ESG Investing Nature Conservation
Environmental protection and restoration is not only affordable, but can also be profitable. By treating nature as a valuable asset, the mainstream investment market is moving away from seeing nature as a commodity, with positive returns all around.
Better Conservation of Nature
What would it take to protect 570,000 hectares of natural forest in Peru from slash-and-burn agriculture and illegal mining? A conducive regulatory environment, innovative project developers, and, of course, significant investment. We support conservation projects such as these with our Nature Conservation Note: A 10 million US dollar initiative aims to restore this high biodiversity area in the Peruvian Amazon. By producing certified deforestation-free organic cocoa and gaining valuable carbon credits from avoided deforestation, financial and environmental sustainability can be achieved. Truly sustainable market growth that delivers measurable conservation benefits is in the interest of all.
One major challenge to the better conservation of nature is the lack of available funding. An estimated 300 billion US dollars is needed annually to preserve healthy ecosystems. The good news is that individuals, institutional investors and even mainstream retail investors could supply as much as that if they redirected only 1 percent of any new re-invested investment capital per year to preserve the world's most important ecosystems and biodiversity.
Conserving Nature through Investments
Conservation finance, as we understand it, refers to capital that is invested in an ecosystem in order to generate one or several cash flows. This structure permits the underlying natural capital to be protected in the long term while at the same time providing the investor with a financial return. Conservation finance thereby creates new, long-term, and diversified sources of revenue that can play a major role in environmental protection, ensuring biodiversity conservation and the health of natural ecosystems.
Since the launch of the pioneer study “Conservation finance. Moving beyond donor funding toward an investor-driven approach” co-authored with WWF and McKinsey in January 2014, Credit Suisse has played a considerable part in shaping the financing of nature conservation, offering investors cutting-edge investment products and services that help to conserve and restore nature.
Building on proprietary research in the field of conservation finance, Credit Suisse joined forces with Althelia Ecosphere to launch the Nature Conservation Note in December 2014 – the first bank to develop a conservation investment product. The Nature Conservation Notes make it possible to support conservation activities and the economic development of local communities in about a dozen countries. Among the projects is the protection of the mentioned Peruvian forest.
This innovative product generates financial returns for the fund’s investors through the sale of sustainably certified commodities as well as from payments for ecosystem services. Social and environmental impacts are generated through the financing of community-based organizations, biodiversity, and water conservation, as well as climate change mitigation. Credit Suisse and Althelia Ecosphere’s Nature Conservation Note was named as the “2015 Sustainable Forestry Deal of the Year” by the leading news and analysis service Environmental Finance.