September 12 – We’ve all felt it. The summer of 2023 has been the hottest on record, bringing with it unprecedented extreme weather events. There is no denying the urgency of the climate crisis. Yet we overlook a solution readily at our disposal. Nature-based solutions (NbS) that protect, restore and sustainably manage forests and other ecosystems could provide 37% of cost-effective climate change mitigation efforts needed by 2030 to meet the Paris Agreement goals and stabilize warming to below 2 degrees Celsius.
The challenge is that despite increasing financial flows into nature, we still face a worrisome financing gap. An estimated $11 trillion is needed between 2022 and 2050 to meet ambitious climate change, biodiversity and land-degradation targets. That will require more than doubling current levels of global investment into NbS by 2025 and tripling them by 2030.
Here’s the good news: The NbS finance landscape is ripe with opportunities for collaboration to meet the critical need for investment in nature-based solutions. Innovative partnerships can help lower traditional barriers to greater NbS investment. These are among the findings of the inaugural annual report of the Forest Investor Club (FIC).
A man pours water on himself in Turin, Italy, August 25, 2023. This summer was the hottest on record. REUTERS/Massimo Pinca Acquire Licensing Rights
Formed by the U.S. Department of State in 2021, with the World Business Council for Sustainable Development (WBCSD) serving as its secretariat starting in late 2022, the FIC is working to accelerate the deployment of capital into the protection, restoration and sustainable management of forests and nature.
Two years on, we’re pleased to report that FIC members ¬– public and private financial institutions, companies, and other investors – have made significant strides in increasing flows of financing to NbS through innovative forms of investment and partnership.
The FIC’s strategy centers around fostering collaboration and partnerships and developing an investment pipeline to advance our mission to scale NbS investment. Further, we have adopted a set of investment principles that govern the impact and integrity of the types of strategies the FIC promotes. Among those principles is alignment of nature-based carbon strategies with leading voluntary carbon market (VCM) initiatives to ensure high-quality projects that meaningfully address climate and biodiversity goals while supporting local communities and Indigenous people.
Against the backdrop of developing the framework and strategy, FIC members are already developing and executing innovative investment strategies to drive capital into high-impact forestry and other NbS projects. As part of the annual report, FIC released five new case studies featuring investment strategies of its members across varied geographies, asset classes and risk-return profiles:
• Apple launched the Restore Fund with Goldman Sachs and Conservation International in 2021, committing up to an initial $200 million to restore degraded areas and invest in sustainable working forests, generating attractive returns while removing carbon. In 2023, Apple expanded the Restore Fund in partnership with Climate Asset Management through an additional commitment of up to $200 million, creating a novel blended strategy focused on nature-forward agriculture combined with the restoration of critical ecosystems.
• BTG Pactual Timberland Investment Group (TIG) as part of its impact-oriented Latin America reforestation investment strategy, aims to acquire and restore 300,000 hectares of degraded land, half of which it will reforest with native species and set aside for conservation. TIG aims to mobilize $1 billion over five years for the reforestation strategy and generate close to 35 million metric tons of carbon sequestration over 15 years, while reconnecting fragmented habitat through native landscape restoration.
• An impact-first investment program managed by the globally recognized non-profit Conservation International (CI), CI Ventures, combines 36 years of climate and conservation science to design, showcase and mainstream mechanisms to address the investment gap in biodiversity and climate concerns, while acting as a catalytic force to bring further funding to the space. Through its venture philanthropy model, CI Ventures has leveraged $19 million in risk-tolerant capital to attract and mobilize an additional $86 million in co-financing and follow-on investments.
A worker harvests baby kale grown in a vertical nutrient film system in the Sharjah desert, United Arab Emirates. REUTERS/Rula Rouhana Acquire Licensing Rights
• Lombard Odier Investment Managers (LOIM) recently partnered with the systems change firm Systemiq to build holistiQ Investment Partners, a sustainable investment platform within LOIM that aims to deploy capital for a net-zero and nature-positive economy. The New Food Systems strategy, launched by LOIM in July 2022 and now part of the holistiQ platform, seeks to invest in public equities that develop and mobilize new forms of healthy and sustainable protein, new agricultural practices and new delivery models as part of its objective to invest in a food system that can meet the nutritional needs of a growing population within the constraints of planetary boundaries.
