What We’re Reading – Landscape Finance Edition – Summer 2023

by | June 23, 2023 | 1000L News, Finance and Economics, Finance Team Newsletter, Landscape Partnerships, Landscape Restoration and Management

Innovations continue to emerge in landscape finance, systems change, and the many related fields of place-based investment. Together with co-convener EcoAgriculture Partners, the 1000L Finance Solutions team is working to reimagine ways to fund landscape-level change. In this vein, we believe staying well-informed about the latest innovations and actors operating in this constantly evolving space is essential.  

These are the landscape finance-relevant developments, reports, and resources that caught our eye over the last few months. Think we missed something? Let us know, and reach out to jramos@ecoagriculture.org.

News & Developments

New Dialogue Series Focuses on Groundbreaking Finance Advances for Landscapes
As part of our shared mission to advance landscape initiatives through public- and private-sector funding, 1000 Landscapes for 1 Billion People (1000L) and 30 of its partners are focused on addressing a key challenge – how to mobilize finance towards thriving landscapes that can help drive large-scale transformations. To tackle these systemic issues, 1000L and the Laudes and IKEA foundations produced a three-part dialogue series, Accelerating Finance for Thriving Landscapes. These events brought together landscape partnerships and financial leaders with expertise or interest in contributing to advancing funding for integrated landscape initiatives. Explore the outcomes of each dialogue and access the recordings here

Ecuador Completes Largest Debt-for-Nature Conversion in the World
In April 2023, with technical and financial support from the Pew Bertarelli Ocean Legacy Project and other partners, Ecuador converted $1.6 billion in existing commercial debt into a $656 million loan financed through a bond issued by Credit Suisse. The new arrangement, documented by the Pew Bertarelli Ocean Legacy Project, will save the country over $1 billion in total borrowing costs. These costs include forgiven debt and will generate conservation resources worth more than $450 million for the Galápagos Islands over the next 20 years, with dedicated financial resources for conservation provided in perpetuity. This long-term funding commitment by Ecuador includes building an endowment that will pay for conservation activities in the future. The Inter-American Development Bank and the US Development Finance Corporation (DFC) support made the operation possible. 

A Groundbreaking Investment Model for Sustainable Landscapes Gains Momentum in Southern Ontario, Canada
The Long Point’s Conservation Impact Bond (CIB), facilitated by Carolinian Canada, has proven successful as a pay-for-success model. This unique approach combines private, public, and community financing. As of April 2023, the CIB supports 54 projects dedicated to stewarding a healthy landscape in the Carolinian Zone. At its heart is a collaborative effort, bringing together leaders and change-makers from various sectors, including Indigenous communities, habitat organizations, academia, and impact finance. Together, they are promoting landscape-scale regeneration by defining and funding their landscape investment portfolio.

World Resources Institute’s (WRI) ‘Restore Local’ Program Awarded 100 M USD from the Audacious Project Over Four Years
Restore Local is a WRI-led project under the African Forest Landscape Restoration Initiative (AFR100), a continent-wide partnership to restore 100 million hectares of land by 2030. The four-year funding will accelerate locally led land restoration in three African landscapes: the Lake Kivu & Rusizi River Basin area, the Cocoa Belt of Ghana, and the Great Rift Valley of Kenya. 

International Finance Corporations’ (IFC) Integrates Biodiversity Finance Reference Guide into its Green Bonds Framework
IFC-issued green bonds can now finance IFC investments to generate biodiversity co-benefits. These investments focus on addressing the primary causes of biodiversity loss in economic activities, promoting biodiversity conservation and restoration, and incorporating nature-based solutions into major infrastructure projects. Additionally, the updated green bond framework of the IFC includes its Guidelines for Blue Finance, ensuring a comprehensive approach to sustainable financing.

The Global Innovation Lab for Climate Finance announces its 2023 Cohort of Solutions
The Lab is an investor-led initiative that identifies, develops, and launches promising solutions to drive critical public and private investment in climate change in developing economies. Each year, the Lab competition selects promising, early-stage ideas for sustainable investment and rapidly develops these ideas into fundable, scalable investment vehicles and business models. This year’s cohort included a Climate Resilient Landscape Finance (CRLF) model where financiers, conservancy management, and landowners collectively share the risks and rewards of sustainable land management activities. The proponent is Platcorp, an established microlender and asset manager in Eastern and Southern Africa.

Coalition for Private Investment in Conservation (CPIC) Blog: Key Takeaways from the Panel Discussion: ‘Capital flows in Conservation Finance: the Impacts of the Global Biodiversity Framework
The January 2023 CPIC Semi-Annual meeting gathered leading conservation finance experts to address these questions. The meeting included an update on CPIC’s activities, a panel discussion on the GBF, and four interactive breakout sessions on biodiversity credits, investing in early-stage nature ventures, technology for metrics, and key outcomes of COP 15 and COP 27 for conservation finance. 

