A new first-ever survey of conservation impact investing reveals a market of approximately $23 billion across just the last five years, and finds that investments in this space are expected to more than triple over the next five years (2014-2018). However, the report also finds that a substantial amount of potential private capital has not been deployed, demonstrating a need for a significant increase in the number of risk-adjusted investment opportunities.
The survey shows that the approximately $23 billion committed to conservation impact investments from 2009-2013 fell into three main categories:
- Water quantity and quality conservation, including investments in 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
- Habitat conservation, including investments in the protection of shorelines to reduce coastal erosion, projects to Reduce Emissions from Deforestation and Degradation (REDD+), land easements and mitigation banking.
Other Key Findings:
- Of the three categories of conservation investment studied, Development Finance Institutions (DFIs) invested largely in water quality and quantity projects ($15 billion), while private investors invested largely in sustainable food and fiber production (about $1.2 billion)
- Of the nearly $2 billion already invested by private investors, 80% came from only 10 sources
- Private investors expect to deploy $1.5 billion of already-raised capital over the next five years, and to raise and invest an additional $4.1 billion
- The total market is expected to increase to $37.1 billion in the next five years
- While there is not a shortage of money for conservation impact investment, surveyed investors say there is a shortage of investable projects and opportunities for impact investment in the market. They say that they need more deals with adequate risk-return ratios, and seasoned management teams.
The report, “Investing in Conservation: A landscape assessment of an emerging market,” was co-authored by EKO Asset Management Partners and The Nature Conservancy’s NatureVest division. It was overseen by a steering committee that also included the David and Lucile Packard Foundation, The Gordon and Betty Moore Foundation, and JPMorgan Chase & Co. The report presents findings from a survey of 56 investors, including five for-profit and nonprofit development finance institutions (DFIs) and 51 private investment organizations.