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“We cannot solve our problems with the same thinking we used when we created them.” Albert Einstein.

Landscape Finance Lab Founder, Paul Chatterton, delivered a keynote at Forestry & Agriculture Investment Summit, May 2021. His core message, the working philosophy of the Lab, pushes us to go beyond project level approaches into landscape contexts.  Suggesting the right tools for the ecosystem challenges we are facing can be summarised into three areas:

  • go beyond projects and integrate them into an ecosystem scale
  • reframe finance to work at the scale of nature
  • focus metrics so we can really track what we are delivering for nature

Embedding your nature based solutions in a landscape program is key.

If we’re going to secure nature, we have to develop tools at the scale of ecosystems, project approaches do not work at this scale. While not always the case but with an increasing focus on nature-based solutions (NbS), which are often at the project level, we will face challenges as they are smaller scale, shorter term, sector locked and competitive.

How do we resolve that? We think at the scale of the landscape. Landscapes work at an ecosystem level, over a generational timeframe, integration creates synergies and it is key they are locally owned. This might sound like a pipe dream but this is actually starting to happen with tools that are available.

Shifting from the project approach to landscape level

First of all, we have to start integrating our practices. A traditional pitfall with landscape conservation is that we get money for a year, three years, five years, spend it and then run out and go looking for more money and often a donor wants to go in a different direction. So, we lose track. The conservation world now, is starting to shift to the landscape approach as a way of moving forward and avoid this cyclical challenge.  Increasingly we are also seeing governments and corporates taking on this approach.

Landscapes are holistic, they allow you to link together different projects in an area, for example, forestry projects might help generate water for a water program. The water program then helps an agricultural program, agricultural programs ensure nutrition for cities and cities create demand for renewable energy. Creating those synergies between projects, nature-based projects, is the value of going to the landscape approach. It also allows you to aggregate projects so that you can get to the scale that bankers are interested in, $100 million and above. In the Little Book of Sustainable Landscapes, written in 2015, we found that effectively all sectors have one or other type of landscape approach e.g. climate smart agricultural landscapes for food, integrated catchment management for water, integrated coastal zone management for oceans and so on. The content is different, but they use the same steps five steps to operate. Stakeholders come together in a landscape. They define the problem. They understand the causes of that problem, they d

efine the solution they implement that solution and then they learn and monitor on their progress. This process is called integrated landscape management.

The theory is that if you go through that process, you get sustainable landscapes, and if you have enough sustainable landscapes on the planet, then we can reach the SDG targets.  A report will be launched soon which gives a bit more guidance on how to do this.

Reframe finance to work at the scale of nature

How we finance this is the next question. The world of financing is about projects e.g. financing a bridge, a farm but that is starting to change.  There is plenty of money available, over a trillion dollars, and that’s dramatically increased in the last decade. Until recently these investments largely focused on building energy and transport however, investors are now looking for land-based investments. We share two examples of those sorts of landscape investment vehicles:

The Mai Ndombe Province Emissions Reductions programme (World Bank) in the Democratic Republic of Congo shows how some of these large carbon investments may play out. This US$170 million integrated initiative aims to protect over 9 million hectares of forest. This program aims to reduce emissions by the equivalent of Cape Town. Fifteen organizations undertake activities such as establishing commercial plantations, savannah regeneration, sustainable charcoal production, agricultural forest crops, reduced impact logging and forest protection. More importantly, this establishes a long-term institutional framework for implementing the SDGs at provincial scale.  We are seeing synergies developing between these solutions. The savanna restoration, that the communities are working on, is benefiting from the knowledge of the plantation industry, for instance.

The other example is the emergence of commercial finance which is taking on this sort of thinking. Using the case of Asia’s first corporate sustainability bond the Tropical Landscape Finance Facility is a landmark $95 million long-dated sustainability bond to finance sustainable natural rubber production in Indonesia. Built by a multi-stakeholder partnership between Michelin, the tire company, BNP Paribas and ADM Capital. Michelin has an 80,000 hectare rubber plantation that is up against a very important rainforest. It is near one of 13 places in the world you find tigers, and it’s one of the only places where you find tigers, orangutang and elephants together. There’s a reputation risk for Michelin if that gets destroyed, therefore there is an incentive to build a program that invests in making their plantations more wildlife friendly and sustainable.

In these two examples of landscape investment vehicles,  you can group together bankable nature solutions into something that really does work at scale. And here’s the theory of how that works. We start with a landscape level goal. What’s the problem you want to solve? In, Michelin’s case it’s getting wildlife friendly rubber, reducing risk and also getting cheaper loans.

Then set a number of SDG targets for the landscape e.g. forest management, peatland restoration, protected areas, but looking for individual projects nature based solutions that can demonstrate progress towards those goals. So in this case it might be timber production or paludiculture. They can be commercial or they could be grant based, but then importantly you look for scaling pathways, how can you move from one of those projects, to 10, or 100, so that you can fill the landscape with beneficial projects. That’s the theory of landscape investment vehicles; landscape vision and a set of bankable projects, commercial, and grant.

New funds are starting to develop around the world e.g. the Dutch Fund for Climate and Development (DFCD) is a very good example where they’re investing in both landscape level structures and nature based solutions that fit up into those. It’s a $160 million program being implemented in 10 countries, and there’s quite a few more of those sorts of programs coming along. These are all examples of linking the money up to ecosystem goals and creating financial structures at the scale of the landscape.

Multiplicity to integrated system of impact measurement

The third tool, integrated landscape metrics. This is a less advanced area, we need to go from the multiplicity of different certification schemes and standards, all of them good, but none of them talking to each other, to some form of integrated system of measurement. The challenge is to create a crediting scheme at landscape scale for carbon, biodiversity, water, and certified production.

We’ve got some new tools coming that can really help us operate at the scale of nature, landscape approach landscape, investment vehicles, and integrated impact credits.  Stay tuned!

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