BRIDGING FINANCIAL AND NATURAL CAPITAL

ABOUT IUCN NATIONAL COMMITTEE OF THE NETHERLANDS (IUCN NL)

IUCN NL is the Dutch national committee of the International Union for Conservation of Nature, the world’s largest and most diverse environmental network. IUCN harnesses the experience, resources and reach of its 1,300 member organisations, which include states and government agencies, NGOs, large and small, economic development agencies, scientific and academic institutions, and business associations. IUCN also has an extensive international network of more than 10,000 scientists. These volunteer experts assess the state of our world’s natural resources and provide the Union with sound know-how and policy advice on conservation issues. IUCN is the global authority on the status of the natural world and the measures needed to safeguard it.

Within the international IUCN umbrella organization, IUCN NL helps the world find pragmatic solutions to our most pressing environment and development challenges such as biodiversity loss, climate change and poverty. Nature is fundamental to addressing these problems. Natural capital is the foundation of our economy and our wellbeing. It provides us with food, clean water, fresh air, energy, medicine and a roof over our head. That is why the protection of biodiversity and ecosystems is at the heart of IUCN’s mission.

IUCN NL currently has 37 Netherlands-based member organizations. Our members range from nature and environment organizations and scientific institutes to the Dutch government. Our strength lies in our network. Every day, we bring partner organizations together, both in the Netherlands and abroad. By joining forces, we are able to reach our goals. We focus on four themes: nature conservation; climate, water & food; environmental justice and green economy.

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Carola van RijnsoeverDutch Ambassador Sustainable Development, Director of the Inclusive Green Growth Department, Ministry of Foreign Affairs – The Netherlands

Coenraad KrijgerDirector IUCN National Committee of The Netherlands (IUCN NL)

In her policy note ‘Investing in Future Prospects’, Minister Kaag for Foreign Trade and Development Cooperation set out her key priorities. Innovative and integral SDG financing plays a pivotal role, as public funds cannot foot the entire bill. It is generally accepted that the SDG-finance gap can only be bridged when the private sector also contributes. As this report illustrates, companies that invest in climate adaptation and mitigation, sustainable landscapes and natural capital can create financial, as well as social and environmental returns on their investment. The achievement of SDGs provides opportunities, also in financial terms.

To promote private investment in sustainable development the Dutch government supports various forms of public-private partnership. The DAWCA programme that was implemented by IUCN NL has demonstrated the potential for ‘green organisations’ to develop effective public-private financing schemes in traditionally underfinanced and complex sectors, such as management and restoration of ecosystems, and water preservation. IUCN NL has succeeded to create an enabling environment in which private sector companies are ready to invest in sustainable value chains. These investments benefit a multitude of local actors. And a multitude of vulnerable people in particular.

I wish to congratulate IUCN NL with this elegant and informative publication, and I hope that we will witness an even stronger involvement of the IUCN network in this area in the coming years.

Ultimately, economic development depends on the extent to which we manage to protect ecosystems and manage natural resources sustainably. This conviction fuels our work for a more sustainable financial system. It also helps us strengthen the collaboration with our members and partners.

Business as usual has a detrimental impact on our natural capital, some of which is irreversible. In addition, the benefits and burdens of such unsustainable economic development are not distributed equally. Turning this negative tide is possible if we work together. For providers of financial capital, this will mean truly taking natural capital into consideration.

This report shares learnings and cases from the past five years of our work towards a more sustainable financial system. The report is structured along the pillars of our sustainable finance strategy.

Many of the examples come from the Dutch Agro-Water Climate Alliance. This programme and its impact would not have been possible without the support of the Dutch Ministry of Foreign Affairs. Nor without the hard work of our members and partners in the Netherlands and in the many countries in which we work.

Only through collaboration can we conserve the integrity and diversity of nature and ensure that any use of natural resources is equitable and ecologically sustainable.

We are very grateful for the support and partnership we’ve enjoyed in the past years and we look forward to continued and new collaboration for sustainable finance.

INTRODUCTION

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“IUCN’s engagement with the financial sector

is not about becoming a major financial sector player

ourselves, not about structuring deals. Rather it is

about helping others to develop innovative financial

instruments to scale up finance towards sustainable

landscapes. It’s about open dialogue and collaboration

with many different parties, each contributing their own

expertise and skills, each stepping up to drive change.”

Gerard Bos,

IUCN International

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DEVELOP P14

SUSTAINABLE FINANCE STRATEGY . . . . .10

DEVELOP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

ENGAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

INFORM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

WHAT’S NEXT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

THANK YOU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

GET INVOLVED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60ENGAGE P38

INFORM P49

CONTENTS

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Mainstream economic actors do not sufficiently recognize the interdependency of financial capital and the underlying social and natural capitals. Shortly after the launch of the Sustainable Development Goals (SDGs), the Stockholm Resilience Centre highlighted the interdependency of the SDGs, placing natural capital as the basis of everything else. While many investors publicly support this idea, the sector lacks commitment and expertise to change its course. The result is that the investment and actual allocation of investments in to life below water (SDG 14) and life on land (SDG 15) are lagging behind and that ecological degradation continues. Together with SDG 6 (clean water) and SDG 13 (climate), these SDGs form the biospheric foundation of the Sustainable Development agenda. Without this solid foundation, the building of a sustainable economy is impossible.

Fortunately, select financial institutions managing trillions of dollars are starting to align their portfolios with the SDGs. Other investors are beginning to realize that their returns will be undermined by disruption resulting from climate change and depletion of natural resources. Yet the connection with - and actual reallocation of finance towards - developments on the ground continue to be challenging. There is a disconnect between investors and the entrepreneurs and organisations leading projects for sustainable development.

Sustainable investors perceive a lack of investible sustainable projects. At the same time, sustainable project developers are challenged to effectively engage with investors. They are unable to successfully pitch the business case of their landscape or biodiversity project. Hence, they fail to realise their impact, or depend on subsidies and charitable donations for the long-term. Making themselves unsustainable in the long term.

