How finance can contribute to sustainable landscapes
Mainstream economic actors do not sufficiently recognize the interdependency of financial capital and the underlying social and natural capitals. But the tide is turning. On September 19, IUCN NL convened over 100 people to bridge the gap between natural and financial capital. Using insights from the past five years of IUCN NL’s work towards a more sustainable financial system, an updated strategy was launched that will help catalyse this transition.
Hosted by EY in Amsterdam, representatives from the financial sector, business, the public sector, NGOs, academia, and others came together to learn from experts and to contribute to specific sustainable finance projects. Eight entrepreneurs pitched their sustainable business.
The interdependency of financial capital and natural capital
Investments in sustainable landscapes are slowly being scaled up. Select financial institutions managing trillions of dollars are starting to align their portfolios with the Sustainble Development Goals. Other investors are beginning to realize that their returns will be undermined by disruption resulting from climate change and depletion of natural resources. Yet the connection with - and actual reallocation of finance towards - developments on the ground continue to be challenging. There is a disconnect between investors and the entrepreneurs and organisations leading projects for sustainable development.
"IUCN NL is committed to play a meaningful role to bridge the gap between providers of natural and financial capital", says Jan Willem den Besten, Senior Expert Green Finance at IUCN NL. This type of bridge-building is much needed, according to keynote speaker Carlos de Bourbon de Parme: "We need to get people to work together in unusual coalitions. Nature is not a place to visit, it is our home. We need to take care of our home."
To ensure investments yield a return on - and for - nature, IUCN NL has developed a sustainable finance strategy. The overarching objective of this strategy is to achieve zero or net-positive impact at the landscape level to restore and protect important ecosystems. The strategy is informed by the lessons learned from the past five years in which IUCN NL pioneered green investments, and was presented in the booklet 'Bridging financial and natural capital'.
Develop, engage, inform for sustainable investment
The sustainable finance strategy has two key pillars. First, it focuses on developing investible sustainable initiatives with entrepreneurs in key landscapes to activate investments with a net-positive impact. Remco Bleijs (EY) recognizes the high demand for investible projects. "There is plenty of investment money available but the business case needs to go beyond a good idea. It needs to be structured well to generate interest from investors."
Second, IUCN focuses on engaging with financial institutions to improve their impact on nature - to make them aware of the negative impact of their investments and to help them raise the bar with more ambitious targets and more stringent standards.
Through synthesis of experiences and best practices from the sustainable finance work, IUCN NL also actively informs the development of (inter)national tools and policies. At the event, IUCN NL launched a report which details this strategy and highlights specific cases from the past five years.
Boosting investible landscape ventures
Since 2012, IUCN NL has built a pipeline of investible landscape ventures through the Mobilising More for Climate initiative. This initiative brings together entrepreneurs, policymakers and investors to make business propositions possible that tackle the impacts and causes of climate change in developing countries.
Each year, entrepreneurs pitch sustainable business cases to a jury of financial experts. The semi-finalists are rewarded business skill support; the winner also receives seed funding.
At the September 2018 event, participants brainstormed with the entrepreneurs and the jury selected six finalists for the 2018 cycle from eight semi-finalists. The winner will be selected on October 31, when the finalists deliver their final pitch at the GIIN conference in Paris.