6.1.3 Private investment in biodiversity.

Biodiversity conservation targets cannot be achieved by public finance alone. Mobilization of private finance via regulatory frameworks, smart incentives and awareness of inclusive and sustainable business models are essential. Only by expanding and financing sustainable businesses can we preserve and sustainably benefit from Earth’s terrestrial and marine ecosystems. Fifteen percent of the world’s land is currently under protection, but that does not cover all areas important for biodiversity. Nurturing a new generation of enterprises and investors is critical for achieving Sustainable Development Goal (SDG) 14 (Life below water) and 15 (Life on land).

The challenge is that private investment is not at the scale needed to address biodiversity finance systemic problems. We estimate the gap at hundreds of billions of dollars. Despite the small numbers, investments in companies and financial products generating both a financial return and a measurable conservation impact have grown. From 2013 to 2015, the total private capital committed to conservation investments jumped by 62 percent, to a total committed private capital of US$8.2 billion tracked from 2004 to 2015.

Achieving scale requires a shift in how private companies and financial institutions view investment opportunities in biodiversity and ecosystems, and how public and philanthropic actors act to correct market failures and catalyse private capital. Conservation finance is a massively undeveloped market. Private investors—wealthy individuals, pension funds, other institutional investors and even mainstream retail investors— could supply as much as the US$200 billion to US$300 billion per year needed to preserve the world’s most important ecosystems, still a small fraction of total wealth. This ambitious goal can be already compared to the US$23 trillion of wealth that is already invested responsibly, in other words between a fifth and a fourth of all dollars under professional management.

A “supplement” to the Biodiversity Finance Workbook will help public and private practitioners understand and implement finance solutions aimed at attracting private investment. It will first delve into the role of private businesses and the financial sector in financing biodiversity, before reviewing recent trends in private investment in conservation and summarizing the prevailing forms of engagement, and the ways and means to implement private sector-oriented finance solutions.

Box 6.2: The Coalition for Private Investment in Conservation (CPIC)

The Coalition for Private Investment in Conservation (CPIC) is a group of leading civil society organizations, private and public sector financial institutions and academia working to deliver a material increase in private, return-seeking investment in conservation. CPIC is developing new investment models and funding pipelines that will help close the current conservation funding gap and contribute to the global goals for biodiversity conservation and sustainable development.

CPIC maintains a list of resources at: http://cpicfinance.com/resources/related-reports