In the context of yearly ecological overshoot, policies and financial initiatives for sustainable management of natural resources appear in increasing numbers. This paper illustrates the current trends of foreign investments concerning nature conservation by examining the potential relation between ecological footprint per capita and country risk premium. The analysis is conducted on a panel of 91 countries across 18 years (from 2000 to 2017), using panel data analysis. The findings suggest that the relation between ecological footprint and country risk premium follows an inverse trend, meaning that countries with a very low ecological footprint tend to have unusually high-risk premia and that risk premia tend to get closer to 0% when the ecological footprint is high. The results can be interpreted as a complementarity relation rather than a cause to effect relation, meaning that increased attractiveness to foreign investors by the mean of a lower country risk premium currently implies a higher consumption of biocapacity.

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Ecological footprint,Country risk premium,Investment,Ecological Sustainability