IUCN NL’s integrated landscape management approach offers a framework for making landscape-level sustainable development decisions. Decisions that balance competing demands for space in the landscape and strive for smart integration of agricultural production, nature conservation and livelihood enhancement.

SUSTAINABLE FINANCE

STRATEGY

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Conserving the integrity and diversity of nature and natural resourcesIUCN’s vision is of a just world that values and conserves nature. Our mission is to influence, encourage and assist societies throughout the world to conserve the integrity and diversity of nature and to ensure that any use of natural resources is equitable and ecologically sustainable.

The overarching objectives of IUCN NL are:1. an integrated approach to land-use through

inclusive and sustainable governance of ecosystems and their services, with focus on international public goods;

2. a sustainable, biodiversity-enabling footprint of the Dutch economy.

Bridging the gap between providers of natural and financial capitalFrom these objectives, IUCN NL is committed to play a meaningful role to bridge the gap between providers of natural and financial capital. To ensure investments yield a return on - and for - nature, we have a sustainable finance strategy. The overarching objective of this strategy is to achieve zero or net-positive impact at the landscape level to restore and protect important ecosystems.

To do so, IUCN NL deploys its key strengths: in-depth knowledge of nature and landscapes; being part of the worldwide IUCN union and our convening power across our global network of civil society organisations, knowledge institutions and experts, public authorities and companies; and a strong network of relevant partners in The Netherlands, including the Dutch government, nature conservation organizations, knowledge institutes and companies.

In line with our overall organisational targets, our sustainable finance strategy has two key pillars: 1. Investing in sustainable landscape programmes

– developing investible initiatives and activating investments with a net-positive impact at the landscape level;

2. Engage with financial institutions to improve their impact on nature - to make them aware of the negative impact of their investments and to help them raise the bar with more ambitious targets and more stringent standards to reduce this negative impact.

Through synthesis of experiences and best practices from our sustainable finance work, we also actively inform the development of (inter)national tools and policies.

This report is structured along the pillars of our sustainable finance strategy. For each of the pillars, it outlines our objectives and activities, supported with highlights and cases of the past years. Please read on to find out more about the Dutch Agro-Water Climate Alliance (DAWCA), the Green Finance Academy, Mobilising More for Climate (Mobilizing More), the Coalition for Private Investment in Conservation (CPIC) and other parts of our sustainable finance work.

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DEVELOP

1514

The more extensive of the two strategic pillars is to develop sustainable landscape programmes and to activate investments in those programmes.

1.1 DEVELOP INVESTIBLE LANDSCAPE INITIATIVES In most landscapes, there are various stakeholders using natural resources and ecosystem services stemming from the landscape. Without a long-term, joint overall vision for such a landscape, there are no incentives for anyone to improve inefficient, wasteful or destructive production systems. Instead, overlapping claims by these actors can lead to overexploitation and environmental degradation; pushing the landscape beyond its carrying capacity. Unsustainable competing claims on the resources within a landscape can even lead to increased social conflict.

Properly governed landscapes not only increase cooperation between users of resources within the landscape, but also reduce risk for investors and entrepreneurs. To achieve zero or net-positive impact at the landscape level and to restore and protect important ecosystems, the main strategic pillar of our sustainable finance strategy focuses on developing investible initiatives within landscapes. In the past five years, we have worked on this in many landscapes, across many countries. In this chapter, we highlight how companies and investors can act more sustainably and what we have jointly learned from a wide variety of cases in many landscapes. Over the course of the next years, we will further focus our efforts to develop investible initiatives in three or four landscapes in which we are already involved.

When selecting the landscapes for our sustainable finance efforts, we consider factors like the biodiversity value and the threats on the ecosystem, but also the enabling environment of local government,

INVESTING IN SUSTAINABLE LANDSCAPE PROGRAMMES

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the potential of local NGO partners, and the opportunity to develop business cases in a multi-stakeholder partnership.

In 2016, research commissioned by IUCN NL and VNO-NCW (the Confederation of Netherlands Industry and Employers) identified that to develop investible initiatives in landscape programmes, it is key to engage local stakeholders and to facilitate multi-stakeholder collaboration. This applies to both landscapes in developing countries and in countries like The Netherlands. IUCN NL’s approach, therefore is, to set up (or build on) inclusive, multi-stakeholder collaborations to create investible business cases around the problems and opportunities in specific landscapes where we work. Our landscape approach also focuses on the integration of solutions from different sectors, such as agriculture, water and energy.

Within and around each landscape initiative, we work with a diverse group of stakeholders to create investible business cases. Each multi-stakeholder partnership includes diverse partners such as entrepreneurs, local investors, local/regional government/authorities, companies with a stake in the landscape through their supply chain.

Our unique added value lies in the convening power and the access to knowledge in our organisation and network. This can include expertise on topics like value chains, impact monitoring, standard setting, financial flow analysis, business development, ecosystem-based solutions and more.

1.2 ACTIVATING INVESTMENT IN SUSTAINABLE LANDSCAPESTo achieve active investments in our focus landscapes, we work with financial institutions and other companies that already have specific commitments to achieve net-positive impact at the landscape level.

For these organisations we offer:• In-depth training on integrated landscape

approaches, natural capital, monitoring and standards;

• Support in the identification of success factors and ESG criteria related to landscapes and natural capital;

• Dialogue on specific issues in their investment portfolio or on a broader set of topics, often in close collaboration with our members;

• Access to best practices and learnings based on the cases from our Mobilizing More for Climate Challenges;

• Access to and guidance for the use of the Landscape Investment and Finance Tool (LIFT), the Green Finance Academy, the Coalition for Private Investment in Conservation (CPIC) blueprints and the Natural Capital Protocol;

• Opportunity to contribute to our Mobilizing More programme and the Green Finance Academy.

