Arming ourselves with the facts – Top tips for conservation entrepreneurship

Heading home from the Business of Conservation Conference hosted by the African Leadership University (ALU) in Kigali, Rwanda, I am truly impressed by the event, its organisers and the strength and variety of conservation enterprise development going on in Africa at the moment.

The theme this year was Environmental Investing: From Scarcity to Abundance and, for Fred Swaniker, ALU’s CEO and tireless champion, this means financially sustainable business models, attracting top talent and establishing an enabling environment. I primarily work on the first of these, and I wanted to pick out a few of my key takeaways about how we design better business models to achieve our goals.

Conservation NGOs and their local partners often choose to develop a particular type of business because of familiarity with that specific industry, not because it’s the best option for their landscape. As conservation entrepreneurs, we need to take a step back and start by getting to know our landscape, to understand its distinct values and assets, before choosing a particular business strategy.

Landscapes are like products – they have unique selling points and comparative advantages relative to other places. Assessing your landscape’s natural, cultural, organisational and network capital will allow you to identify the business opportunities that draw on its strengths and are resilient to any of its limitations.

The need to take time to choose the right product came out in numerous presentations at the conference. Fanamby in Madagascar explained how they initially engaged in tourism and trialled a range of essential oils and other non-timber forest products, before deciding to focus on vanilla, which now generates US$20m in annual income for park margin-dwelling communities.

My colleagues at Fauna & Flora International (FFI) worked with Mwambao in Pemba, Tanzania to analyse a range of products before settling on octopus as the best option. The resulting conservation and livelihood benefits included an increase in community incomes, particularly for women who had traditionally earned less than men in the same market, and negotiation of a per kg contribution by the buyer to local conservation activities. This is why we specifically include landscape assessment and product or market selection phases in our market systems and enterprise development approaches.

It is increasingly recognised that landscapes need to take advantage of multiple business opportunities to deliver sufficient resources and incentives to benefit conservation. Taking a multi-product approach increases financial resilience through reducing the risks of relying on a single sector that may be affected by a recession or drought.

Multi-product strategies were everywhere at the conference. Bio Carbon Partners has brought Bee Sweet’s commercial honey enterprise into the Zambezi region to complement its carbon credits business. FFI-founded Ol Pejeta Conservancy is growing its cattle and agriculture enterprise to sit alongside its tourism activities, and FFI itself is pursuing a similar strategy with Chuilexi Conservancy in northern Mozambique.

Cattle and tourism enterprises in Ol Pejeta and other Kenyan conservancies are not incompatible. Credit: Juan Pablo Moreiras/FFI

This diversified approach has important implications for how we approach conservation financing. Pitching for investment in landscapes rather than single enterprises means new legal structures and financial models that recognise the synergies from a multi-enterprise approach, something that came through clearly in the talks on financial innovation from Mopane Capital, NatureVest and others who add a diversification multiplier to their financial valuations. It also means more work upfront to model the future returns from several of the highest-potential enterprise opportunities in a landscape.

All these considerations mean that successful conservation enterprises need to have proper, evidence-based design and testing phases to demonstrate financial viability and attract investment. The need for good design does not stop at the product but is vital to ensure that the enterprises achieve their conservation and social objectives.

Ensuring the enterprise is embedded within a wider conservation theory of change, and that the business model is designed to create incentives and opportunities for local people to better steward their natural resources, is central to FFI’s approach to conservation enterprise development. There are valuable insights from the world of marketing to influence local behaviour change, as Oxford University’s Saïd Business School is trialling in Tanzania and Mauritius.

Getting the legal structure right is also key to empowering communities as asset managers and shareholders, while keeping politics out of the business operations, such as in Rwanda’s 100%-community-owned Sabyinyo Silverback Lodge. User-focused “design thinking” is widespread in the private and social sectors and we need to get better at applying it to conservation. FFI is contributing to this through its modification of the Business Model Canvas for use in conservation enterprise design.

The conference brought a lot of insight into how to design investments and enterprises that draw on the assets of a place and that deliver sufficient resources and incentives to achieve our goals and empower communities. As we saw, there is no single set of criteria that makes conservation enterprises work. All this locally informed design takes time and resources to test. Yet investors are looking for proven enterprises that have all the legal and community issues worked out.

Bridging that gap means that donors are still needed to fund enterprises to the point where they are investable. This means a combination of innovative forms of early-stage enterprise funding such as venture philanthropy, the use of blended finance structures that combine grant and investment finance to best meet the needs of the business, plus smart public funding that supports high-potential teams to engage in the design process, even before they have selected the product or written the business plan.

ALU’s creation of a forum to delve into the business of conservation in more depth made a major contribution to widening the understanding about how we can more effectively unlock value from – and drive impact for – communities and wildlife in Africa, through smarter engagement, design and funding. I look forward to continuing the conversations started at the conference and am always looking to hear more about what people are up to in their particular spheres.