native communities; and RONAP, the wild-harvester association whose nuts move from Madre de Dios to coastal Peru and then to international buyers. Between 2021 and 2024, AIV deployed roughly $770,000 across four repeated loan rounds to these two cooperatives, who collectively manage more than 115,000 hectares of standing forest. Interest rates are tied to traceability and conservation conditions, so the cost of capital moves with the integrity of the supply. The Wyss Academy operates in the same landscape on the upstream side, supporting the ecological and institutional conditions, agroforestry, eco-tourism, mining-landscape restoration, that determine whether the chain has a future. Innpact provides the blended-finance structuring expertise that allows the catalytic layer to sit alongside the commercial layer without confusing the price of risk.

Now follow the chain back from the buyer. An importer in Germany or the United States can verify, of a given consignment of shelled nuts, which cooperative they came from, and within the cooperative, which concession. Because they can verify it, they pay a premium. The premium flows back to the processing plant, which pays the cooperatives more per kilo. Because the cooperatives earn more, they pay the harvesters more. Because the harvester families earn more from the standing forest, they have less reason to sell the concession to a miner or a logger. Because the forest stays standing, the bees keep pollinating, the agoutis keep dispersing the seeds, and the trees keep producing. The chain has a future.

Each investment de-risks the others. When producers have stable income from harvest, they protect the standing forest, because the forest is the asset. When processors have access to working capital with traceability conditions tied to their cost of debt, they pay producers more, because cheaper debt rewards them for paying upstream. When off-takers can verify provenance to the level of an individual concession, they pay a premium, which flows back into the producer cash-flows that protect the forest. The system has feedback loops. It is not a portfolio in the conventional sense. It is a chain in which each link makes the others more solvent.

A conventional portfolio manager would look at this and call it concentration risk. One geography, one species, one ecosystem, one set of off-takers, one weather corridor. The textbook would say to diversify across uncorrelated assets to reduce variance.

The room rejected this framing. The variance, in nature, is not uncorrelated. If the Brazil-nut harvest fails, the producer community loses income, the forest comes under pressure, the processor cannot fill orders, the off-taker cannot meet contracts, and the lending fund’s portfolio is hit. The risks across nodes are intensely correlated. Diversification across unrelated assets does not reduce that correlation. It only ensures that when the chain breaks, the manager has other places to point.

Concentration with depth is different. Concentration with depth means that when one node weakens, the others can carry it, because the same capital that finances the processor can be redirected to support the producer, and the same trust infrastructure that took years to build remains available. Conventional portfolios maintain optionality. Value-chain investing builds reciprocity. Reciprocity is a stronger insurance product in landscapes where the alternative is collapse.

This is the anti-portfolio. It is not new in theory. Specialist agrifood investors have known it for decades. But it is in active opposition to how multilateral capital, sovereign capital, and most institutional capital deploy into nature, and that is the gap the room was naming.

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The 2/20 problem

The second structural finding from the room was simpler and more uncomfortable. Several participants challenged the standard fund-management fee model directly. The 2-and-20 structure, two percent of assets under management as an annual fee plus 20% of upside as carried interest, is the dominant economic engine of impact and venture finance. The room argued it is structurally incompatible with the economics of impact in the Global South.

The mechanics are straightforward. A fund manager’s income scales with the size of the fund, regardless of impact delivered. The incentive is therefore to raise larger funds. Larger funds need to deploy in larger cheques to keep operating costs under control. Larger cheques systematically exclude smaller projects. Smaller projects are where the durable, community-level impact in nature actually lives.

This is not a moral failure of fund managers. It is a design feature of the instrument. A manager running a $300 million fund cannot rationally cut $250,000 cheques into Indigenous producer associations, because the cost of due diligence, structuring, monitoring and reporting per cheque does not scale down. The fund’s economics force it upmarket. The instrument is doing what it was built to do.