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Strategy in Action: The Dutch Agro-Water Climate AllianceThe Dutch Agro-Water Climate Alliance (DAWCA) brings together public and private actors in the Netherlands to identify and map business cases which tackle causes and/or impacts of climate change in the global south and support the implementations and scaling up of such initiatives. In the past five years, DAWCA has been the flagship programme within IUCN NL’s sustainable finance work. We are grateful for the financial support for DAWCA by the Dutch Ministry of Foreign Affairs.

Climate change is one of the greatest challenges of our time. It poses major threats to ecosystems - the natural resource base on which economies depend. At the Copenhagen summit in 2009, industrialized countries pledged to mobilize US$ 100 billion in climate finance per year by 2020. For the Netherlands, this would translate into a contribution of US$ 1.2 billion by 2020, up from US$ 200 million in 2013. A contribution that cannot be borne by government alone; approximately 50% is expected to come from private sources.

Under the DAWCA programme, IUCN NL collaborated with Dutch entrepreneurs, companies, investors, NGOs and government to support and mobilize funding for at least 20 business cases that address the causes and impacts of climate change. Key elements of the DAWCA programme include the Mobilizing More competition, the LIFT, the Green Finance Academy and a start-up fund. All with a shared objective of mobilizing financial capital for more sustainable investments to reverse climate change and other environmental degradation.

Strategy in Action: Mobilizing More for ClimateThrough a competition process, Mobilizing More brings together entrepreneurs, policymakers and investors to make innovative climate ideas bankable. “By combining the expertise of different parties involved in the Mobilizing More process, the business cases are strengthened”, says Maxime Eiselin, Expert Sustainable Finance at IUCN NL. Since 2014, general competitions with an open call for proposals have been held every year. In 2017, a specific Mobilizing More process was staged for Indonesia; in 2018 one was started for Tanzania. Entrepreneurs and NGOs with climate ideas for developing countries are encouraged to join the Mobilizing More programme.

To qualify for the Mobilizing More programme, project proposals need to be:• Relevant to climate change adaptation

or mitigation;• Promising to mobilise private investment;• Actionable and include concrete milestones; • An intervention rather than an event or a report; • Led by one main party, and to have a link to

The Netherlands.

Entrepreneurs and NGOs with projects that meet these criteria can reap benefits such as feedback from a panel of financial experts, expert advice on how to improve the pitch to investors, the opportunity to pitch in front of an investor panel (for finalists) and funding of up to €25.000 to perfect the business case.

In the 2014-2018 period, the Mobilizing More for Climate Challenge received more than 150 proposals for climate solutions in over 35 countries.

YearMobilising More Finance for Climate

Winner

2014 General 1. WakaWaka off-grid electricity2. FMO Climate Bonds

2016 General 1. Royal IHC Sustainable Seaweed harvesting in Indonesia2. OPIN Foundation Sustainable charcoal in Ghana

2017 General Emergi Solar-powered freezer

2017 Indonesia Aqysta Barsha Pump

2018 General To be announced at the GIIN conference on October 31st 2018

2018 Tanzania To be announced at the Mobilizing More Tanzania finals in Tanzania in November 2018

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MOBILIZING MORE CASE: SCALING UP SUSTAINABLE SEAWEED FARMING IN INDONESIA

Around the globe, there is increasing pressure on arable land; land use for food, feed, energy and nature compete with each other. The ever-increasing production of food, feed and energy crops are a major cause of deforestation. A problem intensified in the de-cades to come through population growth and changing food habits (more meat, more food waste) and energy usage as the average income rises.

Seaweed is a valuable source of food and energy which offers many solutions to the-se problems. Its production does not require land use and it is not affected by climate change phenomena such as droughts and floods. In Indonesia, Royal IHC identified an opportunity to modernize seaweed cultivation through the introduction of mechanized cultivation and modern agricultural techniques. This reduces the need for arable land and secures food and energy for the future. Furthermore, it can also provide a positive impulse to the local economy and the welfare of the farmers.

Royal IHC entered the Mobilizing More challenge in 2016 with a proposal to develop a 10 hectare pilot seaweed farm. Centres of production (cooperative-like groups) are created by farmers, making upscaling of seaweed farming possible, as the farmers organize, get access to financing and modern cultivation techniques. By adding processing steps to the value creation chain of seaweed farming, the local communities can keep a fair piece of the value creation.

The seaweed proposal won the 2017 Mobilizing More challenge and was awarded a prize of € 30.000. This prize money mobilized private finance with an estimated value of up to € 140.000. This includes both financial capital and in-kind donations for equipment, seaweed, installations and personnel for the pilot. One of the partners in the pilot, Sea-Tech Energy, has already expressed a commercial interest in the harvest.

“IUCN NL is persistent in what it wants to achieve

yet flexible in how to get there. For example, the

Mobilizing More Climate Challenge process was

developed in close collaboration with several

parties offering suggestions on how to set it up.

As a result, Mobilizing More now really plays a

role by connecting entrepreneurs, investors and

other partners needed to make concrete projects

investible and scalable.”

Paul van der Logt,

Dutch Ministry of

Foreign Affairs

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During the Mobilizing More Challenge process, IUCN NL partnered with a panel of experts to improve the business skills and pitches of the entrepreneurs. Here are some of their top tips to improve a pitch to invest in conservation solutions.

1. START FROM A CLEAR WHY• Explain what the problem is the project is trying to address;• Why this matters to you personally.

2. EXPLAIN THE HOW • How does your solution work? • How is it better or different from currently available solutions?• Which partners are needed to deliver your solution?

3. MAKE THE WHAT VERY CONCRETE• Who will buy these products and services?• What benefits do your products and services offer for these target groups?• What kind of money is needed to progress the idea?• What will be the return on this investment?

