Climate Week Speakers Say Investment Needs to Be Aligned with Nature

By Kat Friedrich

When the rubber meets the road, nature-based climate solutions are difficult to justify to investors without adequate metrics. That was the consensus of the speakers who participated in the Green Horizon Perspectives virtual event, “The Next Frontier: Investing in a Nature Positive Economy,” during the morning of the second day of Climate Week NYC.

Speakers during the “Nature Positive Solutions and the Role Finance Can Play on the Transition in our Food Production System” session said soy farmers in South America can make more nature-positive choices if the economic incentives align. 

“Humanity faces a fundamental choice,” said Partha Dasgupta, emeritus professor of economics at the University of Cambridge. “There is no escaping the fact that we are collectively damaging nature at a high rate.”

“We could take a different path where we engage more sustainably with the world around us. Our descendants deserve nothing less,” Dasgupta said. “We need to change how we think, act, and measure success.”

Other panelists said their organizations are looking at how to quantify nature-positive investments in financial terms and believe these investments add value for ecosystems.  

“Carbon is still a frontier market for most investors,” said Joke Hoffman, COO at BioCarbon Partners. “The challenge is to find what we refer to as patient investors… and to find the right financing strategy and the appropriate investor to scale funding to Africa.” 

Frontier markets are markets that are considered more marginal and less reliable than established markets.

Hoffman said when investors only pursue carbon credits, they focus too narrowly and this often leads to inequitable deals at multiple levels. 

Carbon credits were of strong interest to Annick Jackman, executive director of National Trust for the Cayman Islands, who wants to protect coastal mangroves. “One financial model we are excited about is our carbon-offset program,” she said. 

In this trading model, mangrove protection would be financed with carbon offsets that would be traded internationally. These offsets would allow organizations to put more carbon dioxide into the Earth’s atmosphere through industrial processes and other activities while still meeting climate goals. 

“Mangroves protect coastlines, ecosystems, and local communities,” said Phyllis Kurlander Costanza, CEO of UBS Optimus Foundation. “They also protect the climate by storing remarkable amounts of carbon.”

UBS Optimus Foundation has started a Climate Collective that is supporting mangrove habitats, Costanza said. ”We’re gathering like-minded teams of philanthropists. We don’t expect this to remain exclusively in the realm of philanthropy.” 

Preserving trees is a focus of the Tropical Forest Alliance. Its executive director, Justin Adams, spoke about both forests and farming at Climate Week NYC today.

Market pressures can incentivize farmers engaging in deforestation in Latin America, according to Wei Peng, assistant professor of international affairs and civil and environmental engineering at Penn State. “These market dynamics are continually evolving.” 

Peng described the challenges involved in influencing soy farmers. She said technical support and ongoing monitoring can go beyond finance to help farmers follow through to improve their practices.