In episode 93 of the Investing in Impact podcast, I sit down with Nick Dilks, Co Founder and Managing Partner of Ecosystem Investment Partners (EIP), a firm that has quietly become one of the most important players in large scale ecological restoration in the United States.

Nick grew up splitting time between Philadelphia and a family farm on the Chesapeake Bay. That early exposure to land and water shaped a life long focus on conservation. After a decade at The Conservation Fund structuring complex land deals, he co founded EIP in 2006 to answer a simple but difficult question.

Can you use private capital, at scale, to restore degraded ecosystems while still meeting the financial expectations of institutional investorsOver almost twenty years, EIP has shown that the answer is yes.

The firm acquires degraded land, restores wetlands, streams, and habitats, then sells mitigation credits to public and private developers that are required by law to offset their environmental impacts. It is a space where environmental protection, infrastructure, housing, and finance all intersect.

In this conversation, Nick explains how mitigation banking actually works, why these markets are fully regulated and compulsory, how a new $400 million dollar fund will expand EIP’s work, and why he believes more young people should bring serious financial skills into the environmental sector.

From a Chesapeake Bay Farm to Conservation Finance

Nick’s path into environmental investing started in a very practical place.

He spent his childhood in the city, but his extended family ran a farm on the Chesapeake Bay. That mix of urban life and working land turned into an early fascination with conservation, not as an abstract idea, but as something rooted in real places and real economics.

That interest led him into land trusts and eventually into a ten year run at The Conservation Fund, an organization that acquires and protects land across the United States.

There he learned the mechanics of land deals, conservation easements, financing structures, and how transactions can protect millions of acres when they are done well.

Even at that stage, he saw that land conservation had two sides.

• The ecological outcomes that everyone cares about
• The transactional, financial work that makes those outcomes possible at scale

That dual lens set the foundation for EIP.

Why EIP was created

By the mid 2000s, one problem kept showing up in conservation.

There was simply not enough philanthropic and public money to fund the scale of restoration that was needed. Government budgets and charitable dollars could not cover everything.

At the same time, a different world was starting to mature. Environmental markets linked to laws like the Clean Water Act and the Endangered Species Act were becoming more structured.

In particular, mitigation banking was emerging as a way to:

• Let necessary development move forward
• Require that environmental damage be offset
• Bring in private capital to finance restoration work

Nick and his partners, including co founder Fred Danforth, saw an opening.

Could they build a firm that:

1. Raises capital from institutional investors
2. Acquires degraded land in key watersheds
3. Restores wetlands, streams, or habitats to a high standard
4. Sells verified credits to developers who need mitigation in order to receive permits

If it worked, investors would receive financial returns. Communities would get needed infrastructure, housing, and industry. The environment would see permanent gains in water quality and habitat.

That is the business that became Ecosystem Investment Partners.

How mitigation banking and the business model work

Under the Clean Water Act and related laws, any project that impacts wetlands, streams, or certain habitats has to follow a clear hierarchy:

1. Avoid impacts where possible
2. Minimize impacts that cannot be avoided
3. Mitigate unavoidable impacts in the same watershed

This applies to:

• State departments of transportation building highways
• Utilities building reservoirs
• Private developers building housing or commercial projects
• Solar farms, data centers, ports, airports, and more

Once a project has done everything it can to avoid and minimize impacts, it still needs to offset what remains. The law requires that the damaged resources be replaced by restoring or enhancing similar resources nearby, for example:

• If you impact a forested wetland, you must restore a forested wetland
• If you impact streams, you must restore streams in the same watershed

Developers have two main choices:

• Do it themselves. Plan and build their own restoration project, then manage it long term.
• Buy mitigation credits. Purchase credits from a firm like EIP that has already completed a large scale restoration project that meets regulatory standards.

EIP focuses on the second path. They:

• Identify degraded properties with high ecological potential
• Acquire the land and secure conservation easements or deed restrictions that protect it forever
• Design restoration plans with technical partners and secure agency approvals
• Execute the restoration work, which can include regrading land, re establishing natural flows, replanting native vegetation, and more
• Monitor outcomes and verify performance over time
• Sell mitigation credits from that project to public and private buyers in the region

Pricing of credits is market driven, not set by government. EIP has to:

• Understand the cost of acquisition, design, construction, monitoring, and capital
• Understand demand in each market, such as how much infrastructure or housing is planned in a given watershed
• Set credit prices at a level that covers costs, compensates investors for risk and time, and remains competitive for buyers

It is a real market. Developers are free to do their own mitigation instead, but many choose to buy credits because it is faster and more reliable than trying to become a restoration expert overnight.

