Escalating environmental threats, including those associated with climate change, demand new types of responses to preserve the integrity of the world’s ecosystems. Implementing these conservation responses requires significant financial resources from both the public and the private sector. Conservation organisations have been experimenting with ways to attract private sector partners to help meet this financing demand. It is now time to consolidate our understanding of such early experiences, identify best practices, and work towards achieving impact at scale.
This report seeks to inspire investments in conservation, and sustainability more broadly, by providing a practical framework for evaluating opportunities and showcasing real world examples of conservation finance. It discusses how conservation organisations can conceptualise investment opportunities that amplify and accelerate their activities. This report also analyses the different roles these organisations can play in mobilising private capital and reviews essential considerations for effective delivery of conservation investments. Besides addressing conservation organisations, it also seeks to inform investors willing to allocate capital in ways that yield positive environmental and social impacts alongside financial returns.
To appeal to mainstream investors and mobilise funding at scale, conservation organisations and their partners need to reframe conservation opportunities through a commercial investor lens. This report points the way forward by analysing what motivates, enables and challenges relevant investor groups that may consider investments in conservation.
Natural capital such as soils, water and air are cornerstones of healthy ecosystems upon which food security depends for present and future generations. As a food industry, we have a responsibility to develop our business and operations in a way that safeguards natural capital, and in particular biodiversity and ecosystem services. To do so, it is key that we work with stakeholders including farmers, suppliers, governmental agencies, communities and conservation organizations to develop collaborative approaches to the stewardship of natural capital. Together, we can help create a future where people, planet and sustainable business solutions act in harmony to nourish people.
HJ
Hans Jöhr
Head Corporate Agriculture, Nestlé
This includes a discussion of how governments can facilitate investments in conservation. A list of key investor characteristics is provided to facilitate the identification and engagement of relevant investor groups. Effectively communicating both the financial and nonfinancial characteristics of conservation investments is paramount for attracting capital. For non-financial outcomes, this means identifying a set of impact metrics that have a scientific basis, are measurable and cost-efficient to track over time, and are materially relevant to investors. Financial characteristics include potential revenue sources and costs, which must be assessed to estimate expected returns. Risks should be mitigated where possible, which includes designing conservation investments in partnership and consultation with local stakeholders to ensure their participation and buy-in during the implementation phase.
This report adds the transactional reality and 'how-to' to the concepts of environment finance.
DC
Dave Chen
Chairman, Equilibrium
The good news is that conservation organisations have a solid basis of existing experiences to build upon and to draw inspiration from. This report illustrates through case studies how conservation organisations have helped to develop new dedicated investment funds, incubated new companies, supported the issuance of climate-friendly bonds and even established subsidiaries to finance conservation-friendly enterprises. Although certain investment structures may receive significant media attention, it is essential that a financing instrument is chosen to best suit specific underlying conditions. The local environment, stakeholders, the required time horizon, as well as investors’ needs, must be considered in structuring investments that are sustainable and scalable. Scalability remains a key challenge that will require new approaches, for example at landscape or jurisdictional levels, and track record.
The theme of conservation finance, and impact investing more generally, is met with growing investor interest.
Conservation finance has the potential to broaden the engagement of the financial services industry from the reactive, risk-management approach of CSR to a more proactive, revenue-generating approach – and, in doing so, greatly strengthen the business case for corporate sustainability. If conservation organizations and financial institutions manage to speak the same language, they may be able jointly to unlock capital at a scale that makes a real difference for global ecosystems.
JT
John Tobin-de la Puente
Professor of Practice of Corporate Sustainability, Cornell University
Conservation organisations and their partners are sharing their experiences and are working in innovative collaborations to direct capital to activities that have social and environmental benefits. We hope this report helps to increase the level of investment activity in this space, to address the environmental challenges that current and future generations face.