4. STRUCTURE THE STORY IN A LOGICAL WAY• Keep it short;• Use pictures and other visuals to tell the story.

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Strategy in Action: The Landscape Investment and Finance Tool The Landscape Investment and Finance Tool (LIFT) consists of a set of modules to help landscape initiatives define, develop and find finance for landscape priorities. The tool was developed together with EcoAgriculture Partners. It guides landscape initiative leaders to find the types of investors that might be interested in their landscape-specific business cases and to develop pitch materials to successfully secure investment. IUCN NL members such as Tropenbos International (TBI) and WWF Netherlands provided valuable input during the development of LIFT. International NGO Solidaridad has been involved in the initial tests of LIFT. By definition, integrated landscape investments contribute to multiple elements of landscape sustainability including production, ecosystems,

biodiversity, and livelihoods; yet they also rely on landscape stakeholders and investors to work collaboratively. Jan Willem den Besten, Senior Expert Sustainable Finance at IUCN NL outlines: “Despite the recent surge in sustainable finance most investors still use models focused on a single objective within a landscape, such as agricultural production, or ecosystem health. LIFT accommodates multiple objectives and multiple stakeholders.”

LIFT helps landscape leaders develop and prioritise investment cases, pursue suitable investors and assemble an efficient finance strategy for their landscape priorities. It helps landscape partners, project developers and potential investors overcome (financial) complexity. So all can benefit from successfully integrated landscape investments.

MOBILIZING MORE CASE: LIFTING REFORESTATION TO THE NEXT LEVEL IN CAGAYAN DE ORO

The Philippines are very vulnerable to climate change. The catchment area around the Cagayan de Oro river is very vulnerable to floods. It is affected by an increase in typhoons in the coastal area, and by river flooding due to deforestation and land degradation in the upper regions. The Cayagan de Oro River Basin Management Board was set up with the support of IUCN NL to tackle the problems with an integrated landscape strategy. One of the first decisions of the council was to stop deforestation, caused by the ever-increasing land use for agriculture.

NGO and IUCN member The Samdhana Institute has been the driving force behind this multi-stakeholder landscape initiative. Food company Del Monte is protecting soil through line planting and small dams. And companies situated on the coast, like Shell, are paying for the restoration of the mangrove forests, which can function as flood defen-se. Landscape restoration interventions are in progress, but the council wants to secure financial capital to scale up.

In 2017, Samdhana joined the Green Finance Academy. Through their participation in this course, they developed a proposal to secure private investments for landscape restora-tion. The key element of this proposal was the development of a cocoa agroforestry sys-tem with local farmers, on the degraded land in the basin. This proposal was one of the finalists of the 2017 Mobilizing More challenge. As a result, the Cagayan de Oro area was chosen as one of the test landscapes for IUCN NL’s Landscape Investment and Finance Tool (LIFT).

Even before the completion of the LIFT process, the first tests in Cayagan de Oro river basin have already led to collaboration with new partners including a local bank and a Dutch supplier of cocoa saplings.

“FMO has been involved in the Mobilizing More process from the start,

as a member of the panel that selects the finalists and the winner.

The business and pitch training provided by Mobilizing More were

valuable for the entrepreneurs. It enabled them to really improve their

business case to a commercially viable case with development impact,

to ultimately have a successful pitch towards potential investors.”

Elsbeth Bloemert, Fund Manager, FMO

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Strategy in Action: The Green Finance AcademyFinancial institutions and companies are increasingly interested in financing green, sustainable projects. Yet, despite a wealth of people with sustainable, green project ideas, there is a lack of investible projects.

In 2015, IUCN NL, Nyenrode Business University and Wageningen University & Research formed a partnership to develop the Green Finance Academy (GFA) masterclass. The objective of this masterclass is to train people who are developing sustainable projects which benefit nature. To help environmental and development professionals transform current and new projects into bankable projects that generate financial returns for investors.

The GFA masterclass offers interactive sessions with experts from both science and business. For example, Nyenrode provides expertise on how to market products and services, Wageningen University offers knowledge on agriculture and food. IUCN NL experts share their knowledge on biodiversity and provide access to a wide network.

Topics include business development, marketing, economic valuation of ecosystem services and private sector finance. It includes classical training as well as more experiential settings such as fireside talks. At the end of the five-day programme, the project developers pitch their projects to investors and the DAWCA start-up fund.

The GFA masterclasses took place in the Netherlands in November 2016 and March 2017. They were attended by 21 and 31 people respectively, hailing from countries around the globe such as Benin, Bolivia, Ethiopia, Ghana, Paraguay, the Philippines, Rwanda, Switzerland, Togo, Uganda and Vietnam. Dutch participants included people from several of IUCN NL’s member organizations, such as WWF Netherlands and BirdLife Netherlands (Vogelbescherming).

As an immediate result of these masterclass, the Ghanaian NGO A Rocha (featured on page 32) closed an investment deal with FORM Investments. FORM now finances a reforestation project which also

“What makes IUCN NL special is their

deep knowledge of nature which they

can apply to project assessments,

combined with their ability to convene

and connect people from different

backgrounds and continents.”Tineke Lambooy,

Professor at the Nyenrode Center

for Entrepreneurship, Governance

and Stewardship.

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invests in the sustainable production of shea butter. Also, Philippine NGO Samdhana was encouraged to develop its Cayagan de Oro reforestation proposition further, which is featured on page 27.

“What makes IUCN NL special is their deep knowledge of nature which they can apply to project assessments, combined with their ability to convene and connect people from different backgrounds and continents,” says Tineke Lambooy, Professor at the Nyenrode Center for Entrepreneurship, Governance and Stewardship. “I enjoy working with the IUCN NL team. They are

smart, dedicated, hardworking and really get things done. I am also inspired by the wealth of valuable information they share through their website and annual report.“

Senior Expert Romie Goedicke at IUCN NL: “In the years to come, the GFA will continue organizing masterclasses for project developers. We will also investigate a curriculum for people from the financial sector to better help them integrate the opportunities, benefits and risks of nature and natural capital into their decision-making. “

Strategy in Action: The DAWCA Start-up FundThe DAWCA programme includes a start-up fund of € 300,000. IUCN NL member Wetlands International was involved in the establishment of this fund. The table below show which initiatives have received support through the DAWCA start-up fund until now. Recipients include the winners of the Mobilizing More programme.

