I would like to share this new google-based page Search Engine for Business Sustainability Resources - SHIFT - with you, which advertises itself as a sustainability/ help/ info/ frameworks findings/ and tools platform. It also has a section on Finance Resources (tools). Check it out.

 

  • SHIFT is an online platform that allows you to navigate the sea of sustainability tools and quickly carve out the path to implementation that’s right for your organization.
  • SHIFT is also a community of practitioners working together to curate and review tools based on their own experiences. The SHIFT community includes corporate sustainability practitioners, sustainability-oriented entrepreneurs, impact investors, and more
wt48

Science Diplomacy in 2018

Posted by wt48 Jan 12, 2018

Starting out the year, listening to a webinar with the Costa Rican Ambassador to the US speaking on how diplomacy can help with promoting a Greener World  https://vimeo.com/250661516

 

Some Important talking points for building further collaborations on this video that I will point to are: 

- Transportation (25:15)  = Diverting away from Fossil Fuels

- Natural Disasters (27:01) = How science can be brought to bear preventing natural disasters

- It doesn't have to cost money (28:14) = Why 'science diplomacy' must be integrated into our diplomatic efforts

- Leap frogging (30:20)  Renewal energy improvements and communication technology

WWF GEF Agency seeks a consultant to lead the development of a GEF Project Document for the Land Degradation Neutrality Fund Technical Assistance Facility Project (GEF ID 9900). The consultant will work with the WWF GEF Agency, Mirova, donors, and other relevant stakeholders in the process of project development with compliance to GEF and WWF policies and standards.

The ideal candidate has a Finance/Business background, experience in the design, coordination, management and/or execution of international projects in agriculture, land use or agroforestry and has knowledge in Land Degradation Neutrality. The deadline for applications is January 15, 2018.

 

Please find the TOR under the following link:

https://drive.google.com/open?id=1Oy3h6HjAjqttEnVaJLi97TVDGaRemAST

 

Many thanks for any suggestions of possible consultants.

 

During this year’s World Economic Forum in Davos, the Government of Norway, the Consumer Goods Forum and the Global Environment Facility announced this new fund, aiming to “green agricultural investments”. The fund has been set up by IDH – Sustainable Trade Initiative and is now an independent legal entity.

 

&Green Fund, a global investment fund that supports companies that invest in forest and peatland restoration activities.

The Fund was initially supported by Norway, will attract other investors. GEF also supports the initial phase of the fund.

It is interesting that the &Green Fund will only invest in landscape or jurisdictions which have a forest landscape protection plan, or an Environment and Social Management Plan.

 

Webpage : andgreen.fund – investing in inclusive agriculture, protecting forests

 

Details on geographic focus, vision, financial instruments in presentations attached.

 

Most of the professionals working on environmental quality and green infrastructure might know the DC Environmental Impact Bond, which seeks to solve DC´s growing stormwater pollution problem with the support of private investors.

A growing number of actors is looking at Environmental Impact Bonds as a new form of Private-Public Partnerships to finance nature-based solutions, especially in the water management and green infrastructure sector.

The latest innovative design in this area of growing interest is the Forest Resilience Bond developed by Blue Forest Conservation in partnership with Encourage Capital and the World Resources Institute with support of the Rockefeller Zero Gap Portfolio and Packard Foundation.

 

But what is an Environmental Impact Bond anyway?

 

Despite the name, it is neither a bond nor a registered financial instrument. It is a partnership or more specifically a project contract where two or more parties agree on “pay-for-performance” or “pay-for-success” terms. Typically, a public entity or the government agrees to pay a return to private investors only if the implemented program meets or exceeds previously agreed upon environmental impact or performance targets. Thus, part of a project’s risk is transferred from the payor to private investors.

 

In general, EIBs share the following characteristics[1]:

 

1. Well-defined performance metrics and a third-party evaluation

The project’s performance metrics should represent an adequate proxy for environmental performance or outcomes of the project. Blue Forest Conservation pointedly states: Measure what can be monetized, and monetize what can be measured.


2. EIBs generate savings on project costs for the payors and beneficiaries

The paying entitiy must receive a financial benefit from implementing the “pay-for-success” mechanism to finance early conservation investments. Put differently, even after paying back investors the project should be cheaper than the total losses caused by the environmental issue or the costs incurred if an alternative is implemented at a later moment.


3. Returns depend on the environmental performance or outcome of the project

Investors get paid by the government or other beneficiaries an agreed amount that is conditional on the performance of the project and the environmental outcomes achieved. The outcome is usually verified by a third-party evaluation. Sometimes additional payments are made to investors if the outcomes exceed expectations. On the other hand, the payor can withhold a portion of the interest or of the principal if the project underperforms.

 

In the case of the Forest Resilience Bond, the proposal is to establish a public-private partnership that enables private capital to finance much-needed forest restoration. The FRB seeks to monetize different benefits generated through forest restoration from both public and private beneficiaries (including the US Forest Service, water and electric utilities, private water-dependent companies, state governments, and insurance companies).

 

FRB.png

 

 

 

 

The FRB proposes to combine three main components: (1) measuring of benefits conferred by restoration activities (ecosystem services), (2) contracting to convert these benefits into payments from the different beneficiaries, and (3) financial structuring to turn beneficiary payments into cash flows for investors.      


