How to unlock the finance needed for integrated landscape approaches
In The News
26 Nov 2018
Why integrated landscape approaches matter and how to unlock the public and private finance they need today, for tomorrow
We have just “11 more harvests” within which we must transition our global agrifood and land-use systems by 2030, said Marion Verles, CEO of the Gold Standard Foundation, kicking off the breakout session on landscape finance at EIT Climate-KIC’s Climate Innovation Summit in Dublin.
Healthy, thriving and biodiverse landscapes are vital to ensuring that the world stays within ‘a well below 2C’ pathway, so it was no surprise that the financing of these macro-climate solutions was a hot topic at the summit in Dublin earlier in November.
The last 20-30 years have seen a healthy number of diverse landscape initiatives focused on biodiversity conservation, regenerative organic agriculture, climate change adaptation and mitigation, clean waters, restoration of degraded lands and sustainable forest, coastal and wetlands management, and resilience, through diverse communities of practice.
Against this backdrop, many legacy landscape and conservation projects face critical gaps in leadership, capital and institutional capacity. However, public, private and institutional investors financing these sustainable land-use projects are now looking at practical ways to scale them, make them more joined-up and systemic, and appropriate to the global scale of the current climate challenge.
The session focused on how to reduce the risk profiles of such projects and better connect them to some of the vast new pools of financial capital available for leverage and investment in sustainable landscapes. Currently, only a fraction of such funds reach the land sector and even less for inclusive green economy models.
Paul Chatterton, Lead and Founder of the WWF Landscape Finance Lab (LFL) is working closely with EIT Climate-KIC’s Sustainable Land Use theme, and said, “We can’t use the tools that have created the crisis to fix it. Project-based and sectoral approaches haven’t worked. We need new approaches. We need larger, long-term and integrated approaches, and landscapes provide this. Led by local communities, landscape programmes allow an elevated scale that can attract new public and private finance and deliver SDGs (UN Sustainable Development Goals).”
He added that the world has roughly a thousand landscapes. Of these, around 100 matter most from a climate perspective and much of the heavy lifting can be done by focusing on these. For instance, the majority of world deforestation is concentrated in 11 landscapes. Systemic restoration of all these 100 global landscapes identified as ‘critical’ might cost only as much as a single aircraft carrier – which puts the financing of global landscape ambition firmly within political and practical reach.
Introducing one test-case in Fiji, the session then explored practical ways for investors and landscape players to start experimenting and testing systemic approaches in the field from Peru to the Congo.
Jodi Smith, Partner of The Earth Care Agency (Fiji Landscape) introduced the 2.8 million ha project in Fiji backed by the Landscape Finance Lab which is taking a systemic “ridge to reef” approach to landscape stewardship. This aims to reverse damage to delicate land, water, reef and forest ecosystems from unsustainable farming practices, particularly sugar cane where fertilizer use is currently supported by government subsidies. The project is raising local incomes from certified sustainable agrifood exports and she is working on behalf of business owners to secure loans and commercial finance that her community needs to develop, diversify and scale. They want to go beyond aid, grants or subsidies, which often compound these issues. She firmly believes that this innovative market-based regenerative approach to landscape financing will not only revalidate traditional farming practices but drive a virtuous circle of positive economic, environmental and social outcomes and boost sustainable returns in other sectors of the economy, from tourism and fishing to forestry and energy.
Panellists including Florian Meister, Managing Director, Finance in Motion then brainstormed financing options and pragmatic ideas to create an even stronger business case for the LFL Fiji project and better connect local funding opportunities like those presented by Jodi to structured financing from international, commercial and institutional lenders. He said the finance definitely exists but building out a chain of trusted intermediaries was complex. Johnny Brom, Chief Investment Officer, SailVentures also highlighted challenges of structuring finance – “Seed grant funding for strengthening business proposals is often required before leveraged loans can scale the landscape finance opportunity”. Renat Heuberger, CEO, South Pole summarised, “Return, risk and scale are key to growing the global landscape financing opportunity.”
Practical ideas to scale-up the Fiji programme ranged from securing a major overseas retail partner with global supply chains to boost trade demand for certified agrifood and bio-based exports, to establishing a local foundation accountable for managing the distribution of finance via local banks and intermediaries. The role of an independent partner is crucial to target, test, validate and to report bankability and progress to international investors. Partnering with national development programmes helps with delivering the commitments made under the Paris Agreement. The LFL is exploring the possibility of establishing anchor funds that can de-risk projects and unlock loans from other lenders.
EIT Climate-KIC is committed to boosting innovation in integrated sustainable land use approaches and is a proud investment partner for global scale landscape programmes like those in Fiji, developed by WWF’s Landscape Finance Lab.
SUMMARY:
- Healthy, thriving and biodiverse landscapes are vital to ensuring that the world stays on a ‘well below 2C’ pathway. Financing the transition of global agrifood and land-use systems is central to achieving this.
- Many global landscape initiatives are currently struggling to find ways to access financial capital aligned with their local, regenerative needs and visions.
- The Landscape Finance Lab is experimenting with practical new ways to scale existing landscape and conservation projects, make them more joined-up, long-term and systemic, appropriate to investor needs and the global scale of the current climate challenge.
- ‘Ensuring return, addressing risk and achieving scale’ are key to securing finance for around 100 high-impact landscape opportunities, led by local communities and identified as globally significant.
