Between 2009 and 2013, conservation impact investments totaled approximately $23 billion, with private investments accounting for almost $2 billion of the total — an amount that is expected to grow at an average annual rate of 26 percent, to more than $5.6 billion, by 2018, a study conducted by EKO Asset Management Partners and the NatureVest division of the Nature Conservancy finds.
Based on a survey of fifty-six investors, including five for-profit and nonprofit development finance institutions and fifty-one private investment firms, the report, Investing in Conservation: A Landscape Assessment of an Emerging Market (88 pages, PDF), found that the funds committed to conservation impact investing over the five-year period were invested primarily in water projects, including watershed protection, water conservation and storm water management, and trading in credits related to watershed management; sustainable food and fiber production, including investments in sustainable agriculture, timber production, aquaculture, and wild-caught fisheries; and habitat conservation, including investments in the protection of shorelines to reduce coastal erosion, projects to reduce emissions from deforestation, land easements, and mitigation banking.
The dollar figures in the study, which was overseen by a committee that included representatives of the David and Lucile Packard and Gordon and Betty Moore foundations and JP Morgan Chase, are likely to be on the low side, with the authors of the study anticipating that its publication will spur other investors to come forward with information about their impact investments.
Still, while private investment in conservation projects is expected to more than triple between 2014 and 2018, a significant amount of private capital that could be deployed for such projects sits idle, demonstrating the critical need for an increase in the number of risk-adjusted investment opportunities. According to a Global Canopy Programme report, some $300 billion annually is needed to meet the world's conservation challenges, while current funding from governments, multilateral agencies, and philanthropic sources amounts to roughly $50 billion. To address the shortfall, the study's co-authors are working to structure conservation opportunities that can be supported by private capital. For example, NatureVest, which was launched earlier this year with support from JPMorgan Chase, aims to deploy $1 billion in impact capital for conservation over the next three years.
"We decided that rather than wait and react to investment ideas that came our way, we needed to proactively understand the landscape of conservation impact investments," said the Moore Foundation's Dan Winterson. "While there are inevitable gaps in the data — especially on the conservation impact side — I think this report is an important step as the first systematic attempt to provide a comprehensive fact base of activity in the conservation investing field."