Abstract
Impact investing, particularly related to tropical rainforest conservation, is a relatively new class of emerging conservation financing instruments. Such instruments include impact investments structured by nonprofit and for-profit organizations, along with through dedicated funds. There are also emerging techniques to develop listing standards for publicly traded equities and an emerging divestment movement. The author presents an historical overview, provides more details on the mechanisms, presents two case studies, and then undertakes both a financial analysis and a policy analysis, along with a future outlook.
The 2 case studies will examine Althelia Ecosphere’s Althelia Climate Fund and Credit Suisse’s Nature Conservation Notes. The Althelia Climate Fund successfully closed its first round of financing with €60 million raised from a wide variety of investors. In addition, the Althelia Climate Fund also received investments via Credit Suisse’s Nature Conservation Notes. Taken together, the Althelia Climate Fund has financed on-the-ground projects including a USD$10 million, 8-year investment to preserve 200,000 hectares of forest and savannah grasslands in Kenya and a USD$12 million, 7-year investment to finance the conservation of 570,000 hectares in Madre de Dios, Peru. Credit Suisse raised €15 million in funds by issuing the Nature Conservation Notes. The Notes, which were a first-of-their kind for both Credit Suisse and the banking industry, were originally placed into a portfolio of 10–20 green bonds, and then once the on-the-ground projects were lined up, the bonds were liquidated and the funds were reinvested into the Althelia Climate Fund.
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Notes
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McFarland, B.J. (2018). Impact Investing. In: Conservation of Tropical Rainforests. Palgrave Studies in Environmental Policy and Regulation . Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-63236-0_10
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