Initiatives Recipients Countries Amount granted

Climate neutral coffee Max Havelaar Ethiopia € 100,000

Recycled plastic drip irrigation systems DMS and Deltares Senegal € 50,000

Sustainable shea nut landscape programme FORM International, A Rocha Ghana Ghana € 40,000

Sustainable seaweed farming Royal IHC Indonesia € 30,000

Sustainable charcoal alternatives OPIN Foundation Nigeria, Ghana € 30,000

Solarfreezer Emergi Ivory Coast € 25.000

Barsha Pump Aqysta Indonesia € 25.000

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Ghana’s Northern Savannah landscape has witnessed increasing deforestation and land degradation due to unsustainable activities such as illegal harvesting, trade in commercial hardwood, and informal chainsaw logging for charcoal production. Land degradation is also common as a result of increasing pastoral activity from neighbouring countries, and intensified, unsustainable agriculture. Combined, these trends don’t just cause deforestation, forest degradation and soil degradation. They also lead to reduced germination of Shea trees, on which local communities, in particular women, depend for income and food security. Other issues are reduced pollination and illegal wildlife trade.

The Savannah Fruits Company entered into a collaboration with environmental NGO A Rocha Ghana. A Rocha Ghana facilitates a process through which local communities mobilise, plan and manage communal natural resources and reap benefits from them. This is done through several natural resource governance structures and instruments, supported by local and national legal frameworks. This approach is called a Community Resource Management Area (CREMA). Since 2013, The Savannah Fruits Company has actively contributed to the strengthening of this CREMA and the economic viability of the CREMAs and the economic viability of the community at large, by:

• Training women in more efficient Shea nut harvesting and processing;

• Training women on organic sourcing and handling the produce as organic Shea;

• Certifying the broader landscape where Shea trees grow and nuts are collected.

A Rocha Ghana brought the Shea tree programme as a case to the 2015 Green Finance Academy, organized by IUCN NL, Nyenrode and Wageningen University. As a result, the programme received €40.000 in funding from the DAWCA Start-up fund. In a later stage, it received an additional €60.000 funding through the Shared Resources, Joint Solutions programme.

The Savannah Fruits Company incentivises community action for sustainable management of the landscape through a volume-based incentive package for organic Shea nuts, benefiting both the individual trader and the community. This package feeds into a conservation fund, managed by the community to develop, manage and monitor the community-managed areas. The company also guarantees women a premium on their Shea nuts.

To conserve and restore the landscape, this approach combines the threats and opportunities that different economic uses of the landscape

DAWCA START-UP FUND CASE: RESTORING FORESTS IN GHANA THROUGH THE SHEA NUT VALUE CHAIN

represent. The project is currently being expanded into a landscape approach that will fight deforestation and contribute to reforestation through the involvement of a local forest services and timber development company: Form Ghana. Interestingly, Form and A Rocha first met during the 2015 Green Finance Academy. The first step has been to set up a nursery for Shea, to breed varieties with a shorter gestation period. Additionally, a mix with other

high-end tree species that produce non-timber forest product are being nursed and will be planted in community woodlots. These trees will also contribute to pollination and can will be a source of sustainable charcoal. This landscape approach progresses the Shea value chain to a viable, efficient and environmentally effective driving force towards the sustainable management of the Shea landscape in Northern Ghana and beyond.

“The DAWCA start-up fund enabled us to step

out of our comfort zone and start collaborating with a

value chain company and a plantation company. It’s

a challenge to combine conservation and economic

interests. We’re learning every step of the way.

From working with the private sector,

we’re now more agile and we’re integrating

economic thinking in our work.” Daryl Bosu,

A Rocha Ghana

Senegal faces pressing environmental problems, including deforestation, soil erosion and desertifi-cation. Senegalese entrepreneur Mamadou Diaw grew up in Europe and wanted to return to his country to solve two issues at once: 1) the need for better irrigation systems to restore the landscape and 2) the abundance of plastic waste. He used his technical expertise on plastics to develop a line of drip irrigation systems from recycled plastic. First re-actions to this idea were positive, but a key concern of NGOs and the local government was the level of pollution in the recycled plastics used. Would this pollute the water flowing through the irrigation systems? To make the drip irrigation system a mar-ketable product, its safety would have to be proven. DMS needed to check whether this use of recycled plastic would not form a threat to the environment or the health of consumers of the eventual agricultu-ral produce.

However, water safety testing requires a significant investment, which his small company DMS could not afford. With funding from the DAWCA start-up fund, Italian NGO LVIA and Dutch knowledge plat-form VIA Water, DMS was able to contract Deltares, an independent institute for applied water research. The Dutch institute saw the DMS case as an oppor-tunity to test its sampling methodology for soil and

water quality monitoring in Africa and could therefo-re offer reduced rates for the testing.

Collaboration has been essential to the develop-ments so far. Several test gardens were installed, including one with a potential customer. These de-monstrated that the drip irrigation systems work ef-fectively: the gardens were much lusher compared to traditionally irrigated gardens, while consuming less water. For another LVIA project in Senegal, DMS supplied 15 kilometres of drip irrigation tubes. The producers involved demonstrated the benefits of the irrigation systems. This also led to word-of-mouth advertising.

Testing of water and soil has not been completed yet, but the initial tests provide hope that the use of recycled plastic is possible without additional health and environmental issues. There is a lot of interest in the project both in Senegal and internationally; it has even been included in a BBC documentary. In the meantime, the DMS team has received and con-tinues to receive training on business management, marketing and finance. This will enable Mamadou Diaw to quickly expand his business once the testing has proven the technical qualities of the drip irrigation system.

“I applaud IUCN NL for its attention and dedication

to entrepreneurship in their conservation efforts.

They have a deep understanding of the needs

in African landscapes and clearly see a role for

entrepreneurs to be part of the solution. This project

has also created opportunities for our business,

testing the possibilities for passive sampling with a

local laboratory and creating many interesting

connections to fuel our knowledge and business.”

DAWCA START-UP FUND CASE: GREENING SENEGAL WITH RECYCLED PLASTIC

Cheryl van Kempen,

hydrogeologist and

GIS expert at Deltares.

