The Nature Conservancy’s CEO on How to Scale Up Investments in Nature

On November 26, 2018, Mark R. Tercek, CEO of The Nature Conservancy, delivered the following speech at the UN Environment Finance Initiative’s biennial Global Roundtable in Paris, France.

 

Good afternoon. I’ve been asked to identify what we need to do to scale up investments in nature.

It’s a question I think about a lot. I spent 24 years working as an investment banker and the last 10 years as the CEO of The Nature Conservancy. This is what I think about. And this is what I want you to start thinking about more.

Let’s start by looking at the state of nature and how we view the challenges facing it today.

I am going to assume that you are familiar with the headlines from two recent reports — the IPCC report on 1.5 degrees and WWF’s Living Planet Report. These rigorously analyzed reports plainly state the risks: if we maintain a business-as-usual approach, the world is on a self-defeating trajectory.

We are using up natural resources faster than nature can replenish itself. But you all know that.

So let me look ahead for a moment. The Nature Conservancy, partnering with the University of Minnesota and several other academic organizations, looked ahead to 2050 and analyzed two different futures for the world: one business-as-usual scenario, and the other, a sustainability scenario.

The good news is that a sustainable world in 2050 is possible. What’s more, we can achieve it with existing technologies and without major tradeoffs between environmental health, economic growth, and human development.

Yes, we need to make some big changes, starting with our energy and food systems, but we can have a more prosperous and sustainable world in 2050—a world that sustainably produces 50% more food and 50% more energy than today to meet the needs of around 10 billion people.

The key message from TNC’s analysis is that people and nature can thrive together—but neither will thrive unless the other does too.

Closing the Conservation Finance Gap

Now, let me turn to the question of finance. I want to talk about one of conservation’s biggest challenges: how to pay for protecting nature at scale to ensure we reach that sustainable world in 2050.

Let me start by identifying the five essential things I think we need to do to close the conservation funding gap:

• First, we need to be far more effective at influencing government policy. We need policy and programs that support investments in nature.

• Second, we need to better harness science to produce the data and evidence that will convince key decision makers to invest in nature.

• Third, whenever possible, we need to organize our projects and initiatives in ways that generate cash flow.

• Fourth, we need to be much more active and creative in financial engineering.

• And fifth, we need even more collaboration across sectors.

In sum, we all need to become—excuse the parlance—Investment Bankers for Nature.

A Closer Look: Government Policy

I don’t have time to go into each of these in detail, so I am just going to focus on two very important ones.

Number one — by far the most important tool we have is government policy. I know some people don’t like to hear that right now. Every day, it seems the news tells us that some of our governments are somewhat dysfunctional.

But look past the headlines, and you’ll find many examples of the policies we need. I’ll highlight four very encouraging examples of effective government policy.

The first is putting a price on carbon. For example, in the U.S., although we are lagging in many respects on the regulatory front, California has emerged as a great leader. Their cap and trade program is up and running. Carbon emission are down sharply. And the economy is growing strongly. But more importantly for the purposes of my argument today, their cap and trade program allows for forest offsets. And this has resulted in about $650 million of funding for forest conservation and other natural climate solutions.

Second, let’s make sure every country enacts policies to require the use of the mitigation hierarchy: avoiding, minimizing, then mitigating impacts to ensure that infrastructure investment is sustainable. It’s not as well-known as it should be, but it’s a fact that infrastructure can indeed be done the right way. Better business outcomes and better environmental outcomes are possible, so long as the necessary upfront planning takes place.

Third, let’s make sure governments are incentivizing climate-smart agricultural intensification.

And finally, we need policies that recognize—and even incentivize—the use of natural infrastructure, such as expanded urban greening for stormwater management or reef and wetland restoration to reduce coastal risks from extreme storms.

Let me emphasize again: effective policy is the most important tool we have to make sure capital flows in sustainable ways. And for the financial institutions in the audience today, please focus on making investments in nature happen—and also pushing for the government policy that supports such investment flows.

A Closer Look: Harnessing Science for Data

The second area I want to focus on is the need for better science, evidence, and data to convince governments and businesses to invest in nature.

The better and more precise we are about what nature can do, can’t do, and what exactly it will cost, the more likely we are to drive significant investment flows.

This is an area where we’re making very good progress, and I want to emphasize now just how important data and evidence are to unlocking new sources of capital.

Read Mr. Tercek’s full speech here.

 

Mark Tercek is Chief Executive Officer of The Nature Conservancy (https://www.nature.org), the global conservation organization known for its intense focus on collaboration and getting things done for the benefit of people and nature. He is the author of the Washington Post and Publisher’s Weekly bestselling book Nature’s Fortune: How Business and Society Thrive by Investing in Nature.

Follow Mark Tercek on Twitter @MarkTercek