Sean Penrith, The Climate Trust
Weekly Policy and Finance Update – January 22, 2018
|“It’s unnerving to see the billion dollar valuation of Snap Chat pre-IPO that has limited societal value and yet here we are talking about existential climate threats and we are trying to mobilize a few million dollars!” – Lorenzo Bernasconi, Innovative Finance and Impact Investing, Rockefeller Foundation.|
In between my paternity leave, I nipped off to New York to attend the 5th annual Credit Suisse Conservation Finance conference. For a one-day event, it is one of the best. The session titled Innovative Finance Strategies to Improve Life on Land and moderated by Peter Stein of Lyme Timber, was superb!
Life on Land is goal #15 on the list of Sustainable Development Goals (SDGs) with the agenda of sustainably managing forests, combatting desertification, reversing land degradation, and arresting the loss of biodiversity. The UN General Assembly adopted these SDGs in 2015 with the critical intent of guiding society’s actions to balance human and environmental needs by the year 2030.
In the words of Achim Steiner, chief of the UN Development Programme, there are “Enormous mountains of cash” that can be mobilized for the SDGs. Steiner is advocating that SDG investing surpass $300 billion a year for clean energy investments and attain $2.5 trillion a year asap. I am right there with Achim!
It was a sobering moment during the event when Bernasconi of Rockefeller pointed out the sad irony of Snap Chat’s billion-dollar valuation when we are trying to mobilize crucial investment into saving our planet. Stein’s panelists offered up some hope as they shared their innovative approaches to bringing capital to conservation.
Gabriel Eickoff of Lestari Capital walked us through their creation of the “Sustainable Commodity Conservation Mechanism,” which I thought was quite brilliant. Agro commodity producers are issued penalties for failing to adhere to their commitments to produce palm oil without engaging in deforestation. Lestari’s SCCM is designed to leverage those penalties to create a revolving fund that can invest and deepen impact without the need to repay these producers any return. In the words of Eickoff, “SSCM is an environmental liability management de-risking approach.” Smart!
Martin Stuchtey of SystemIQ was up next. The comprehensive approach he outlined was quite breathtaking in its ambition. SystemIQ was established in 2016 to “accelerate the urgent transformations” needed under the UN SDGs. The organization’s activities include coalition building, incubating market-based solutions to support regenerative approaches in the circular economy, land use, and energy sectors, and investing. On a large-scale basis, they have essentially mapped out the interventions, finance, and demand creation needed to ramp up wholesale economic system change.
While Bernasconi may be right; for now, I sense with actors such as these, we will indeed begin to approach Steiner’s target of $2.5 trillion a year.
|Sustainable Development Goals
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Image credit: Flickr/Mark Jensen