Conservation in Canada is a no-brainer. The country is blessed with extensive natural spaces and biodiversity, and there are a wide range of sustainable resource management, ecological restoration, and conservation activities already underway in various landscapes. Nationally, we have bold conservation and stewardship goals, such as the Global Biodiversity Framework commitment to protect 30% of oceans, lands, and freshwaters by 2030.
Nature forms the life support system of the planet, and provides us with countless environmental, economic, social, and cultural benefits that are necessary for well-being. You would think that investing in maintaining such a critical system would be instinctive, but that is not always the case. While conservation efforts have made considerable strides, achieving our goal of halting and reversing nature loss will require funding beyond what is currently available in the public purse and from philanthropy, necessitating innovative financing approaches and substantial contributions from the private sector. Of course, not all private sector investment is equal, and should not be embraced blindly: rather, investments need to be aligned with the values of those who steward the land.
Here are ten reasons why conservation finance is required to reach our nature and biodiversity goals:
Conservation has been chronically underfunded. In Canada alone we require $15-20 billion US ($20-27M CDN) in additional funding annually to meet our targets, about five times what is currently being spent. Growing the pool of public and philanthropic funding is important in closing this gap, but to finance nature-based solutions for a better future, we need to broaden the spectrum of investors and attract new funds, including significant contributions from the private sector. This is where conservation finance instruments like trusts, bonds, project finance for permanence, and biodiversity credits come in. These are intended to provide sustainable funding streams, and/or provide a return on investment, thus attracting private investment by aligning financial incentives with environmental goals.
Corporate commitments for climate and biodiversity objectives, as well as increasing demands for disclosure on these issues, is prompting private organizations to rethink how they measure, manage, and mitigate their environmental impact. This is leading to increased interest in investing in nature-positive activities, and presents an enormous opportunity to strike while the iron is hot. Much of the current motivation for private investment in nature is driven by commitments to net-zero or net-positive climate and biodiversity goals, alongside a changing trade environment such as the EU Deforestation free regulation, and emerging nature disclosure requirements like the Task Force for Nature-Related Financial Disclosures. These reporting requirements are causing private companies to assess their impact on nature, and investigate how conservation and restoration activities can improve their operations, employee retention, financial performance, and achieve their Environmental, Social and Governance objectives. Conservation finance tools present collaborative opportunities to ensure that this interest is channeled into projects that meet the interests of environmental objectives and benefit local communities.
Many companies have significantly contributed to environmental degradation and climate change. By channeling funds into nature, the private sector can help play its part in reducing negative impacts – including habitat loss, land use change, agricultural expansion, and unsustainable land use practices – while simultaneously narrowing the financing gap.
Conservation finance instruments are designed to attract multiple sources of funding often resulting in blended arrangements where different types of capital—such as public, private, and philanthropic funding—are combined. Diversifying funder types can help reduce financial insecurity, and conservation finance instruments produce income, returns, or revenue streams for ongoing activities, which provide more stability compared to grant funding. A wider portfolio of funding sources supports resiliency. This is particularly important in the establishment of Indigenous Protected and Conserved Areas (IPCAs), where we have historically seen an initial injection of funds followed by a lack of funding for ongoing operations and stewardship. Demand from the private sector can increase the pace at which conservation finance instruments are implemented – which is important, when faced with the urgency of biodiversity and nature loss.
When private investors get involved, they can bring fresh perspectives and resources that can drive novel solutions. For instance, they might promote the development of activities that are good for conservation and that are financially viable. This is because these activities would be designed to generate steady cash flow, which makes them attractive investments. They can also support the creation of new financial instruments that offer an attractive risk-return profile as well as a positive environmental impact. These innovative instruments can reduce risks and improve returns, appealing to a wider range of investors and potentially be replicated in other regions or sectors.
Public and philanthropic funds alone might be insufficient to scale up conservation efforts, but they can be used to catalyze private investment. In this way, private investment can create a multiplier effect, leading to greater overall impact as public funds are freed up to stimulate additional activities (and attract additional investment). It can also free up donor funds for other nature projects that do not generate revenue but that still require dollars in order to happen. For example, $15M from philanthropic and private donors leveraged an additional $15M from the government to create a trust fund to manage Thaidene Nëné National Park Reserve, and the necessary funds would not be possible with public or private funding alone.
