Conservation-related projects are starting to draw larger amounts of investor money: a total of USD 150 billion is expected to be invested into nature by the close of 2020.
A new report from the Biodiversity Finance Initiative also shows that there are more and more investments that both produce a financial return and a measurable biodiversity benefit, indicating that the divisions between conservation, philanthropy and for-profit finance may be waning.
This is a welcome trend, as public funds alone will be woefully insufficient to address the growing biodiversity crisis.
Linking projects and investors: the Coalition for Private Investment in Conservation (CPIC)
New, private sector-led financial flows for conservation need to be facilitated and effectively directed towards deserving projects for them to have an impact – which is precisely the ambition of the Coalition for Private Investment in Conservation (CPIC), a 85+ member strong multi-stakeholder initiative that focuses on enabling conditions that support a material increase in private, return-seeking investment in conservation.
The coalition facilitates exchanges between project developers and investors to help project developers improve projects – and investors to find them. CPIC also collects and shares lessons learned in the form of conservation finance blueprints, for example, that could provide a basis for replicating proven investments, and allow financial institutions to more comfortably step in and provide financing.
Our team at South Pole fully endorses CPIC's mission and are equally committed to increasing the number of real case studies to prove the argument that protecting natural capital is necessary, possible and, above all, lucrative.
Biodiversity and climate action are strongly linked: the case of the Landscape Resilience Fund
From a climate action perspective, nature-based solutions – solutions and activities that protect, restore and sustainably manage marine, land and forest ecosystems – not only safeguard biodiversity, but can deliver greenhouse gas emission reductions, in line with the Paris Agreement, cost-effectively at scale.
Our experience as a globally recognized expert in carbon and project development also shows that biodiversity and climate are much closer linked than previously understood: our planet's forests, for instance, contain more carbon than exploitable oil, gas, and coal deposits combined. Preventing emissions from deforestation and land-use change is just as urgent than transitioning away from fossil fuels. By working with nature instead of against it, we can avoid unleashing 'irrecoverable carbon' and conserve biodiversity – a cornerstone of our economic and social fabric that affects the industries we have and the food we eat.
Natural ecosystems, such as forests and mangroves, are also the lifeline to a quarter of the world's population, many of whom are among the world's poorest. To better protect both people and planet, South Pole has developed a new Landscape Resilience Fund that provides technical assistance and soft loans to small enterprises that preserve ecosystems and adapt agricultural practices to climatic changes.
The Landscape Resilience Fund is a good example of how to connect the dots between biodiversity and climate finance. Through its technical assistance work, it also addresses the typical deal flow issue in nature finance: there is a growing community of investors hungry for nature-based investments that match their interest – but not enough suitable investment opportunities that live up to their requirements. Interested private investors need proven investment models but also a pipeline of projects with the right risk/return profile to get behind, this is exactly where the Landscape Resilience Fund comes in.
The Landscape Resilience Fund with its focus on adaptation to climate change uses a similar approach to build new investment cases than another exciting initiative that has just been launched: the Nature+ Accelerator Fund that more explicitly focuses on conservation.
Mobilising the billions for nature requires smart solutions: The Nature+ Accelerator Fund
This November, IUCN with partners, launched the Nature+ AcceleratorFund. True to its mission of providing a platform for knowledge and partnerships that support private investment into conservation, CPIC has supported and inspired the creation of the Fund, a unique collaboration of noteworthy global institutions, led by the International Union for Conservation of Nature (IUCN), Global Environmental Facility (GEF) and Mirova.
This first-of-a-kind private sector nature conservation accelerator backed by GEF as anchor investor. To ensure a credible and robust framework for impact measurement and effective deal/project structuring approaches, CPIC's new Fund Structuring Working Group will support the application process and share lessons learned far and wide within the conservation community.
The expected outcomes of the commercially-operated Nature+ Accelerator Fund are ambitious:
- A portfolio of up to 70 successful investment deals, attracting co-investment up to US$160M beyond the Nature+ Accelerator funding;
- Proof of concept of a suite of nature-based solutions (NbS), aligned to the IUCN Global Standard for Nature-based Solutions;
- Significant biodiversity and ecosystem conservation impacts, measurably reducing extinction risk of IUCN Red List threatened species and contributing towards national and global targets, including the Convention on Biological Diversity (CBD) post-2020 Global Biodiversity Framework;
- Measurable contribution towards the UNCCD Land Degradation Neutrality objectives and the UN Decade on Ecosystem Restoration;
- Climate change mitigation and adaptation impacts aligned to the 1.5C global target set by the UNFCCC Paris Agreement; and
- Socio-economic impacts for local communities, including improved livelihoods and gender equity, contributing towards achievement of the Sustainable Development Goals (SDGs).
With over half of the world's GDP generated by industries that are dependent on nature and its services, there is a growing realisation among the private sector that this is not just an ecological crisis we need to address, but an economic one too. The next step is for forward-thinking private sector leaders to set up further funds similar to the new Nature+ Accelerator Fund and the Landscape Resilience Fund.
South Pole, as the platform coordinator for CPIC and the manager of the Landscape Resilience Fund is looking forward to interactions between the two funds and learnings being shared to scale up best-practices in financing of nature-based solutions.
South Pole is an award-winning project developer and leading advisor on climate action solutions. South Pole also acts as the Platform coordinator for CPIC. For more information on CPIC and its activities, visit http://cpicfinance.com/ and sign up to the CPIC bi-monthly newsletter.
For more ways to get involved in the Nature+ Accelerator Fund:
- Read more about the Fund and reach out to IUCN to inquire about opportunities with the Nature+ Accelerator Fund
- Join the first launch event on 4 November 4-5 pm CET, 10-11 am ET to learn more and to contribute to the success of the Nature+ Accelerator.