GNF | Financing biodiversity: Investments for nature conservation

In order to achieve global biodiversity, climate and development goals, private investments are of great importance.

But how can we ensure that private capital has positive social and ecological impacts? How can the financial risks be fairly distributed among the involved parties? How can biodiversity be preserved or even increased in the areas invested in? For several years, the Global Nature Fund (GNF) has been working with the Tropical Forest Foundation OroVerde in various projects to find answers to these questions.

Financing forest landscape restoration

Recently, GNF visited four projects in several African and Latin American countries to find out where private investment in forest landscape restoration initiatives works well. Striking for us: Fund managers find it difficult to find investable projects that protect biodiversity, soil and water balance and at the same time strengthen the local population. In order to develop such measures, innovative financing concepts are needed that support local structures and whose expected returns remain realistic. The study On the Way to Forest Landscape Restoration – Financing, Implementation and Recommendations provides fund managers and policymakers with information on the successful implementation of forest landscape restoration projects.

Impact Investment – fair returns take time

So-called impact investments aim to combine financial returns with positive environmental and social impact. This entails certain risks for investors – especially since the idea is still quite new. In addition, long-term investments must be ensured, because ecosystems like forests need time to generate income. The study Private capital for nature conservation: could impact investments be a solution? examines pioneer investments in terms of expected returns and social and ecological criteria, the recording of which is often problematic and time-consuming.

Forest Investments for Biodiversity Protection

Another study, not yet available in English, Waldinvestments – Artenreichtum oder Rendite, shows the risks associated with forest investments by private investors. In general, we recommend that private investors obtain detailed information on exit clauses and proven track records and invest in a mixed portfolio. In order to ensure that important ecological and social criteria are met, potential investors should ensure, for example, that a project promotes mixed cultures, uses native tree species or restores natural forest areas. From a social point of view it is particularly important to respect land rights, involve local actors and pay fair wages.

More information

Source: Global Nature Fund (GNF), 18 August 2020