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Innovative finance instruments

Credit: Juan Pablo Moreiras/FFI.
Written by: Zoë Cullen
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In order to spur green growth we require different types of investors, new ways of doing business, and new ways of doing conservation. Fauna & Flora International (FFI) seeks to support the development of innovative financial instruments for financially sustainable and triple-bottom-line approaches to conservation that deliver conservation, social and economic benefits.

These approaches encompass a broad suite of measures including: training and support to businesses with a commitment to positive conservation impact, markets for biodiversity friendly products that capture willingness to pay for biodiversity and ecosystem services, and more complex financial mechanisms which seek to increase the efficiency of traditional conservation funding through private sector investment.

REDD+ interim forest finance

We cannot wait for a post-2020 global climate treaty to be in place in order to start tackling climate change . In recognition of this challenge FFI is working with a range of partners to develop a finance facility that uses public-sector support to catalyse and scale-up private sector demand for Reducing Emissions from Deforestation and forest Degradation (REDD+) .

The aim is to drive the establishment of a substantial finance instrument that will support the progress made to date in REDD+ by underpinning donor commitments and stimulating demand in the voluntary carbon markets prior to a global agreement on climate change.

Rainforest Impact Bond

FFI is working with ADM Capital Foundation to develop a Rainforest Impact Bond. A social impact bond uses a commitment by the public sector to pay for improved social outcomes that result in public sector savings.

Based on this model, the Rainforest Impact Bond provides a financial structure to direct commercial private sector investment to finance forest conservation projects where repayment of the capital is tied to the achievement of specified social and environmental outcomes (or ‘impacts’). This transfers project risk to impact-oriented investors. The Bond would use donor finance to repay the principle once set objectives are delivered, guaranteeing effectiveness of the donor finance.

Impact investment

We aim to operationalise our expertise in a way that positions us as an intermediary between impact investors and green entrepreneurs, working on behalf of biodiversity stakeholders, though a range of investment models including venture capital, debt, risk reduction, insurance and grant mechanisms.

By ensuring all these innovations are closely integrated with FFI’s global conservation programme, in collaboration with our wide range of partner organisations, we aim to identify and realise opportunities to accelerate the ‘greening’ of markets worldwide.

Written by
Zoë Cullen

Zoë joined Fauna & FIora International (FFI) in 2006. She has been engaged in various roles within the organisation, focussing on issues such as private sector impacts and dependence on biodiversity and ecosystem services, tropical forest governance and, most recently, sustainable financing strategies for community-based approaches to conservation, particularly REDD+. She is passionate about conservation strategies that seek and strengthen synergies between biodiversity and ecosystem service protection and rural economic development. Zoë is now based in FFI’s London office, following a two-year secondment in Indonesia, where she worked with the FFI Indonesia Programme and local NGO partners to develop a community-based forest management program in the buffer-zone of Kerinci Seblat National Park, Sumatra. She has a BSc in Zoology from Bristol University and an MSc in Environmental Policy, Planning and Regulation from the London School of Economics. She is a member of the Plan Vivo Technical Advisory Group and a 2013 Kinship Conservation Fellow.

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FFI seeks to support the development of innovative financial instruments for financially sustainable and triple-bottom-line approaches to conservation that deliver conservation, social and economic benefits.

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