• The Mirova Land Degradation Neutrality (LDN) fund, initiated by and copromoted with the U.N. Convention to Combat Desertification (UNCCD), provides long-term debt and equity financing to projects and companies in the agroforestry, forestry and regenerative agriculture sectors, as well as other land-based activities, that advance the U.N. Sustainable Development Goal (SDG) target of achieving land degradation-neutrality by 2030. Since its final closing in March 2021, the LDN Fund has secured $208 million in investment commitments from public and private sector partners.
As these case studies and other findings of the FIC report amply demonstrate, we need an “all hands” approach to meet ambitious goals for scaling NbS investments to address systemic global challenges. Natural capital underpins the health of communities, businesses and economies all over the world, and it is critical to grow the scale, increase the pace, and expand the geographic scope of investments that enhance it.
With this in mind, we welcome collaboration with other organizations, platforms and initiatives to achieve our collective goals. With strength in numbers and by sharing knowledge, resources and complementary expertise, the Forest Investor Club can stimulate new solutions and partnerships to unlock capital, originate deal flow and identify innovative approaches to protect, restore and sustainably manage forests and nature for generations to come.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Ethical Corporation Magazine, a part of Reuters Professional, is owned by Thomson Reuters and operates independently of Reuters News.
As Director, Land Use Finance, with the World Business Council for Sustainable Development, Ryan Whisnant works with financial institutions, investors, and companies to understand and disclose exposure to forest and land use-related emissions and nature risks and opportunities, align their portfolios with broader climate goals, and scale investments in nature-based solutions. He has more than 20 years of experience designing and leading initiatives in international conservation and corporate sustainable development focused on nature, climate, and energy.
Comment: Why partnerships are key to bridging the finance gap for nature-based solutions to climate change
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September 12 – We’ve all felt it. The summer of 2023 has been the hottest on record, bringing with it unprecedented extreme weather events. There is no denying the urgency of the climate crisis. Yet we overlook a solution readily at our disposal. Nature-based solutions (NbS) that protect, restore and sustainably manage forests and other ecosystems could provide 37% of cost-effective climate change mitigation efforts needed by 2030 to meet the Paris Agreement goals and stabilize warming to below 2 degrees Celsius.
Forests and other ecosystems provide immense value to the global economy, an estimated 55% of world GDP, and forests are home to roughly 80% of the world’s terrestrial biodiversity. NbS also represents a substantial market opportunity: $3.6 trillion annually in business opportunities and 191 million jobs by 2030.
The challenge is that despite increasing financial flows into nature, we still face a worrisome financing gap. An estimated $11 trillion is needed between 2022 and 2050 to meet ambitious climate change, biodiversity and land-degradation targets. That will require more than doubling current levels of global investment into NbS by 2025 and tripling them by 2030.
Here’s the good news: The NbS finance landscape is ripe with opportunities for collaboration to meet the critical need for investment in nature-based solutions. Innovative partnerships can help lower traditional barriers to greater NbS investment. These are among the findings of the inaugural annual report of the Forest Investor Club (FIC).
A man pours water on himself in Turin, Italy, August 25, 2023. This summer was the hottest on record. REUTERS/Massimo Pinca Acquire Licensing Rights
Formed by the U.S. Department of State in 2021, with the World Business Council for Sustainable Development (WBCSD) serving as its secretariat starting in late 2022, the FIC is working to accelerate the deployment of capital into the protection, restoration and sustainable management of forests and nature.
Two years on, we’re pleased to report that FIC members ¬– public and private financial institutions, companies, and other investors – have made significant strides in increasing flows of financing to NbS through innovative forms of investment and partnership.
The FIC’s strategy centers around fostering collaboration and partnerships and developing an investment pipeline to advance our mission to scale NbS investment. Further, we have adopted a set of investment principles that govern the impact and integrity of the types of strategies the FIC promotes. Among those principles is alignment of nature-based carbon strategies with leading voluntary carbon market (VCM) initiatives to ensure high-quality projects that meaningfully address climate and biodiversity goals while supporting local communities and Indigenous people.