Blue Forest Conservation just published the Roadmap to Collective Action on the Forest Resilience Bond. Find the document attached or download it here.

 

 


[1] https://www.edf.org/blog/2017/07/14/environmental-impact-bonds-next-big-thing-green-investments

jordon

Articulation and Proximity

Posted by jordon Sep 2, 2017

The following is a quote from Perceptions of Time in Relation to Climate Change ( Sabine Pahl, Stephen Sheppard, Christine Boomsma and Christopher Groves ) 2014

.....

 

Psychologically distant events are represented in ‘why’ terms, using abstract, schematic, and decontextualized mental representations that are related to meaning. Psychologically close events are represented in ‘how’ terms, focusing on feasibility and including rich details of the situation.

In an attempt to differentiate sustainability finance, green finance and climate finance, I came across this excellent overview compiled by the European Political Strategy Center (EPSC, June 2017): Financing Sustainability Triggering Investments for the Clean Economy (pdf)   which offers excellent illustrations.

 

Have you come across other helpful overviews and illustrations? Share them here

 

Illustrations as seen in above EPSC publication:

 

(1) Definitions

green finance.png

 

(2) History

moments sust finance.png

(3) Finance as motor for sustainable development

wheel.png

(4) Financial system

financial system.png

(5) Impacts of disasters on the economy

impacts.png

The Principles for Responsible Investment (PRI) are in essence a set of global best-practices for responsible investment. Rising numbers of institutional investors – from all regions of the world – are embracing them, marking a major advance in mainstream financial markets.

 

The website says the final Blueprint for Responsible Investment  is "soon to come" (May 2017) and will inform the PRI’s strategic direction and priorities over the next decade. It will identify which recommendations from the consultations and impact evaluation the PRI will take forward, include a high-level implementation plan and timeline and outline how the organisation will measure the success and impact of its work over the next 10 years.

Edit (Sept 2017):

The Blueprint 2017 is now available on the PRI Blueprint microsite and attached to this article. The guiding motto of the Blueprint is "Our aim over the next 10 years is to bring responsible investors together to work towards sustainable markets that contribute to a prosperous world for all."


The Principles for Responsible Investment build on the different angles Environment, Social and Governance factors can impact on a company/organisation:

ESG Factors and value.png

Originally launched in April 2006, the principles are summarised as follows:

  1. Incorporate ESG issues into investment analysis and decision-making processes.
  2. Be active owners and incorporate ESG issues into our ownership policies and practices.
  3. Seek appropriate disclosure on ESG issues by the entities in which we invest.
  4. Promote acceptance and implementation of the Principles within the investment industry
  5. Work together to enhance our effectiveness in implementing the Principles
  6. Each report on our activities and progress towards implementing the Principles


Full PRI Introduction can be downloaded here (9p.)

The PRI Website can be accessed here.

The proposal to launch the Green Finance Study Group (GFSG) under China’s Presidency of the G20 in 2016 was adopted by the G20 Finance and Central Bank Deputies meeting on 15 December 2015 in Sanya, China. The Study Group is co-chaired by China and the United Kingdom, with support from UN Environment as secretariat.


In 2017, the GFGS has developed a set of 7 options (for consideration for voluntary adoption) to enhance the ability of the financial system to mobilize private capital for green investment.

  1. Provide strategic policy signals for investors regarding the strategic framework for green investment e.g., to pursue the Sustainable Development Goals (SDGs) and the Paris Agreement.
  2. Promote voluntary principles for green finance and evaluate progress on sustainable banking, responsible investment and other key areas of green finance.
  3. Expand learning networks for capacity building: available examples being the Sustainable Banking Network (SBN), the UN-backed Principles for Responsible Investment (PRI), or other international and domestic green finance initiatives.
  4. Support the development of local green bond markets.
  5. Promote international collaboration to facilitate cross-border investment in green bonds.
  6. Encourage and facilitate knowledge sharing on environmental and financial risk.
  7. Improve the measurement of green finance activities and their impacts.


This here is the document repository of the G20 Green Finance Study Group (2016-2017), showing the synthesis report, input papers and communiques.

Input papers have been prepared by the authors as a contribution to the G20 Green Finance Study Group (GFSG) but have not been endorsed by it nor do they represent the official views or position of the GFSG or any of its members.

Full report: Chinese | English
Summary: Arabic | Chinese | English | French | Portuguese | Russian | Spanish

With the multiple pressures to deliver private sector co-financing, we are hearing different solutions.

 

What is however needed, is an understanding of investment process and incentives behind investments.

 

Investment goes where value is. You invest your savings in a house you think already has, or will raise in, value.

 

Therefore creating value is first and foremost task in attracting investments to nature. Choice of a financial instruments (to channel this value to the market) comes second. You can use debt, e.g. bonds (green, blue, or multicolor), or equity, or combination thereof. However very often the focus of people around me is on the financial instruments. I jokingly call it "green bonds euphoria" and remind myself of a mortgage crush in 2008, when managers overlook the actual value of the houses they were banking on.

 

 

How do we create value in natural resources? E.g. in fisheries?

 

Here is an article that refers to it, using Walmart and GEF money, and Rare expertise.

 

Impact Investment Fund Marks First Close of $10 million for Sustainable Coastal Fisheries

 

How do you see creating value in the field you work in?