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Response to "Making Conservation Finance Investable"

The government plays an important role in creating an environment that is conducive to conservation financing.

The article by Fabian Huwyler, Juerg Kaeppeli, Katharina Serafimova, Eric Swanson, and John Tobin is a sign of, and a useful addition to, the movement to use a constructive cocktail of policy and investment to catalyze growing pools of capital for conservation.

At Imprint Capital, we work with large foundations and families working to build impact portfolios and financial institutions working to support such clients. We see many of the same dynamics outlined in the article. Specifically:

Show me the money. We would echo the need for underlying cash flows. The report highlights one pathway—strong, conservation-minded ownership, plus targeted sustainable revenue lines (e.g. ecotourism), plus help from policy driven payments-for-ecosystem-services. What is also needed is an exploration of the different dynamics of having strong economics for core ecosystem management (e.g. sustainable forestry where we find ourselves co-investing with commercial investors) as opposed to more “layered” revenue streams. This was a significant part of the last Conservation Working Group meeting, which explored investment theses developing around emerging REDD (Reducing Emissions from Deforestation and Forest Degradation) and other deforestation-oriented strategies.

It takes two to tango. Government can do more than subsidize. Government policy, ranging from direct regulation to softer mechanisms, such as helping to drive consumer demand towards more sustainable products, can change investment economics without the government having to write a check.

Parsing investor preferences. Capital preservation (risk) is more central for some investors than is the anticipated rate of return. Less discussed is liquidity, a particular challenge given the long-term nature of most conservation assets. Impact product design efforts should try to learn lessons from the success of impact notes programs (one to three-year secure debt instruments with low yields) from groups such as the Calvert Foundation, The Nature Conservancy, and others.

Role of environmental NGOs. The collaboration between sectors that is at the heart of the article is evidence of the significant roles high-capacity environmental NGOs can play. We might not be as quick as the authors, however, to suggest that NGOs ought not to create investment products. Their expertise, networks, and strong balance sheets make them intriguing actors in this puzzle—how to mobilize capital for real conservation results—that many of us are working to solve.

Read the rest of the responses.

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  • James Cook's avatar

    BY James Cook

    ON April 23, 2014 09:51 PM

    How is Melissa Bos connected to theft of conservation funds under conservation international?

  • Joann Trennis's avatar

    BY Joann Trennis

    ON April 23, 2014 10:06 PM

    It is understood that Melissa Bos illegally misallocated funds for conservation projects in Hawaii for her own personal use, including fraud, including employing and coercing staff to perform babysitting for her children as well as housekeeping, while paying them a salary from project funds. Employees spoke up and revealed this behavior. Melissa Bos and conservation international then made an agreement that she would quietly step away from her lucrative program in exchange for them not pressing criminal charges. Immediately after Melissa Bos received her bonus, or keep quite money, she escaped to Australia leaving behind a tarnished reputation, and valudated mistrust. She violated the trust of the a Hawaiian people, for money. Where did all the conservation money go? There was something like $10 million us dollars involved. Why do we spend money on conservation finance projects when corruption within the conservation finance community like that of Melissa Bos is so rank!

  • Joshua K.'s avatar

    BY Joshua K.

    ON April 23, 2014 10:18 PM

    Please, don’t let Melissa Bos involvement in finance fraud tarnish the respected work and characters of the likes of Joe Whitworth and Susan Silver. Sometimes people like Melissa Bos do awful terrible and selfish things that have impacts on those whose motives are honest and heartfelt. I can assure you that Melissa Bos and her involvement with conservation international and her global fish trust strategy in Hawaii it’ll finance of conservation systems is an isolated incedent. Please, know the facts as it pertains to her and conservation international internal workings, and don’t punish the community. I call for more transparency of organizations that harbor these individuals, as these organizations have tremendous resources and financial clout. Thank you,
    Joshua K.

  • Joshua K.'s avatar

    BY Joshua K.

    ON April 23, 2014 10:27 PM

    Ricardo, what exactly did Melissa Bos do, and what can it tell us about the complexities of financial system influence on resource management? Specifically, are there sufficient safeguards in place to protect the interests of stakeholders from corporate conservation and financial interests if those who so cheaply buy there way through the proverbial back door?

  • Jeff Hamaoui's avatar

    BY Jeff Hamaoui

    ON July 24, 2014 11:49 AM

    Making Conservation Finance Investable

    If corruption of an individual in a specific financial institution was just cause not to do finance we would have to shut down every single financial institution in the US - probably in the world. 

    Focusing on the role of conservation finance in an age of ever decreasing environmental assets is the critical issue here.  The authors have done a terrific job in beginning to compile a conservation finance playbook for exploration in this area…

    What matters from here is how we create the tools and market processes to meaningfully connect the environment into the marketplace.  Building on that idea - I have been recently been inspired by some work done by Alex Dehgan at Duke who has posited that ‘conservation’ will need to shift towards the nexus between new technology innovation, entrepreneurship and finance innovation…

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