CLIMATE SMART COFFEEEthiopia

AQUASOIL MOSAIC

LANDSCAPE RESTORATION

Ethiopia

HARRAR GREEN INFRASTRUCTUREEthiopia

SHEA PARK LANDSCAPE

RESTORATIONGhana

FEASIBILITY GOLD LANDSCAPE

RESTORATIONGhana

LANDSCAPE RESTAURATION PREPARATIONMorocco

SISHAL WASTE BIOFUELTanzania

RECYCLED PLASTIC IRRIGATIONSenegal

OFF-GRID SOLAR ENERGYKenya

GREEN INFRA-STRUCTURE Benin

SUSTAINABLE FARM-BASED CHARCOAL NIgeria

SOLAR FREEZER Ivory Coast

HYDROPOWER PUMPSSumba, Indonesia

SUSTAINABLE SEAWEED HARVESTINGFlores, Indonesia

DACWA PROJECTS

36 37

% of funds from DAWCA

% public money levteraged

% private finance leveraged

too early to assess

Total size:

250k - 1Million

> 1 Million

< 250k

ENGAGE

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The second pillar of our sustainable finance strategy is to engage investors to make them aware of their impact on natural capital, develop projects together that mobilize sustainable investments, and reduce negative impacts. We do this through raising the bar on ESG criteria and sector policies, and by making them aware of specific issues that arise from our landscape initiatives.

2.1 RAISING THE BAR ON THEIR SUSTAINABILITY CRITERIA AND STANDARDS

Our primary focus is on the Dutch financial sector. The Netherlands has a relatively large and mature financial sector. Dutch financial institutions have played a leading role in sustainable finance innovations, but there are still many opportunities to engage other institutions and to raise the bar with those already driving change.

We work with both frontrunners and mainstream investors to raise the bar for their sustainability criteria and standards used to inform their investment and lending practices. This includes pushing for compliance with existing voluntary and regulatory requirements and ambitions. We pay particular attention to investments in and lending to forest-risk commodities (such as palm oil, soy, beef) and the extractive industry.

We aim to have investors in the Netherlands and our focus countries:• Develop and apply robust Environmental, Social and Governance

(ESG) criteria, for their own business as well as that of partner banks and syndicated finance;

“Through knowledge and dialogue,

IUCN NL bridges the gap between ecosystems and

business. For business and the financial sector alike,

IUCN NL is a valuable, critical conversation partner

that gives nature a role in business models.

It helps the financial sector better understand

the value of ecosystems.”

Neera van der Geest,

FairClimateFund

ENGAGE WITH INVESTORS TO IMPROVE THEIR IMPACT ON NATURE

4140

• Commit to and comply with IFC’s social and environmental standards and other internationally accepted standards, including commodity and/or sector specific standards for agro-crops and extractives;

• Jointly distil success factors in order to share best practices and guidance with other financial actors;

• Raise the bar on engagement and compliance by Dutch and local banks at the level of specific landscapes where we work with our partner organisations.

Just like we do in all our private sector engagement, IUCN NL plays the following roles in working with the financial sector and other investors:• Convener of multi-stakeholder platforms;• Knowledge broker;• Driving force to raise the sustainability bar.

IUCN NL actively engages investors through our partnerships with organizations such as VBDO (the Dutch Sustainable Investment Forum), RVO (the Netherlands Enterprise Agency), the Dutch National Bank (DNB), our member organisations and our local partner organizations.

Our work with financial institutions and business in the Netherlands is closely linked with our work on landscapes. In many cases, it is quite challenging to help local financial institutions (including subsidiaries of international financial institutions) to understand the link between their investments and the impact on the ground. In conversation with the Dutch financial sector, the focus is on the how and what of including natural capital in business decisions. When engaging with the local financial institutions on the ground in emerging economies, often, that conversation still needs to start with the why.

“Investors have such a need for IUCN NL’s expertise

on topics like biodiversity, deforestation, water.

As they are on the ground in many landscapes,

they can offer real insights on what works and what

does not. I applaud IUCN NL for their ability to

constructively engage with the financial sector.”

Jacqueline Duiker,

Dutch Sustainable Investment

Forum (VBDO)

42

Strategy in Action: The SAGCOT Corridor in TanzaniaIn the SAGCOT Corridor in Tanzania, IUCN NL mobilizes capital to make sustainable initiatives happen. At the same time, we are influencing financial institutions to ensure that the money invested in SAGCOT is used with respect for sustainability principles. This makes Tanzania a powerful test case for bridging the gap between demand and supply of finance.

Strategy in Action: Partnership to reach investorsIUCN NL joined forces with the Dutch Sustainable Investment Forum (VBDO) to reach institutional investors, asset owners and SDG experts. A series of three masterclasses was held in 2017 and 2018. The objective was to create a deeper understanding and learn from each other on the opportunities and challenges around investing in the implementation of the Sustainable Development Goals. IUCN NL actively contributed to these events with knowledge and speakers.

IUCN NL also partnered with VBDO and our member WWF Netherlands to organize a sustainable finance week in April 2018, as part of the Shared Resources Joint Solutions program. During this week, NGOs and financial institutions learned from cases and from each other’s expertise on specific landscapes, countries and sectors.

2.2 ENGAGING INVESTORS ON SPECIFIC ISSUES

Through our landscape programs occasionally specific environmental issues are raised by our members and/or partner organisations, where investment by a Dutch investor has a strong negative impact on a specific landscape. We pay particular attention to investments in and lending to forest risk commodities such as palm oil, soy and beef, as well as the extractive industry. Based on the information from our members and/or partners, we engage in dialogue with the specific investor.

We offer our knowledge and insight into the issues in specific industries and landscapes, to raise awareness and to support the investor in their engagement with the investee to reverse the environmental impact. We do not immediately push for divestment, but first strive for active engagement to drive a change in behaviour by the investee. This work is mostly invisible to the outside world, as it involves a sensitive balance of trust and action.

