While there is not a lack of capital seeking nature-based investments, there is a lack of projects that have reached a stage of being able to attract investment or finance. There is a need for early-stage funding to support demonstrators to reach investment readiness and to help with the development of new products and markets.
Financial institutions can support this development and their own investment pipeline by acting as a source of accelerator funding or using corporate social responsibility budgets for technical assistance as part of research and development. If creatively implemented, such inhouse accelerators can also positively engage employees on the topic of biodiversity and finance.
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RECOMMENDATION IN PRACTICE:
Morgan Stanley's Sustainable Investing Challenge
Morgan Stanley in partnership with the Kellogg Foundation, hosts an annual Sustainable Investing Challenge where it invites teams of graduate students from around the world to develop and pitch creative financial approaches to tackle pressing social and environmental challenges.
Among the winners that have gone on to provide innovative NbS financing solutions are Blue Forest Conservation’s Forest Resilience Bond – a five-year $4 million bond aimed at warding off drought and fire in 15,000 acres of the Yuba River Watershed in northern California.
This year’s winner was BeeBank & Brokerage with a proposal to pool loans and contract assurance to help beekeepers scale operations and expand practices that drive biodiversity conservation.
JPMorgan and NatureVest
JPMorgan sponsors The Nature Conservancy’s NatureVest that sources and structures nature investment projects – to date representing more than $1.3 billion of committed capital.
Among NatureVest’s deals is an impact investment to protect 253,000 acres, the eastern United States- the Cumberland Forest Project, and the Seychelles debt-for-nature conversion.
YES BANK's Natural Capital Awards
YES BANK in India, through its Corporate Social Responsibility funds, has undertaken focused efforts to ensure conservation of biodiversity and endangered species, while mitigating the factors affecting them.
In addition to funding biodiversity conservation programmes, YES BANK institutionalised Natural Capital Awards to facilitate, reward and share best practices in natural capital measurement and accounting in India.