IUCN event | 19 Sep, 2022

Scaling Finance for Nature: Forging Philanthropy-Finance-Government Partnerships

Given the presence in New York of multiple world leaders for the UN General Assembly, and considering the role of New York as a leading international financial centre, there is an excellent opportunity to advance the dialogue on a robust global biodiversity resource mobilization framework, and to strengthen/build partnership among governments, financial institutions, private financiers, and philanthropists aimed at significantly scaling up investments in nature and biodiversity.

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Photo: Jermaine Ee / Unsplash

Background

The negotiations of the post-2020 global biodiversity framework are entering their final, critical phase prior to the expected adoption of that framework at the 15th Conference of the Parties to the Convention on Biological Diversity in December in Montreal, Canada. One of the most important unresolved issues is how to concretize a robust resource mobilization framework to address the sizeable estimated financing needs to achieve the ambitious targets under discussion – not least the 30 by 30 global target. The financing gap has been estimated in the hundreds of billions of dollars. Whatever the precise amount, it is evident that public finances will not suffice to close the gap and that sizeable resource mobilization from the private and philanthropic sectors will be critical to success.

Given the presence in New York of both multiple world leaders and the IUCN Patrons of Nature, and considering also the role of New York as a leading international financial centre, there is an excellent opportunity to advance the dialogue on a robust global biodiversity resource mobilization framework, and to strengthen/build partnership among governments, international financial institutions, private financiers, and philanthropists aimed at significantly scaling up investments in nature and biodiversity. A particular focus of the discussions will be how to tap the enormous pools of capital managed by hedge funds, pension funds, sovereign wealth funds and other institutional investors. Studies have made clear that the required scale of financing is well beyond what governments are willing and able to provide. Yet, to unlock private biodiversity investment at scale will require addressing major constraints and obstacles, including building the pipeline of bankable projects and developing innovations to package, de-risk and ensure sufficient liquidity of nature-related investments to make them attractive to investors.

Thanks to the work of scientists and economists (including IUCN, IPBES, the Dasgupta Review, and others), there is a growing realization in financial circles that nature is a valuable asset. Work is ongoing, for instance, to define and develop natural capital as an investable asset class. There have also been a number of issuances of ‘green’ and ‘blue’ bonds by financial institutions and by governments.

The reality remains, however, that the amount of ‘nature-linked’ equity and debt investment globally is miniscule, far below what will be needed to tackle biodiversity loss and ecosystem restoration. Thus far, there are only a handful of nature-related investment funds and experimental transactions (climate-related transactions are somewhat more mature), which have taken years to develop, largely through collaborative effort of investors, NGOs and development finance institutions. Small though they may be, these initiatives can offer valuable lessons and potentially pave the way to further market development and deepening.

The Event

This event, co-organized by the International Union for Conservation of Nature (IUCN) and the Coalition for Private Investment in Conservation (CPIC), aims to (i) take stock of the state of practice globally regarding private financial sector engagement in nature financing, including through various collaborative partnerships, and (ii) focus in some depth on a few of the more mature and successful initiatives with a view to drawing lessons for future scale-up of such nature-related finance.

The event is designed to bring together four sets of actors – government leaders, philanthropists, multilateral development bank senior decision makers, and private financiers, to discuss how they can forge fruitful alliances to scale investments in nature-based solutions, including those aimed at tackling climate change while conserving and sustainably using biodiversity.

These actors have distinct and mostly complementary roles to play in partnering on nature-positive investment scale-up. Governments have the incentive to promote such investments, insofar as they are the legal entities bound by international treaty agreements like the Convention on Biological Diversity. They control public finances, which can be used strategically to leverage private investment. To varying degrees and at varying costs they have access to sovereign debt markets, where they may decide to issue ‘nature’ bonds. Multilateral development banks can also raise capital through international markets on favourable terms, which can lower capital costs to sovereigns with access to their financing. Both these sources of capital can, through various ‘blended finance’ arrangements, leverage private investment, improving the risk-return profile for the latter. Finally, while philanthropies generally command smaller amounts of capital, they can direct their investments strategically to support early-stage, proof-of-concept, high-risk projects which private investors would mostly shun.

A keynote address, responses and a set of panel presentations will deepen discussion of specific financing instruments and initiatives (with a particular focus on blue economy and oceans), problems encountered along the way, solutions found, results achieved, and challenges of scaling up and replication.

The Agenda

Welcome remarks

  • Vivek Bapat, Senior Vice President, Purpose and Sustainability Marketing and Solutions at SAP
  • HE Razan Al Mubarak, IUCN President

Keynote address: Scaling finance for nature

  • Wilson Ervin, Former Vice President, Credit Suisse [presented by John Tobin-de la Puente, Vice Chair, IUCN-US; Professor of Practice at Cornell University; co-founder of CPIC]

Responses

  • Jennifer Morris, CEO, The Nature Conservancy
  • Alvaro Lario, President, International Fund for Agricultural Development (IFAD)
  • HE Lee White, Minister of Water, Forests, Sea and Environment, Republic of Gabon
  • Sylvia Earle, National Geographic Explorer in Residence; Founder of Mission Blue; IUCN Patron of Nature

Panel Discussion on bundling, de-risking and scaling private conservation investment: opportunities for government, financial sector, philanthropies partnership

Moderator: Tracy Farrell, Director, North America Office, IUCN

  • Defining a new natural asset class: Erin Summe, Director, Global Business Development, Intrinsic Exchange Group
  • Pooling risk of nature-linked investments for institutional investors: Keith Tuffley, Vice Chairman, Global Co-Head Sustainability & Corporate Transitions, Citi
  • Mobilizing and deploying private finance for nature: Tanja Havemann, Co-Founder and Director, Clarmondial AG
  • Tapping the sovereign bond market for nature: blue bonds in Seychelles, Belize, Fiji: Slav Gatchev, Managing Director, Sustainable Debt, NatureVest at The Nature Conservancy
  • Creating a pipeline of bankable nature-based solutions: Martin Stadelmann, Executive Director, Climate Investments, South Pole, and CPIC
  • Catalytic ocean philanthropy: Hari Balasubramanian, Founding Managing Partner, EcoAdvisors

Questions and Answers

RSVP required to David O'Connor (see flyer above); once confirmed you should receive email with QR code from SAP, the hosts. Please remember to bring a government-issued picture ID to the event (passport, driver's license).