Several funds in the room are experimenting with alternatives. Carry tied to impact KPIs rather than purely to financial return. Lower management fees in exchange for catalytic first-loss tranches. Hybrid structures that pool philanthropic and commercial capital with different return expectations sitting at different positions in the stack. None of these are mature. Many are politically difficult inside fund partnerships, because they reduce the manager’s economic upside.

But the principle is the one the room kept returning to. The cost of capital for the project has to be lower than the return the landscape can generate. In conventional fund economics, that maths often does not work. In well-designed blended structures, it can. Innpact, the room’s blended-finance specialist, has spent fifteen years building exactly the kinds of vehicles that allow philanthropic and commercial capital to sit together without one distorting the other. The technical knowledge exists. The willingness to use it at scale does not yet match the need.

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The first-loss vacuum

If the structural argument is that conventional fund economics cannot serve the projects that most need capital, the operational argument is that the layer of capital which has historically bridged that gap is shrinking.

First-loss capital, the tranche that absorbs initial losses to make a deal investable for institutional follow-on, has historically come from three sources. Public development finance, primarily DFIs and their parent ministries. Multilateral concessional capital. And philanthropy, where it has been willing to act commercially.

The first source is retreating. BMZ’s budget cuts are the most visible case, but they are part of a broader DAC-wide contraction. The second source is fragmented and slow. The third source is large but mostly inactive in the way it would need to be.

Global philanthropic capital is enormous in aggregate. The Wyss Foundation alone has committed CHF 100 million of the CHF 200 million Wyss Academy programme. The combined assets of European foundations run into the hundreds of billions. But most of this capital is structured as endowment, with conservative investment mandates that exclude the kinds of catalytic first-loss positions nature finance now requires.

The Swiss regulatory environment is illustrative. Foundations registered in Switzerland face significant constraints on using philanthropic capital in profit-generating vehicles. The risk-return-impact triangulation that catalytic capital requires sits in a legal grey zone that most foundation boards are unwilling to enter without specialist counsel. The result is that capital which is morally aligned with the work sits in conservative pools, while the work itself goes underfunded.

This is reformable. It requires three things. First, regulatory clarification on the use of endowment capital in mission-aligned vehicles, beginning with Switzerland and Germany where the foundation capital base is largest in Europe. Second, the development of standardised structures that allow foundation boards to participate without bespoke legal work on every deal. Third, a cultural shift inside foundation governance that recognises catalytic deployment as a continuation of mission, not a departure from it.

None of these are technical problems. They are coordination problems. They are exactly the kind of problem The Decision Room exists to surface.

Trust as infrastructure

The room returned, repeatedly, to one underdiscussed variable: trust. Not as sentiment. As infrastructure.

The technical apparatus of nature markets has matured significantly. Measurement, reporting and verification standards, satellite monitoring, registry technology, certification frameworks. The CRCF, the TNFD framework, the Science Based Targets Network for Nature, the UK Biodiversity Net Gain registry, all of these have made measurable progress. Where they remain weakest is not in the technical layer. It is in the trust layer.

A participant described it precisely. Trust is not produced by better data. It is produced by relationships. Multi-year, person-to-person, repeated commitments between off-takers, developers, investors and communities.

A participant cited the case of an Indigenous community in Mexico that spent five years building its own carbon project. They did not commission a methodology from a consultancy. They wrote their own. They did not contract a verifier to run the measurement, reporting and verification. They learned it themselves. When the first credits were issued, the community returned 92% of the proceeds directly to the families who had done the work. The buyers were not charity buyers. They were commercial off-takers who had spent the same five years building the relationship. This example was offered by the room as illustrative rather than independently audited, but the logic it points to is the one most participants converged on: the methodology was credible because the community designed it, and the economics worked because the layers of intermediation had been compressed. Most carbon projects in the Global South return less than half the value of the credit to the communities who hold the land; this one, as described in the room, returned 92% because the trust infrastructure was built before the instrument was designed, not after.

