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Investing in conservation with a purpose


Conservation is literally time consuming effort taking into account years of individual and groups’ effort at regaining ground on ecosystem restoration, and for this, financial backup is of utmost need for field-based activism and to sustain the effort.

By Salam Rajesh

Financing in conservation by private players with certain returns for the investors is the latest trend in global scenario, reads the report of the Coalition for Private Investment in Conservation (CPIC). The CPIC is a global multi-stakeholder initiative focused on enabling conditions that support a material increase in private, return-seeking investment in conservation.

The CPIC report, captioned as ‘Conservation Finance 2021: An Unfolding Opportunity’ strikes the key note with this analysis: ‘Return-seeking investments in conservation are increasing, driven mostly by greater investor awareness of the opportunities of the market, and an increasing number of professionals with relevant skillsacross the conservation and finance sectors’.

The reading is quite straight forward in the sense that to achieve wholesome success in conservation of forests and other natural landscapes, there has to be a certain level of profit margin for investors in the long term, neither negative in perspective or outlook. For somebody willing to invest in nature conservation, his interest would be sustained if he is also getting something in return for his investment, whether in cash or in kind.

The concept is not about commercializing initiatives in conservation whereas it is about financial sustainability of those who wish to invest handsomely for the protection and conservation of nature and the wildlife in long term measure.

The conservation finance report looks at how the primary revenue sources for conservation investments are ‘sustainable commodities (55%) and environmental markets including carbon and biodiversity credits (31%)’. At the same time, ‘supply chain-driven investments in nature are expected to increase significantly over the coming decade, with a growing number of corporate funds for nature from the investing companies’.

Martin Stadelmann, Director of Climate Investments at South Pole has this to reflect on the nuances of conservation finance, “The conservation finance sector still lacks multi-year, in-depth data specifically on private, return-seeking investments in nature. With better insights into the opportunities of the market, return-seeking investors can explore new, innovative instruments and revenue streams to complement the conservation activities that have primarily relied on the limited, grant-based public and philanthropic funding in the past”.

 Conservation is literally time consuming effort taking into account years of individual and groups’ effort at regaining ground on ecosystem restoration, and for this, financial backup is of utmost need for field-based activism and to sustain the effort.

With climate urgency in the forefront of global deliberations and the need to recover fast on greening the earth to avoid climate catastrophe in the immediate future, financers have to come forward to invest in nature conservation in the correct perspective and not indulging in extractive industries that largely destroy the natural landscapes.

John Tobin, Professor of Practice at Cornell University, further explains conservation finance as: “The majority of conservation finance investments are currently made through a narrow set of investment vehicles. Raising awareness of the other available conservation assets could drive down the cost of financing conservation. The (CPIC) report shows that environmental markets have great potential for scaling investments in biodiversity conservation, but also that they need to develop further if they are to become mature markets for mainstream investors”.

The technical aspect of investing in conservation is critical in the sense that wrong motives can be disastrous for meaningful conservation of biodiversity-rich landscapes. The interpretation of companies seeking inroad into nature reserves largely for commercial benefits only have negative impacts on the landscapes, leaving pristine forests bare and scrapped to the core, exposing the surface soil to rot and turn into conditions of semi or full scale desertification.

The CPIC report while referring to debates on biological diversity conservation as promoted by the Convention on Biological Diversity (CBD), reflects that the urgency to act for nature has been translated by governments into global targets to safeguard biodiversity, with nearly 200 countries agreeing on the official ‘Aichi Biodiversity Targets’ in 2010 that talks on preventing species loss to improving the ability of habitats to sequester carbon.

Yet, the report forewarns that more than a decade after the Aichi Targets were agreed, the international community has failed to achieve most of the targets set to be achieved by the year 2020. This, as the report points out, is in part because ‘public financial flows do not meet the current investment need for financing necessary conservation efforts, and continue to be dwarfed by harmful subsidies’.

Going into the literature statistics, the report points out that the comprehensive overview of the overall volume of conservation finance indicates that the investment is around 133 billionUS dollars, as was reported by the United Nations Environment Programme in 2021. The report further points out that the majority of these investments, ranging from 80 to 86 percent come from the public sector alone.

The CPIC conducted a random assessment of different respondents across sections of society to understand the level of investments in the conservation sector. The assessment revealed that of the investors and organizations that invest in and develop projects, ‘institutional investors or asset managers with institutional clientsrepresent the largest category of investors, accounting for 23 percent’.

The other investing sectors included private project developers at 15 percent, non-governmental organizations at 15 percent, family office or high net-worth individuals at 8 percent, public entities at 8 percent, foundations or endowments at 4 percent, and others at 19 percent.

The figures indicate the entry of wealthy individuals and professional groups in the private sector indulging in certain level of conservation with profit-return in their target range. There are also examples of individuals even in India who invest in re-greening barren forests in their own individual capacities.

The investment priorities are again in various aspects. For instance, an individual like Moirangthem Loiya in Manipur invests his time and energy in conservation for returns not individual but collective for humanity. Non-governmental organizations like the Sanctuary Foundation and the World Wildlife Fund could be investing in nature conservation for long term gains in forest and wildlife population regeneration, and as contribution towards climate change mitigation.

The induction of ecologically-friendly low scale tourism in nature landscapes can be part of the field-based strategy for professional and grassroots organizations with the objective of enabling livelihood options for indigenous peoples and local communities who thrive within and nearby the forests, wetlands and other natural landscapes.

The CPIC conservation finance report details that the current most investments towards financing conservation occur in Asia, Europe and North America. The report further provides that ‘only 1 percent of investments are from organizations based in Latin America and Oceania, and most investments are directed toward Africa (at 26 percent), Asia (24 percent), Oceania (17 percent), and Latin America, and that only 11 percent of the investments target Europe, the United States and Canada’.

(The writer is a media professional working on environmental issues. He can be contacted at [email protected])

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