A Planetary Health Check for Investment: Europe’s Planetary Boundaries Fund

By Sandrine Dixson-Decleve, Advisory Board Member, Eurazeo Planetary Boundaries Fund, Co-Chair, Earth4All, and Former Co-President, Club of Rome; and Sophie Flak, Member of the Executive Board & Managing Partner, Sustainability & Impact, Eurazeo The Potsdam Institute for Climate Impact Research’s (PIK’s) latest Planetary Health Check shows that humanity has crossed most planetary boundaries, with seven out of nine key planetary systems now outside the safe zone that once ensured Holocene stability. This shift is reflected in the rapid rise of global temperatures and accelerating environmental degradation, which are no longer mere backdrops to economic activity but limiting factors with direct impacts on human well-being, economic health and financial stability. Increasing environmental pressures—climate change, biodiversity loss and pollution—are now major risks for businesses and the financial sector. Physical, transition and systemic risks are intensifying, challenging traditional financial models based on stability and the unlimited substitution of natural capital, while the interdependence of Earth systems is increasing overall vulnerability. The planetary boundaries were first proposed in 2009 by a group of 28 internationally renowned scientists led by former Stockholm Resilience Centre (SRC) Director Johan Rockström. Combining insights from many fields of global environmental-change research, the framework highlights nine global change processes whereby human activities affect the Earth system’s functioning. Planetary boundaries are quantitative assessments of the safe limits for human pressure on these nine critical processes. In 2023, a team of scientists quantified, for the first time, the nine processes of the Planetary Boundaries framework that together maintain a stable and resilient Earth system. For the financial sector, embracing the Planetary Boundaries framework fosters a coherent, science-based approach to sustainability and offers a pathway beyond current fragmented environmental, social and governance (ESG) strategies. For the financial sector, embracing the Planetary Boundaries framework fosters a coherent, science-based approach to sustainability and offers a pathway beyond current fragmented environmental, social and governance (ESG) strategies. The Planetary Boundaries framework articulates the biophysical limits within which economic activity must—and can—operate safely. It represents a paradigm shift: moving from measuring relative performance to pursuing absolute sustainability, meaning developing activities compatible with the safe operating space for humanity. Such a shift is essential in a world where cumulative impacts far outweigh incremental improvements. Scientific evidence shows that addressing the climate crisis requires coordinated action across the entire Earth system. Likewise, tackling the biodiversity crisis demands both global and local interventions across multiple environmental dimensions. By integrating these limits into financial decision-making, institutions can assess whether investments are genuinely compatible with a stable Earth system, rather than merely “less harmful” than the alternatives. This has become a new imperative to ensure the medium-term viability and value-creation potential of assets and investments, as the cost of inaction increasingly exceeds the cost of action as we move beyond a 1.5°C world. Investing in environmental solutions has become not only a vital response to the environmental crisis but also a strategic market segment for building resilient businesses and achieving returns in line with industry best practices. This approach strengthens resilience at several levels. At the portfolio level, it helps identify companies developing innovative solutions aligned with planetary boundaries, while steering clear of businesses vulnerable to continued boundary breaches—such as those involved in deforestation, excessive water consumption or chemical pollution. At the strategic level, it enables anticipation of ecological and regulatory tipping points that could trigger abrupt asset revaluations and market shifts. At the systemic level, aligning capital flows with planetary limits enables building the resilient business and economic solutions of the future, starting today. Moreover, the Planetary Boundaries framework opens new avenues for value creation by highlighting investment opportunities in activities that operate within or actively restore the safe operating space. Investing in and scaling these solutions not only supports market-expected returns but also lays the foundation for a future economy that must function within finite ecological limits. Financial institutions that can identify, evaluate and support such opportunities will be better positioned to thrive in the long term, ensuring both their resilience to future shocks and stresses and their competitive advantage. In 2025, Eurazeo took a pioneering step by launching the first fund dedicated to businesses operating within or contributing to the Planetary Boundaries framework. In 2025, Eurazeo took a pioneering step by launching the first fund dedicated to businesses operating within or contributing to the Planetary Boundaries framework. With a longstanding dedication to sustainable business practices—including the O+ strategy—and a proven track record spanning two decades demonstrating how sustainability drives returns, Eurazeo’s new fund further advances the integration of planetary boundaries into investment selection. The Eurazeo Planetary Boundaries Fund (EPBF) is dedicated to scaling up effective, proven solutions, making their value visible through the lens of the Planetary Boundaries framework, which emphasizes the interconnectedness of environmental systems and economic outcomes. Its objective is to develop global champions in key domains essential for maintaining or restoring the safe operating space as defined by the Planetary Boundaries framework, while being shielded from environmental disruption. Although several initiatives have attempted to apply this framework, none have fully addressed all aspects of Earth’s complex systems or provided a comprehensive approach for business activities that extend beyond climate change alone. Assessing a business’s impact across planetary boundaries is a complex undertaking, and Eurazeo is proud to have developed a rigorous, science-based methodology to guide the fund’s activities. This methodology is essential for selecting opportunities and directing capital toward businesses that genuinely enhance resilience. It combines