“When I look into the future,

I envision that the IFC will have

developed new financial products

aimed at protecting and restoring

natural capital and biodiversity.” Jussi Tapio Lehmusvaara, Operations Offi-

cer (Blended Finance - Climate Business),

International Finance Corporation

45

“The DAWCA Start-up Fund

is a potential pipeline generator

for future funds.” Edit Kiss,

Althelia

To fight against tropical deforestation and to mobilise climate finance, IUCN NL collaborates with Althelia Climate Fund. Through the REDD+ programme, we fight for conservation, restoration and sustainable management of forests. REDD + is the United Nations Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries. It was launched in 2008 to enable countries, companies and other organisations to invest in the protection of tropical forests and the fight against deforestation in developing countries.

Collaboration between Althelia and IUCN NL started when Dutch development bank FMO first invested in the Althelia Climate Fund and established the connection. Since then, we support each other by making strategic introductions, sharing insights on new developments, and in the design of new standards and blended finance models to make investments in tropical conservation possible. We also collaborate to create demand for REDD+ projects. Together with the Dutch Confederation of Employers and Investors (VNO-NCW), IUCN NL set up the REDD+ Business Initiative (RBI), an initiative of Dutch companies that invest in REDD+ projects to achieve voluntary climate targets.

RBI member companies support Althelia’s REDD+ project in the Tambopata National Park, part of the Peruvian Amazon, which is the first flagship project of the initiative. Developed by IUCN member AIDER, the project, as well as protecting the park, finances the restoration of degraded land by planting cocoa agro-forestry systems with local communities and channeling the produce through a newly formed co-operative. This cocoa-agroforestry belt functions as a buffer for the Tambopata National Park and helps reduce illegal deforestation in the area. It pro-vides higher income and secure local livelihoods and brings back tree cover on degraded lands. RBI members financially support the project primarily through the purchase of verified emissions reducti-on credits.

CASE: ALTHELIA CLIMATE FUND

International REDD+ workshops organized by IUCN NL, have brought more projects to the attention of Althelia that were developed by members of IUCN. A promising example is the REDD+ Project for Ca-ribbean Guatemala. This project was supported in the past through IUCN NL’s land purchase program. Currently it is one of the flagship projects of Althelia Climate Fund, and the first REDD+ project in the world that managed to aggregate more than 1,000 landowners into a grouped REDD+ project whilst also creating new ecotourism and agroforestry opportunities.

IUCN NL and Althelia continue to work on the deve-lopment of a pipeline of investible projects, as well as the development of blended finance instruments that de-risk investments in nature conservation.

INFORM

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The work in landscapes, with entrepreneurs and the financial sector, fuels the learning and expertise in the field of sustainable finance. We take time to actively learn from our sustainable finance activities and programmes. We do this in a structured way to harvest new knowledge and insights. This enables us to share the knowledge and learnings within our network, beyond the development of our own tools.

From that knowledge base, we actively contribute to the develop-ment of tools and policies, both at the national (Dutch) level and inter-nationally. We do this trough active participation in expert networks and at key conferences, in close collaboration with our local mem-bers and others in the worldwide IUCN network.

Strategy in Action: The CPIC Landscape Working GroupThe Coalition for Private Investment in Conservation (CPIC) is a global multi-stakeholder initiative focused on creating the enabling condi-tions that make it possible to increase private, return-seeking invest-ment in conservation. It was founded by Cornell University, Credit Suisse, IUCN and The Nature Conservancy NatureVest. CPIC aims to facilitate the scaling of conservation investment by creating blue-prints for the successful delivery of investable conservation projects. CPIC connects providers of investible conservation projects with deal structuring support, and conservation project delivery parties with investors.

“Initially, CPIC focused on developing blueprints for

single-sector investments such as forestry, landscape

restoration and coastal water. However, reducing impact

across a landscape requires a more integrated approach,

which IUCN NL actively promotes. Therefore, IUCN NL

is setting up a landscape working group within CPIC to

explore how blueprints can be refined and

applied in integrated landscape programmes.”

Jan Willem den Besten,

Senior Expert Sustainable

Finance at IUCN NL

INFORM (INTER)NATIONAL TOOL AND POLICY DEVELOPMENT

51

Strategy in Action: Fuelling Dutch Policy DevelopmentInsights from our sustainable finance work actively contribute to IUCN NL’s input into the Dutch government policies, such as the aid and trade policy. Over the years, IUCN NL and its partners witnessed that environment and biodiversity – the green aspects of sustainability - were often underrepresented in proposals submitted to govern-ment programmes aimed at leveraging private finance. This includes programmes like the Dutch Government’s Sustainable Water Fund programme (FDW) and the Facility for Sustainable Entrepreneurship and Food Security (FDOV).

Also, in the initial aid and trade policy, the Dutch government did not prominently include the protection of ecosystems and biodiversity.

IUCN NL therefore used its formal and informal channels with the Dutch government to encourage support for sustainable solutions. Our input is based on experiences with DAWCA, SUSTAIN AFRICA and other stra-tegic partnerships. Our recommendations were considered during the de-velopment of the current

aid and trade policy. We continue to influence and join the discussi-ons on the design of the new Dutch Green Climate Fund and other support by the Dutch government for climate and SDG finance.

“Partnership and collaboration are key to drive

change for a more sustainable world. We have to let go

of competition and our egos and instead combine

our capabilities for our one planet. We need to put

eco before ego! IUCN NL is clearly eager to do so.”

Caroline van Leenders, Netherlands Enterprise Agency, RVO

52

develop business cases. Participating local NGOs will be better able to connect with the local financial sector to increase awareness and action.

This requires close collaboration and alignment among the key actors in government, industry and the financial sector. NGOs play a pivotal role in this because they bring together expertise and knowledge on ecological pre-conditions, natural capital and planetary boundaries; and because they bring together networks of actors for-profit, non-profit, science and government organizations. NGOs also provide the ability to convene multi-sector dialogue and collaboration.

