Climate Finance | September 8, 2021

Scaling nature investments to meet investor demand

Dennis Price
ImpactAlpha Editor

Dennis Price

ImpactAlpha, Sept. 8 – Conservation funds from Apple and L’Oréal launched in the last year will invest hundreds of millions in land and water ecosystems to sequester tens of millions of tons of carbon dioxide. The corporate commitments are a signal of interest in conservation finance.

Seven in 10 conservation investors are planning to make “substantially higher” investments this year, according to the Coalition for Private Investment in Conservation, led by South Pole, the Cornell Atkinson Center for Sustainability, and the International Union for Conservation of Nature.

“There is growing interest from policymakers and investors to invest in nature,” says IUCN’s Elmedina Krilasevic. “Now is the time to power the nature investment revolution.”

  • Broadening the market. Nearly all (99.7%) conservation investments last year originated from just seven countries: Australia, Germany, the Netherlands, South Korea, Switzerland, United Kingdom, and the U.S. Most (91%) were concentrated in private debt and equity, as well as real assets. The researchers say scaling conservation finance requires more publicly-traded conservation assets, and more opportunities in China, Japan and Latin America.
  • Risk management. Developers can better use structures that streamline the risk factors of conservation projects, says NatureVest’s Charlotte Kaiser. Investors who can handle uncertainty “are much better equipped to commit to transactions that truly make a difference for conservation, rather than avoiding risks and allowing the untenable status quo to continue.”