Against the backdrop of developing the framework and strategy, FIC members are already developing and executing innovative investment strategies to drive capital into high-impact forestry and other NbS projects. As part of the annual report, FIC released five new case studies featuring investment strategies of its members across varied geographies, asset classes and risk-return profiles:
• Apple launched the Restore Fund with Goldman Sachs and Conservation International in 2021, committing up to an initial $200 million to restore degraded areas and invest in sustainable working forests, generating attractive returns while removing carbon. In 2023, Apple expanded the Restore Fund in partnership with Climate Asset Management through an additional commitment of up to $200 million, creating a novel blended strategy focused on nature-forward agriculture combined with the restoration of critical ecosystems.
• BTG Pactual Timberland Investment Group (TIG) as part of its impact-oriented Latin America reforestation investment strategy, aims to acquire and restore 300,000 hectares of degraded land, half of which it will reforest with native species and set aside for conservation. TIG aims to mobilize $1 billion over five years for the reforestation strategy and generate close to 35 million metric tons of carbon sequestration over 15 years, while reconnecting fragmented habitat through native landscape restoration.
• An impact-first investment program managed by the globally recognized non-profit Conservation International (CI), CI Ventures, combines 36 years of climate and conservation science to design, showcase and mainstream mechanisms to address the investment gap in biodiversity and climate concerns, while acting as a catalytic force to bring further funding to the space. Through its venture philanthropy model, CI Ventures has leveraged $19 million in risk-tolerant capital to attract and mobilize an additional $86 million in co-financing and follow-on investments.
A worker harvests baby kale grown in a vertical nutrient film system in the Sharjah desert, United Arab Emirates. REUTERS/Rula Rouhana Acquire Licensing Rights
• Lombard Odier Investment Managers (LOIM) recently partnered with the systems change firm Systemiq to build holistiQ Investment Partners, a sustainable investment platform within LOIM that aims to deploy capital for a net-zero and nature-positive economy. The New Food Systems strategy, launched by LOIM in July 2022 and now part of the holistiQ platform, seeks to invest in public equities that develop and mobilize new forms of healthy and sustainable protein, new agricultural practices and new delivery models as part of its objective to invest in a food system that can meet the nutritional needs of a growing population within the constraints of planetary boundaries.
• The Mirova Land Degradation Neutrality (LDN) fund, initiated by and copromoted with the U.N. Convention to Combat Desertification (UNCCD), provides long-term debt and equity financing to projects and companies in the agroforestry, forestry and regenerative agriculture sectors, as well as other land-based activities, that advance the U.N. Sustainable Development Goal (SDG) target of achieving land degradation-neutrality by 2030. Since its final closing in March 2021, the LDN Fund has secured $208 million in investment commitments from public and private sector partners.
As these case studies and other findings of the FIC report amply demonstrate, we need an “all hands” approach to meet ambitious goals for scaling NbS investments to address systemic global challenges. Natural capital underpins the health of communities, businesses and economies all over the world, and it is critical to grow the scale, increase the pace, and expand the geographic scope of investments that enhance it.
With this in mind, we welcome collaboration with other organizations, platforms and initiatives to achieve our collective goals. With strength in numbers and by sharing knowledge, resources and complementary expertise, the Forest Investor Club can stimulate new solutions and partnerships to unlock capital, originate deal flow and identify innovative approaches to protect, restore and sustainably manage forests and nature for generations to come.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Ethical Corporation Magazine, a part of Reuters Professional, is owned by Thomson Reuters and operates independently of Reuters News.
As Director, Land Use Finance, with the World Business Council for Sustainable Development, Ryan Whisnant works with financial institutions, investors, and companies to understand and disclose exposure to forest and land use-related emissions and nature risks and opportunities, align their portfolios with broader climate goals, and scale investments in nature-based solutions. He has more than 20 years of experience designing and leading initiatives in international conservation and corporate sustainable development focused on nature, climate, and energy.
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