Natural Capital - Why the Nature Conservancy Works with Wall Street

Sep 10, 2015 9:05 AM ET

Impact Investing: Aligning Capital with the Conservation of Nature 

By Mark R. Tercek, President and CEO of The Nature Conservancy

Today's environmental challenges are bigger than ever. And a rapidly growing population coupled with climate change will only exacerbate current threats. Big challenges like these will require bold solutions. The environmental movement must try new approaches and scale up our work so it’s bigger, better and faster.

Although our usual sources of funding—traditional philanthropy and government grants—are critically important, those sources can only take us so far. That’s why we’re excited about impact investing, a new conservation strategy that could have a tremendous impact in the environmental arena.

Impact capital—money invested in projects that provide a return on investment while driving positive societal impacts—is taking off in areas ranging from childhood education to clean tech. Although it's still an emerging way to finance conservation, impact investing could unlock significant environmental progress—and significant returns for investors looking to align their portfolios with their values. Investors receive a below-market financial return coupled with a measurable environmental return. Together, the two pieces add up to a robust return on investment. Meanwhile, investees put the capital to work on large-scale, replicable conservation projects. 

A year ago, my organization The Nature Conservancy (TNC), joined forces with JPMorgan Chase to launch NatureVest, an impact capital initiative that bridges the gap between conservation projects and potential investors. The conservation field is ripe with opportunities for impact investing—activities that offer cash flows, adequate risk-to-return ratios, solid track records and broad impacts. Projects range from sustainable timber and ranching to water and carbon offset markets. NatureVest and other groups are now building a robust pipeline of projects that wouldn't be possible without impact capital. 

For example, NatureVest's first project was a traditional land transaction taken to a whole new scale—a 165,000-acre, $134 million acquisition in Washington's Cascade Mountains and Montana's Blackfoot River Valley. The deal is enormously strategic. It links millions of acres of wildlife habitat, protecting privately owned parcels that were dispersed among public lands and at risk of being developed, fragmenting the habitat. The lands also preserve the headwaters of the Yakima River, an important source of drinking water for the region.

It would have been very difficult to accomplish a deal with such a high price tag through traditional philanthropy alone. That's where impact investments came in. Through NatureVest, impact investors provided 95 percent of the capital for the deal, allowing TNC to act quickly to purchase the lands. The bulk of the capital was provided at very attractive terms, as low-cost, long-term financing.  

Read the Full Biog here-

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GreenMoney Journal and
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