Reports and Papers

Position Paper Published by the Swiss State Secretariat for Economic Affairs (SECO) Highlights Jurisdictional Approaches and their Strategy for Funding the Facilitation of Landscape Approaches
This position paper aims to establish a common understanding of the sustainable landscape approach among SECO and its partners. It recognizes that this approach is adaptable and highlights the significance of stakeholder collaboration in the landscape. SECO, which has recently announced its support for implementing a jurisdictional approach to land management in 10 districts of Indonesia, acknowledges the role of donors in facilitating the development of processes and structures to foster stakeholder collaboration. The paper is a living document that can be updated based on acquired knowledge and insights.

A report by TNC, IUCN WCPA, and Equilibrium Research Endorses Landscape Approach to achieve the Global Biodiversity Framework’s (GBF) 30×30 target
This report identifies the most effective options for delivery of a target of achieving 30% of the land, inland water, and ocean in protected areas and other effective area-based conservation measures by 2030 (‘30×30’), as set out in Target 3 of the GBF  from the Convention on Biological Diversity (CBD). The guidance released three critical elements for spatial action for nature – This means that the WCPA endorses three types of spatial action for nature – (1) protected areas, (2) other effective conservation measures, and (3) the landscape approach.

Nature Article Explores ‘Incentives and Barriers to Private Finance for Forest and Landscape Restoration
The article examines the perspectives of private financial actors and restoration finance experts on funding potential and barriers in restoration efforts. It aims to understand the reasons behind the gap between restoration finance goals and actual outcomes, focusing on specific projects and geographic areas that attract private finance. The study also examines barriers and strategies to scale up restoration finance, with particular attention to asset managers and corporations as influential private funders.

The ‘Biodiversity Finance Factbook’ by BloombergNEF Highlights Series of Biodiversity Finance Flows from Multiple Sources
The factbook also explores how green financial products such as green bonds, carbon credits, and offsets are deployed to address key drivers of biodiversity loss. Finally, the paper provides a framework to identify investment priorities based on identifying locations where biodiversity is plentiful, providing value, and at risk.

Developing Blended Finance Capacity for Nature on a National Level: a Report From the COP 15 Interface Dialogue Finance & Biodiversity (IDFB)
This document, commissioned by the Dutch Ministry of Agriculture, Nature and Food Quality (LNV) as part of the IDFB, proposes that mobilizing private finance through blended finance requires context-specific solutions. The paper explores how (international) development finance can support blended finance transactions in developing countries. The paper suggests creating specialized vehicles and facilities for targeted countries, regions, or ecosystems. It outlines the challenges, requirements, and potential solutions for blended domestic finance for biodiversity. 

The GEF Releases Report, “Innovative Finance for Nature and People: Opportunities and Challenges for Biodiversity-Positive Carbon Credits and Nature Certificates.”
The report focuses on two emerging financial instruments promoting biodiversity conservation, sustainable use, and restoration while considering social equity. These instruments are biodiversity-positive carbon credits and nature certificates. The report highlights their potential to address a significant shortcoming of current carbon finance. It fails to incentivize effectively and direct private finance toward preserving intact critical forest ecosystems or High-Forest Low-Deforestation areas. These areas, maintained due to effective government policies, often do not qualify for carbon finance as they are perceived to be less threatened and lack the necessary conditions for selling carbon credits. The report cites Gabon’s success in forest conservation as a prime example of this issue.

Resources

As part of the 1000L and the Laudes and IKEA Foundations’ dialogue series, Accelerating Finance for Thriving Landscapes, we supported the development of the following resources: 

  • As part of dialogue one, 12 landscape partnerships developed  landscape finance profiles sharing their current funding needs through investment portfolios and lessons learned in the process. 
  • As part of dialogue two, finance developers and landscape partnerships worldwide created eight landscape finance mechanisms, profiling a series of mechanisms that illustrate the diversity of approaches and their lessons learned for channeling funding to landscapes. 

The Partnerships for Forests initiative shares a Funds for Nature Investment Database
Funds for Nature is a collaborative and accessible database of funds and asset managers with a mandate to invest in nature-based businesses. It covers the forest and land use, food and agriculture, and ocean and aquaculture sectors.

Sitawi Finance for Good has launched a map of financial solutions for nature conservation (in Portugues), the first material of this content in Brazil.
The material was built based on the international literature on conservation finance, seeking to present some possible paths for organizations that wish to finance nature conservation in Brazil but need to know where to start.

We hope you’ve found this newsletter helpful, and we highly value your thoughts and feedback. 

If you have any insightful reports or exciting news from your organization or initiative that you’d like to share and showcase, we’re all ears! Please don’t hesitate to get in touch with us at: jramos@ecoagriculture.org

 

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