This is the operating principle that distinguishes value-chain investing in nature from financial-instrument trading in nature. Trust travels slowly. It cannot be accelerated through better software. It can be accelerated through repeated convening, repeated commitment, and a willingness by capital to enter conversations before instruments are designed, rather than after.

Most institutional capital cannot do this. The internal procurement, due-diligence and approval cycles of pension funds, insurers and sovereign wealth funds are not built for it. The result is that the trust infrastructure in nature finance is being built, where it is being built at all, by specialist funds, foundations and a small number of corporate buyers. This is structurally fragile. It depends on individual relationships and the continuity of specific people.

The room agreed that this fragility is a sectoral problem, not a project problem. Solving it requires institutional commitment to the convening function, to the slow work of relationship infrastructure that no individual deal pays for. That is true for The Decision Room. It is also true for the foundations, DFIs and corporates that are best placed to underwrite the work.

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What we are building from it

Three commitments came out of the conversation. The Decision Room is now reconvening the cohort to convert them into work.

The first commitment was for Wyss Academy and Amazonia Impact Ventures to propose a format for continued collaboration around the value-chain investment logic the case demonstrated. The second was to map a logical capital stack for nature-positive investments in high-risk contexts. The third was to examine the regulatory and tax frameworks, beginning with Switzerland, that prevent foundations from using endowment capital in profit-generating vehicles.

These are not panel commitments. They are real work. We are convening the cohort that was in the May conversation to begin mapping the capital stack it described, and to define what the programme of work looks like from here. What follows, the working sessions, the in-person gatherings, the published outputs, will be shaped by that conversation, not handed down to it.

The work is the point. The event is the architecture around it.

The position

The implication of all this, for any reader trying to deploy capital into nature, is that the standard playbook is failing in a particular and structural way. The playbook diversifies when it should concentrate. It fees away the value when it should align it. It waits for first-loss tranches that are no longer arriving. And it treats trust as an output of better data rather than as the infrastructure on which everything else rests.

The alternative is not a single fund product or a single deal structure. It is a posture. Pick the chain. Go deep across the nodes. Build catalytic structures that let philanthropic capital sit alongside commercial capital without one distorting the other. Reform the fee model so that the manager’s incentive aligns with the landscape’s outcome. And invest in the relationship infrastructure, the slow trust-building work, that the conventional model cannot pay for.

This is harder than running a diversified fund. It produces fewer logos for the annual report. It does not scale linearly with capital under management. It demands patience that quarterly reporting cycles cannot accommodate.

It is also the only model the evidence suggests will work.

The room in Zürich was not unanimous on every point. There were sharp disagreements on the right size of catalytic tranches, on the role of carbon revenue in landscape-level deals, on the right balance of speed and rigour in MRV. There was no disagreement on the diagnosis. The conventional model is leaking capital, mispricing risk, and excluding the projects that most need to be funded. Something else has to be built.

Edition II will return to this question with the commitments tracked, the capital stack mapped, and the regulatory work scoped. The next gathering is on 11 May 2027 in Zürich. The work between now and then is not the event. It is the architecture being built around it.

If your work intersects with what the room described, the door is open.

Ways in.

Apply for Edition II. The full event is capped at 400. Each roundtable is capped at 20. If the early allocation fills before September, the current rate will close early. → Apply for access

Partner the room. Partnership is editorial, not decorative. Co-host a roundtable. Shape the programming. Sit at every conversation that matters to your thesis. → Read the Partner File → Apply to partner

Reply to this email if any of the workstreams above are yours. We will be in touch directly.

The Decision Room is an invite-led climate and frontier-tech capital convening. Once a year. Zürich. This essay is the first in a series of eight, one per closed-door conversation from Edition I. The full record is Before Capital Flows

You were in the room on May 8th. Our inaugural gathering brought together 160+ decision makers. $100B+ in AUM. A deal closed before the day ended.