Such strategies at the landscape level can only attract investment if public and private investments are blended:• Public investments for the necessary enabling

environment;• Public and private investments for innovation and

business incubation;• Private and blended finance for asset investments.

We look forward to further developing this in the near future. Possibly through a second DAWCA programme. Definitely in collaboration with our members and with new and existing partners around the world.

“We work with many partners not only to

develop blended finance, but to also blend the

objectives of all parties involved to truly work

towards sustainable development. This way, we

move beyond just blended finance; together

we can deliver blended impact.”

Going forward, we will further focus our efforts to create investible landscape initiatives in the specific landscapes in which we already work. For these specific landscapes, we will organise calls for proposals through the Mobilizing More process, tailored to the specific landscapes. This will be organised in collaboration with local partners, such as the local Dutch Embassy, companies and incubators. Annually, we will develop one or two landscape-specific Mobilizing More programmes. We will call on entrepreneurs, companies and NGOs to come up with solutions for problems that are identified by the multi-stakeholder collaboration within each landscape. Solutions and Mobilizing More calls will focus on addressing these specific land use issues, such as sustainable agriculture and agroforestry, sustainable watershed protection, green infrastructure, ecosystem protection and restoration. In all cases, an integration of solutions will be needed.

As in earlier Mobilizing More programmes, we will support promising entrepreneurs with training on business development, management and pitching to potential investors. To increase knowledge, we will also organize local Green Finance Academy sessions for entrepreneurs and local partners. Participating entrepreneurs will strengthen their capabilities to

WHAT’S NEXT

Philippe Puydarrieux,

IUCN Science and Economics

5554

Civil society organisations (CSOs): the multitude of associations around which society voluntarily organises itself and which represent a wide range of interests and ties. These can include community-based organisations, indigenous peoples’ organisations and nongovernmental organisations (NGOs).

Financial sector: the set of institutions, instruments, and the regulatory framework that permit transactions to be made by incurring and settling debts. This includes banks, investment funds and insurance companies.

Investment: an allocation of financial assets with the expectation of a return in the future. This report focuses specifically on the investment of financial capital in projects striving to restore or protect natural capital.

Investors: parties that provide financial capital through investment (as opposed to charitable donations or subsidies). This could be an institutional investor for financial return, but also a public entity investing in infrastructure, or a company investing in new research and facilities.

Landscape: a socio-ecological system that consists of a mosaic of natural and/or human-modified ecosystems. Its boundaries may be discrete or fuzzy, and may correspond to watershed boundaries, distinct land features, and/or jurisdictional boundaries, or cross-cut such demarcations. A landscape can encompass an area from hundreds to tens of thousands of square kilometres.

Landscape approaches: seek to provide tools and concepts for allocating and managing land to achieve social, economic and environmental objectives in areas where agriculture, mining and other productive land-uses compete with environmental and biodiversity goals.

Landscape investment: an allocation of financial capital in socio-economic actors operating within a landscape.

Multi-stakeholder dialogue: an interactive communications process that involves all types of stakeholders in decision-making and implementation efforts.

Net-positive impact: achieving net gains for biodiversity from project outcomes. It prioritizes impact avoidance and mitigation, as well as rehabilitation, above biodiversity offsets.

Sustainable finance: any form of financial service integrating environmental, social and governance (ESG) criteria into the business or investment decisions for the lasting benefit of both clients and society at large.

GLOSSARY OF TERMS USED IN THIS REPORT

56

For the content and quotes in this publication, we would like to thank the following people for their contribution:

• Caroline van Leenders, Netherlands Enterprise Agency (RVO)• Cheryl van Kempen, Deltares• David Sol, Aberdeen Standard Investments• Edit Kiss, Althelia Funds• Elsbeth Bloemert, FMO• Frank Hawkins, IUCN Washington D.C. Office• Gerard Bos, IUCN Business and Biodiversity• Hessel Schuurman, Watrix• Jacqueline Duiker, VBDO• Nanno Kleiterp, European Development Finance Institution• Neera van der Geest, FairClimateFund• Paul van der Logt, Dutch Ministry of Foreign Affairs• Philippe Puydarrieux, IUCN Science and Economics• Tineke Lambooy, Nyenrode Business University

THANK YOU FOR INVESTING YOUR INSIGHTS AND TIME

COLOFON

Text: The Terrace & IUCN NLCreative concept: The Terrace

IUCN NL (IUCN National Committee of The Netherlands)Plantage Middenlaan 2K, 1018 DD Amsterdam

The Netherlands

mail@iucn.nlwww.iucn.nl

Jan Willem den Bestenjanwillem.denbesten@iucn.nl

Romie Goedickeromie.goedicke@iucn.nl

Maxime EiselinMaxime.eiselin@iucn.nl

Heleen van den Homberghheleen.vandenhombergh@iucn.nl

Fanny Verkuijlenfanny.verkuijlen@iucn.nl

IUCN NL’S SUSTAINABLE FINANCE TEAM

5958

GET INVOLVEDENTREPRENEURS

Are you working on innovation in agriculture, agroforestry, forestry, landscape restoration, integrated water management, green infrastructure, sustainable energy solutions and other innovation that can be integrated along with other solutions in landscape programmes? If you think your solutions might be applicable in one or more of the landscapes in which we work, check out our Mobilizing More programme via www.Mobilizing More4climate.org. or contact Fanny Verkuijlen, Expert Green Economy

FINANCIAL SECTOR

If you’re interested in compliance with existing standards and raising the bar, please contact Heleen van den Homberg, Senior Expert Green Economy.

Are you interested in sustainable investment opportunities? Are you willing to contribute to the development of landscape investment plans or blueprints? For more information, contact Jan Willem den Besten, Senior Expert Ecosystems & Climate.

OTHER COMPANIES

Do you want to start applying natural capital accounting? Or understand more about the planetary boundaries that apply to your business? Please get in touch with Romie Goedicke, Senior Expert Green Economy.

Do you aspire to contribute to the scaling up of sector- or landscape-wide certification? Please contact Oscar Sabag, Expert Green Economy