high-level product and organizational lifecycle assessments with core evidence-based and data-driven indicators for each planetary boundary, identifying positive and negative impacts across all nine boundaries. The central principle is to avoid burden shifting between limits, ensuring that activities produce net benefits without negatively affecting other boundaries—or, at the very least, allow for mitigation of any negative impacts. This holistic methodology is applied throughout the investment cycle, from due diligence to company-development planning. It supports the preparation of an assessment matrix, positioning company activities on each planetary boundary and analyzing impacts from minor to critical. This enables a focused approach on a maximum of two to five boundaries, facilitating the development of targeted action plans, simplifying systemic complexity and making communication and implementation more effective, with environmental and financial objectives seamlessly integrated throughout the process. Our environmental strategy and financial planning are integrated to foster a sustainable business model. This dual focus not only strengthens our financial viability but also aligns our operations with the long-term health of our planet. The Planetary Boundaries framework provides a shared language that links science, policymaking and finance, enabling diverse stakeholders to collaborate more effectively. The EPBF methodology builds upon this foundation, offering a practical, science-based approach rooted in the Planetary Boundaries framework. By translating complex Earth-system science into actionable metrics and measurable targets, the EPBF methodology empowers organizations and investors to make informed decisions that reconcile sustainability goals and fiduciary duty. This approach not only promotes greater consistency and reduces uncertainty but also facilitates more efficient capital allocation, ultimately helping drive meaningful progress toward safeguarding our economic systems within a healthy planet. Incorporating planetary boundaries into financial decision-making represents more than an effort to advance sustainability—it acknowledges the profound interdependence between economic systems and the biosphere. Since 2025, this methodology has empowered the EPBF to successfully complete its initial investments in Bioline AgroSciences, renowned for its cutting-edge biocontrol solutions, and SMP Energies, a specialist in geothermal development, two fast-growing market segments that are compatible with the planetary boundaries. At first glance, Bioline may seem solely associated with biodiversity, which is accurate, but this perspective risks overlooking the company’s critical contributions to chemical-pollution reduction and water management, which will become increasingly important for enhancing asset value. These interconnected challenges must be addressed holistically to ensure a robust, profitable and sustainable growth trajectory for Bioline. In parallel, SMP Energies is widely recognized as a climate-change solution provider in the energy sector; however, drilling activities also generate a variety of environmental externalities. Indeed, it requires significant amounts of energy and water, as well as chemicals. Improving the environmental footprint of these projects is, therefore, both an economic and environmental necessity if we are to successfully scale up this solution and integrate it into the European energy mix. From a societal perspective, geothermal energy offers a long-standing, sovereign renewable-energy source for both heating and cooling. The EPBF’s mission is driven by a commitment to developing business champions that not only tackle climate change but also safeguard natural capital—including biodiversity, water resources and soil quality—while simultaneously delivering the expected financial returns of a buyout fund (i.e., 20-percent internal rate of return [IRR]). This balanced approach is firmly rooted in scientific research and shaped by a pragmatic understanding of the complexities inherent in our living planet. The EPBF’s support for European companies embracing planetary boundaries helps foster robust, adaptable businesses at a time when Europe is striving to enhance competitiveness. The chosen organizations are better equipped to navigate shifting realities and enable greater territorial resilience amid today’s unpredictable geopolitical landscape, value-chain disruptions and growing climatic impacts across the European Union (EU). At a time when geopolitical conflicts and environmental tipping points are increasingly affecting our food, energy and material value chains, a planetary boundaries compass becomes essential not only for environmental stewardship but also as a strategic guide for managing risk and uncertainty. This approach encourages stakeholders to move away from short-term, reactive tactics. Instead, they adopt resilient and structurally aligned strategies that reduce vulnerability to systemic shocks. By tackling the ecological origins of instability, the financial sector can play a pivotal role in building an economy that is more stable, secure and predictable. Ultimately, embracing planetary boundaries is not merely a matter of responsibility; it has become a strategic imperative for organizations seeking to thrive amidst growing environmental constraints and global volatility. By integrating this holistic perspective into investment strategies, the EPBF is paving the way for a future in which economic and financial success alongside planetary health are mutually reinforcing. By sharing its methodology and the rigor of its approach, Eurazeo is hopeful that a planetary boundaries approach across all investment classes becomes the norm, not the exception. _____________________ Endnote This article was developed with contributions from Laurent Gilbert, Advisory Board Member, Eurazeo Planetary Boundaries Fund and former Sustainable Innovation Director at L’Oréal; Audrey Lambry, Director, Sustainability & Impact, Eurazeo Planetary Boundaries Fund; and Hans Bruyninckx, Advisory Board Member, Eurazeo Planetary Boundaries Fund, Professor at KU Leuven and Ghent University, and former Executive Director of the European Environment Agency. Sophie Flak is a Member of the Executive Board and Managing Partner for Sustainability & Impact at Eurazeo. With over 20 years’ experience, she specialises in sustainable and technological transformation driving performance and resilience. She held senior roles at Accenture and Accor and has served on the National Digital Council and the European Commission’s European Financial Reporting Advisory Group.