Companies that have a tangible environmental footprint will likely have past conservation experience. These potential private investors can draw on relationships that may already exist with Indigenous communities and environmental organizations, in order to move more quickly towards action. They will be familiar with the need to ensure that benefits of activities and investment go to communities. They may also have more internal capacity to help navigate some of the complexities of setting up conservation finance instruments, such as articulating the impacts/outcomes of activities. However, decision-making needs to stay with conservation and stewardship experts, especially Indigenous stewards who have extensive knowledge and experience. Investors and project developers must consider issues surrounding access, equity, and justice. This is why participation, coordinated action, capacity building, and commitment from Indigenous partners, local communities, as well as a suite of public and private sector actors are needed to collaborate on effective solutions.
The adage goes, “Every job is a climate job”, meaning that the problems and solutions go far beyond those in environmental sectors. The same is true for nature. Faced with the existential threats of climate change and biodiversity loss, there is a call for every single person to play a role in safeguarding nature. This means we need philanthropists, scientists, Indigenous rightsholders, government decision-makers at all levels, conservationists, and, yes, the private sector. To go further, collaboration between all of these players is at the core of conservation finance. This collaboration fosters diverse perspectives and expertise, leading to creative and effective solutions for conservation challenges. Partnerships can provide training and resources to build the capabilities of various stakeholders, strengthening conservation efforts overall.
Failing to protect nature and account for the benefits generated by healthy ecosystems puts economic prosperity for communities, regions, and businesses at risk. Private sector companies have a vested interest in protecting a healthy environment because the natural world is integral to their operations and the global economy. About half of the global economy relies on natural resources and ecosystems, including the services they provide, such as clean water, air, and fertile soil. By investing in conservation efforts, private sector companies can help ensure the sustainability of the resources on which they rely. Moreover, investing in nature and utilizing conservation finance instruments can lead to tangible economic benefits. New economic opportunities can emerge, allowing communities to diversify their economies. Instead of relying solely on extractive industries, which often deplete natural resources and harm ecosystems, communities can pursue sustainable alternatives that create jobs and foster economic growth. This shift opens up pathways for economic prosperity that are not only environmentally-friendly but also economically viable in the long term. Across Canada, Indigenous Nations – from the West Coast to Nunavut – are leaning into this opportunity and building conservation-based economies.
While there remain challenges and barriers to mobilizing private investment at the speed and scale necessary, we know that it can be done. We see it happening in successful examples of conservation finance around the world. There are more mature markets, like the US, and if we emulated a more active market tailored to the Canadian context, we would see economies of scale in conservation finance. Success could lead to more success, until we reach our collective goal of increasing our investment in nature fivefold. Well-funded conservation promises us invaluable environmental, economic, and social benefits. Environmental benefits include mitigating and adapting to climate change, and reversing biodiversity loss. People and species alike benefit from ecosystem services like carbon sequestration, improved air and water quality, reduced erosion, and habitat restoration for bird species. What’s more are the social benefits, not just in areas with so-called wilderness, but people in all settings, from improved physical and mental health to widespread access to nature to the restoration of communities’ urban and peri-urban areas. Economic benefits include job creation, enhanced tourism, improved forestry, agricultural or fishery productivity, and increased property values. When done well, conservation centres Indigenous stewardship and sovereignty, supporting reconciliation, cultural heritage, and resilience. This can also mean improved access to traditional foods and medicines supporting Indigenous health practices and cultural preservation, and the reconnection of Indigenous communities with their ancestral lands.
So will conservation finance solve all of our problems? Investment presents us with tremendous potential to provide economic returns alongside environmental, cultural, and social benefits, which means new and different funders can come to the table. But, no, conservation finance is not a silver bullet. For one, conservation finance practices are not always the best way to fund certain types of activities. Funding species-at-risk, for example, is necessary regardless of a financial incentive. Nevertheless, funding needs to come from multiple sources including the private sector, for the ten reasons outlined. By driving a significant increase in the funding going to conservation and stewardship projects and activities, the people stewarding land and animals are able to better do their work, and collectively we can work towards our biodiversity goals.