“There’s this bias towards high tech. It’s like we believe the answer to climate change is going to be in technology and man-made solutions,” says Diane-Laure Arjaliès, Associate Professor at the Ivey Business School, Centre for Building Sustainable Value, in Ontario, Canada, and Research Partner for the Deshkan Ziibi Conservation Impact Bond (DZCIB) project.
DZCIB is a multi-stakeholder initiative set up in January 2019 to fund conservation work in southern Ontario. The project brings together First Nations, multinational corporations, impact investors, non-profit organisations, habitat partners and academic researchers to accelerate green, healthy and resilient landscapes to address climate change.
“Natural infrastructure is 30% of the climate solution, and yet it only makes up 5% of the conversation and funding. It’s something that goes under the radar. It’s not like a space rocket that gets headlines easily, but it is something that is solving the climate crisis. It’s an ancient technology,” says Michelle Kanter, Executive Director at Carolinian Canada, DZCIB Project Facilitator.
Collaborating to protect habitats
Southern Ontario has high rates of industry, agriculture and urban development, with just half the 30% habitat levels laid out by the UN’s global Sustainable Development Goals. Kanter says: “This region is a living laboratory for what’s happening in the world with the loss of habitat. We also steward one-fifth of the world’s fresh water, so it’s an excellent region to develop and test tools that can be scaled up more widely.”
Charity Carolinian Canada was in talks with local First Nations and other groups in its network about ways to accelerate conservation work when it was approached by an Ivey Business School student with an innovative funding idea that evolved into a conservation impact bond.
At the same time, the charity was approached by a local impact finance organisation looking for conservation investment opportunities. The finance organisation agreed to bankroll a small pilot so they could learn by doing. Kanter says: “All the partners came together in a really strong way because we all had a vision for trying something different to address the climate and extinction crises.”
Kanter believes the key to the project’s success has been the stakeholders coming together with open hearts and minds. She says: “The stronger the network, the stronger the collective impact. Creating ethical space is so important, where you really listen to others’ goals and everyone feels encouraged to share. Focusing on building that relationship and trust is critical.”
The conservation impact bond works on a pay-for-success financial model, meaning once the agreed-upon environmental and social outcomes are achieved, the private and government funders will pay for the project costs, gaining an additional profit margin of 3% to 5%.
Connecting investors with Indigenous and conservation goals has been the biggest challenge and biggest success of the project so far.
Kanter says: “We started inviting investors to our annual forums alongside Indigenous leaders, and it completely transformed our forums from something very depressing to something very hopeful. People want ethical green investment. It then became about how we create a shared language between these sectors, who have completely different terminologies, different processes and different worldviews.”
By uniting many on-ground partners and prioritising Indigenous communities, DZCIB was able to create investment portfolios of the size investors were looking for, meaning the team could finally access the income they needed to expand their conservation work.
“Indigenous people make up 6% of the world’s population, yet they protect 80% of global biodiversity. They have important knowledge,” says Arjaliès.
Looking ahead, there are plans afoot for phases two and three of DZCIB, with more and more partners showing an interest in expanding the programme’s geographical area. Great news for the DZCIB and the planet.
- Find out more about the DZCIB project and the leadership team’s future plans.
- Find out more about the Finance for the Future Awards.
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