Activity continues to bubble over in the world of landscape finance, conservation finance and systems-change finance, or whatever you want to call the related fields of place-based investment. It’s challenging to keep up with all of the most relevant reports and news. The 1000L Finance Solutions Design Team is working on reimagining ways to fund landscape-level change, so we think it’s important to stay well-informed about the latest innovations and actors operating in the space. We’re happy to continue our finance-focused newsletter, a resource to help readers gain more perspective on landscape finance.
These are the landscape finance-related developments and reports that caught our eye over the summer of 2022.
News & Developments
New Collaborative Capital Venture Between Conservation International and a Leading Asset Manager
Conservation International has teamed up with UK asset manager Schroders to establish a venture that will invest in projects across Southeast Asia focusing on halting and reversing nature loss. The new fund house, Akaria Natural Capital, will also prioritize making positive impacts in local communities.
McKinsey Joins Collaborative Initiative to Accelerate Conservation Funding
Global management consulting firm McKinsey is collaborating with several conservation non-governmental organization (NGO) partners on a model that seeks to provide technical support and long-term funding structures through a “Project Finance for Permanence Approach.” Their work will support conservation efforts to achieve sustainable impact. Among the services that McKinsey provides are analysis of socioeconomic impact identifying funding mechanisms and identifying optimal methods to deliver on the long-term funding.
Climate Bonds Initiative (CBI) Preparing a Climate Resilience Taxonomy (behind paywall)
The CBI is designing a new classification framework that integrates social, economic and ecosystem resilience into a combined taxonomy. Resilience refers to an ecosystem’s ability to respond to disturbance or recover from damage. The new methodology will also take into account climate adaptation and physical climate resilience.
Biosphere Integrity Fund in Development by Asset Manager Clarmondial
Clarmondial is creating an investment fund to create, finance and help scale up small- and medium-sized businesses involved in addressing biodiversity loss and strengthening ecosystem goods and services. The fund also will explore financing climate and biodiversity commitments. The Biosphere Fund is based on the Business Case for Collective Landscape Action Initiative, a partnership between Rainforest Alliance, Conservation International and CDP that is supported by USAID.
UK Pension Fund’s Impact and Place-Based Investments Substantially Outperform Fund Average
Clwyd, A UK pension fund, that follows a place-based approach achieved a quarterly rate of return over three times higher than the fund universe average in early 2022. Clwyd prioritizes place-based investments which, similar to landscape finance, address community needs to enhance local economic resilience and sustainable development.
African Development Bank (AfDB) Seeks to De-risk Climate Investments in Africa
The AfDB announced in June it will deploy several financial instruments to nurture flows of green finance in Africa by reducing investment risk. These instruments include credit guarantees, loans and technical assistance (a non-lending activity that consists of advisory services).
Impact Fund Launched to Accelerate Regenerative Agriculture Transition
Unilever, asset manager AXA and alternative investment manager Tikehau Capital jointly launched a private equity impact fund to invest in companies and projects involved in regenerative agriculture transition. The fund (with a target size of 1 billion euro) will focus on three core areas: protecting soil health, nurturing the supply of regenerative ingredients to meet demand for sustainable products and helping unlock technological solutions that aim to accelerate the transition to regenerative agriculture.
Large Project Finance for Permanence (PFP) Initiative Agreement in Colombia
A joint declaration from community, public and private sector partners secured nearly US$250 million for conservation in Colombia through a PFP initiative. More than 25 partners are involved, including Bezos Earth Fund, Conservation International, the Food and Agriculture Organization of the United Nations, World Bank and World Wildlife Fund. A PFP binds necessary policy changes and funding in a single agreement, and may involve community engagement, sustainable finance mechanisms (the ways in which money is received) and capacity-building of local and national organizations.
PFP Initiative Under Discussion for the Northwest Territories in Canada
Another PFP model is being explored for Canada’s Northwest Territories. Designed to connect a community’s economic growth with environmental protection, discussions included regional and local governments, as well as the Pew Charitable Trusts, which represented donors interested in financing indigenous-led conservation. More details are expected later this year.
Reports
Debt for Land Restoration Swaps Paper are Explored by UNCCD
Debt-for-Nature (DFN) swaps involve debt forgiveness for a low- or middle-income country by a wealthier nation in exchange for beneficial environmental outcomes (such as safeguarding marine areas rich in biodiversity). This UN Convention to Combat Desertification (UNCCD) report explores renewed interest in DFN swaps in recent years, different types of swaps, and advantages and challenges in setting up a DFN swap.
Nature-Based Solutions (NBS): A review of Current Financing Barriers and How to Overcome
Interviewees in the NBS finance community ranked what they viewed as the most important barriers to attracting funding. The report provides a detailed analysis of each barrier, including perspectives from different professionals. Insights are based on interviews with mainstream financial institutions (e.g., commercial banks and asset managers), impact investment funds (e.g., specialized venture capital firms) and NBS-focused financiers (e.g., development agencies).
NBS and Financing Mechanisms in Latin America and the Caribbean
In an issue brief, the Inter-American Development Bank and World Resources Institute reviewed five NBS financing strategies and six case studies where NBS projects unlocked private capital or accessed capital markets are reviewed in this issue brief from .
From Ozone to Oxygen: Opportunities and Risks in Natural Capital
This UBS whitepaper explores the need for systems thinking approaches when addressing natural capital. The authors also consider how public, corporate and private capital could best drive the regeneration of natural capital through policy change and investment frameworks to address opportunities and risks.
We hope you’ve found this newsletter helpful, and welcome your feedback.
We invite you to share insightful reports and news developments as you come across them. Please reach out to dhecht@ecoagriculture.org
