Using nature to help cities
In Washington, D.C., for example, we're using nature to manage stormwater runoff—a major issue in many cities around the world.
Paving the way for TNC's work, D.C.'s local government in 2013 instituted a stormwater cap-and-trade policy mandating that anyone renovating or building new construction meet strict stormwater retention standards. Fortunately, developers can use offsite natural—or green—infrastructure to meet up to half that requirement.
NatureVest, TNC's impact investing unit, and Encourage Capital—NatureVest's co-founder in this venture—are using impact capital to create a local company that will finance and develop projects in areas of D.C. that would most benefit from nature-based solutions to stormwater runoff. Those projects will generate stormwater retention credits, which developers can purchase to meet D.C. requirements. Credit sales will generate returns for investors. Buying these green infrastructure credits is attractive to developers for several reasons:
Developers get more value from these offsite natural solutions. Onsite infrastructure, such as green roofs or underground cisterns, is often more expensive and can reduce the amount of space available for desirable amenities such as parking spots and public roof space.
Green infrastructure begins performing right away, immediately retaining and filtering stormwater. Large-scale municipal gray infrastructure projects could take years to deliver results.
Nature-based solutions appreciate in value as plants grow, increasing their capacity to absorb stormwater, while gray infrastructure depreciates.
Projects like this create returns that benefit investors, the environment and communities. Here are three ways we as an organization benefit from impact investing, too.