A new initiative, called the Coalition for Private Investment in Conservation (CPIC), was launched during the IUCN World Conservation Congress currently being held in Hawaii.
Anchored by four founding members, including Credit Suisse, The Nature Conservancy (TNC), the International Union for Conservation in Nature (IUCN), and Cornell University, the coalition is designed to create new investment models for return-driven private investment in the sectors of sustainable agriculture, forest restoration, sustainable coastal fisheries, and watershed management. By doing so, it hopes to address the gap in annual funding for conservation estimated to be between $200 million and $300 million.
Focusing on its key sectors, the coalition plans to act as a hub that will connect investors and financial institutions with domestic partners that can work to frame and execute deals that will generate financial returns as well as environmental benefit.
“We are at a critical turning point in history, where all stakeholders are increasingly aware of the urgency of sustaining nature for the benefit of all,” says IUCN Director General Inger Andersen. “Public sector finance and philanthropic capital alone is not sufficient to meet these challenges. This new Coalition will serve as a critical platform to share expertise, stimulate innovation, and help scale up sustainable investment models, and raise awareness of the potential importance of private capital to conservation.”
The new report, Conservation finance from niche to mainstream: The building of an institutional asset class, identifies conservation investment–or investment vehicles that combine real assets such as land or forests with actionable operations such as sustainable agriculture, timber management, or eco-tourism–as a massive and critical but underdeveloped investment class.
“In the current environment, investors are looking for an edge to drive excess returns. Increasingly, they are seeing conservation impact investing as a way to achieve substantial environmental and social impact alongside market-rate financial returns,” said Tidjane Thaim, chief executive officer, Credit Suisse.
“The growth of the conservation finance market is opening the way for banks to pool risk across geographies and asset types, which corresponds neatly with our core expertise of aligning capital with attractive and sustainable investment opportunities,” said Thaim. “We believe that if we can change how people look at risk and return and impact to incorporate nature as a core part of the long-term strategy for a successful investment portfolio, this will move the needle.”
Indeed, ‘moving the needle’ will necessitate conservation-minded ventures shifting its collaborative goals from donor-driven and public scale structures to large-scale institutional and market driven deals.
Lynn Scarlett, managing director of public policy for The Nature Conservancy states, “At the Conservancy, we have already facilitated six impact investment deals totaling $200 million dollars in marine conservation and agriculture, and this new coalition should help us bridge our largest challenge, which is a lack of investment projects in the pipeline. We’ll know we’ve reached success when the big banks have enough projects as options that they can pick and choose where conservation investment will have the most significant impact.”
Conservation finance from niche to mainstream: The building of an institutional asset class asks the question, “Can nature pay for itself?” The coalition believes it can, while also generating profits.
“The continuing disappearance of Earth’s last healthy ecosystems is sadly no longer news,” says Thaim. “What is news is that saving these ecosystems is not only affordable but profitable. Nature must not be turned into a commodity, but rather into an asset treasured by the mainstream investment market.”
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Lynda Kiernan
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