Going forward, this newsletter is where founding attendees get everything first: founding offers before they go public, progress updates on the 23 commitments tracked from Edition I, programme reveals, and follow-on calls between editions.

Why the name changed.

Momentum Summit was a pilot. We put everything we had into shaping an event that would catalyse action instead of playing the same old numbers game. And with your trust and support, it came to life in ways that surpassed what we’d hoped for.

What made the 8th of May special wasn’t just the agenda. It was the quality of the people in the room, and how fast they came together. Not fixating on problems. Not showcasing solutions. Actually making decisions and moving towards action.

That’s rare. The events industry isn’t built for it. Rooms of 500. Talking heads on stage. Founders pitching the wrong investors. Everyone leaves with a stack of business cards and the one conversation they actually wanted to keep going.

We built the opposite. And now the name says it plainly. Not a summit. Not a conference. A room where decisions get made.

Find us at thedecisionroom.net

What the room produced.

Eight closed-door roundtables. One open Capital Floor. An evening gathering that ran two hours past close. Zero detractors. The two words you used most: intimacy, and depth.

Eight rooms. 23 commitments now tracked.

We have published the closed-door record from Edition I. No names. No theatre. Where the room landed, what was committed to, and what we are tracking until the 11th of May 2027.

If you were in one of those rooms, this is your record. If you wanted to be, this is the closest you get without being there. Share it with anyone you think should be in Edition II.

Read the full release

The first follow-on call is happening.

At Edition I, the Wyss Academy for Nature hosted Systemic Capital: Unlocking Investment for Nature and Climate. Together with 20 other contributors, they explored what it takes to move capital into the places that need it most.

On Thursday 2nd of July, 14:00PM CET, we invite the community to pick up where things left off. The focus this time is moving from insights to action, discussing:

• blended finance structures,

• the catalytic role of philanthropic capital,

• barriers to scaling investment in the Global South,

• and the gap between capital providers and project developers on the ground.

The session is designed to surface concrete collaboration opportunities and define tangible next steps.

Come ready to engage. And if you weren’t in the room the first time, this is your chance to join us.

Join the follow-on discussion

This is the first of multiple follow-up sessions. The Decision Room is here to help you keep track and to facilitate the commitments you see as important.

Stay tuned, the next sessions will be announced through this newsletter too.

The photos from the day.

The full set from Edition I is yours. Flip back through your memories of the day. Save your favorites, share them, and tag us on LinkedIn or in your next newsletter.

→ Download the photos

The lowest price this room will ever be.

We review every seat. We cap every roundtable. We build the room backwards from the conversations that need to happen, not forwards from how many tickets we can sell. No overflow. No livestream. If you are in, you are in.

Edition II is a year out. We meet again on the 11th of May 2027 in Zürich But this room is designed for people who move early. The founding attendee rate is the lowest The Decision Room will ever be priced. It is open now, for a limited time, and only for those who joined us on the 8th May.

Tickets are limited. The full event is capped at 400, and each roundtable is capped at 20.

If the founding allocation fills before September, this rate will close early. After that, applications will move to the live rate on the site at the time you apply: Early Bird, then Standard.

→ Apply for founding access

Partner the room.

Partnership here is editorial, not decorative. You shape the themes we will cover, co-design the closed-door discussions, and sit at every conversation that matters to your thesis. Not a logo on a wall. The full structure, every way in, is in the Partner File.

→ Read the Partner File
→ Apply to partner

From the co-founders

You were the first room, which makes you the founding cohort. Edition II is built around what you told us worked, what you told us didn’t, and the commitments the closed-door rooms made together

The format protects what made the first one matter. Density over volume. Intent over performance. The right people, in the right rooms, on the right questions.

Simply reply to this newsletter to chat! We’re excited for what’s next.

Aaron & Camille

Co-founders · The Decision Room