A concrete example: stream restoration in Eastern Kentucky

To make this real, Nick points to Eastern Kentucky.

The region has one of the highest densities of streams in the country. It also has a complex history of mining, logging, and other activities that have degraded water systems. At the same time, the state is trying to improve transportation access and economic opportunity.

When the Kentucky Transportation Cabinet builds or expands roads, it often cannot avoid impacting streams. That triggers a significant need for stream mitigation across the region.

EIP stepped in about fifteen years ago to meet that need:

• They acquired properties where streams and surrounding lands had been heavily degraded by historic land use.
• They restored those streams to a healthier state, improving water quality and habitat.
• They put the land under permanent protection.
• They generated mitigation credits, which the highway department uses to meet its legal obligations.

There is another layer that matters. Many of the firms that handle earthmoving and construction for these projects are former coal contractors.

As the coal sector declined, these companies lost work. Stream restoration gave them a new line of business that connects their existing skills to a different outcome.

It is a good example of how an environmental market can:

• Support infrastructure
• Improve ecosystems
• Maintain or even create local jobs

Who buys the credits

Roughly half of mitigation buyers in the United States are private entities, not governments.

Credit buyers include:

• Housing developers
• Commercial developers
• Industrial facilities
• Data centers
• Solar and wind projects
• Transportation and utility projects

Public buyers include:

• State departments of transportation
• Port authorities
• Airport authorities
• Water utilities

If their project affects wetlands, streams, or habitat in a regulated way, they are required to mitigate those impacts. For many of them, purchasing credits is the most efficient path.

From their perspective, buying credits:

• Avoids the risk of failed in house restoration
• Avoids long delays related to permitting and construction of mitigation projects
• Lets them focus on building housing, roads, or facilities while specialists handle restoration

From the public’s perspective, it also provides assurance. Credit projects are designed, permitted, and often already performing before the credits are sold. That means the replacement ecosystem is real, not hypothetical.

The new $400 million dollar fund

EIP recently raised a $400 million dollar fund to continue and expand this work.

The new fund will:

• Finance new mitigation banks and restoration projects across the United States
• Enter new geographies where EIP has not operated before
• Re supply markets where previous mitigation banks have sold out their credits but development continues

The focus does not change. The firm will keep centering on:

• Large scale, high quality restoration
• Regulated, compulsory mitigation markets rather than voluntary offsets
• Long term protection and monitoring of restored sites

The fund is another signal that investors now see ecological restoration as a serious asset class with a track record, not just an idea.

Mitigation credits versus voluntary carbon and nature credits

There is growing interest in voluntary carbon credits, nature based solutions, and new types of environmental credits that companies can buy to meet climate or nature goals.

Nick sees potential in those efforts, but he draws a clear line between them and EIP’s core focus.

Mitigation credits for wetlands, streams, endangered species, and water quality in the United States are:

• Rooted in long standing federal and state law
• Regulated and compulsory, not voluntary
• Governed by rigorous standards, monitoring, and enforcement

Most newer carbon or nature credit systems are voluntary and still evolving. They can be valuable experiments, but they lack the same regulatory backbone.

For EIP’s investors and customers, that regulatory certainty is a key part of the value proposition.

So EIP has stayed focused on the more mature, compulsory markets rather than shifting into voluntary offsets.

Development, housing, and environmental law

One question that comes up often is whether environmental rules and mitigation requirements make it harder to build housing and infrastructure that communities clearly need.

Nick’s answer is clear.

Clean water, functional ecosystems, and habitat protection are not optional.

At the same time, people need homes, schools, and roads. The strength of laws like the Clean Water Act is that they make room for both realities.

• They do not say “no development”
• They do say, “if you build in sensitive areas, you must offset the damage in a real and measurable way”

Mitigation banking is part of the efficiency story, not the obstacle. It allows:

• Developers to meet their obligations quickly by buying credits
• Restoration specialists to handle the technical work
• The public to see tangible environmental gains tied to real projects

It does not solve every issue in housing or infrastructure, but it ensures the environment is not forgotten in the rush to build.

What happens to restored land after credits are sold

A final important question is what happens to the land once a project is complete and the credits are sold.

Regulations require that mitigation sites be:

• Restored or enhanced
• Permanently protected through conservation easements or deed restrictions

In many cases the land later becomes:

• A wildlife management area
• A conservation property owned by a land trust
• A public asset where people can eventually hike, fish, or simply benefit from higher water quality

EIP’s role is not just to restore the land temporarily. It is to put those restored systems on a path where they are legally protected and can function as part of a larger landscape for generations.