In 2014, The Nature Conservancy established NatureVest, a new initiative of the Conservancy. The program, sponsored by JPMorgan Chase & Co., will seek to transform the way we protect natural capital – the soil, clean air and water, and other valuable resources that nature provides. NatureVest will also capitalize on the growing impact investment sector to create a platform to advance investment in conservation. As the founding sponsor, JPMorgan Chase is providing $5 million over three years to the NatureVest initiative.
As part of this effort, NatureVest will convene investors; develop and execute innovative financial transactions; and continue to build an investment pipeline across multiple sectors, including agriculture, fisheries and environmental markets.
With the global population estimated to peak at 9 billion by 2050, there is a growing need to maximize the pace, scale and effectiveness of efforts to protect natural ecosystems – along with the cities and communities that rely on them. At the same time, there is insufficient investment in conservation. According to a recent study, the current financial need to support global conservation efforts is approximately $300 billion per year. However, only about $51 billion is devoted to these activities annually, primarily from public and philanthropic sources.
The Opportunity: Closing the Funding Gap
NatureVest will work to close the funding gap that exists today by creating new opportunities to invest private capital in conservation projects that deliver financial returns and clear environmental benefits – strengthening natural systems and the cities and communities that rely on them. Investors interested in a more sustainable impact from their capital can provide much needed financing for projects such as green infrastructure for municipal water supplies, sustainable cattle ranching for grassland restoration and improved fisheries management systems, to name a few.
Creating a platform for conservation investment: NatureVest will advance natural capital investing from a series of discrete transactions to a fully-developed market. It will source and execute conservation projects that engage the participation of a range of investors and generate a consistent source of long-term capital to ensure the completion of these projects.
Thought leadership: Through original research and convening of the industry’s sharpest minds, NatureVest is developing the intellectual capital necessary to build understanding of the importance of a market for conservation efforts. NatureVest’s first research product will be a report on how conservation can be advanced through markets. The report will, for the first time, quantify the size of the market for conservation impact investing, with specific focus on market segments, investors and participants, and deal types. The report, to be released in the fall of 2014, will be written in collaboration with JPMorgan Chase, EKO Asset Management Partners and supported by the Gordon and Betty Moore Foundation and the David and Lucile Packard Foundation. The paper is designed to help investors and other stakeholders better understand current opportunities and identify potential future prospects. In addition to its role in the research, EKO Asset Management, an environmental investment and consulting firm, is also providing consulting services on the design and execution of the NatureVest strategy.
Committed to the Responsible Development of Shale Resources
Technological advances in the use of horizontal drilling and hydraulic fracturing techniques have led to a significant increase in oil and gas production across the United States, especially from shale formations that had previously been too costly to develop.
While these expanded supplies of hydrocarbons present both significant economic development and environmental opportunities for the nation, it’s also given rise to environmental concerns that could undermine these benefits if they’re not adequately addressed.
Many organizations and government agencies have focused their attention on the potential for drinking water contamination, water pollution and air quality impacts from the development of our shale resources. Less attention has been directed to fragmentation and other damage that could occur to forests, streams, wetlands or other natural areas from the construction of roads, well pads and pipelines, and water withdrawals.
The Conservancy has long been active in many regions where production is now occurring, and is committed to working with a diverse range of stakeholders to ensure that shale resources are developed in a manner that aligns with our broader conservation objectives.
As one of the world's leading financial institutions, JPMorgan Chase recognizes that economic growth and rising living standards fundamentally rely on the abundance and vitality of the planet’s resources and ecosystems. Supporting a more environmentally sustainable global economy is a challenge with real implications for every sector of modern society, including financial services.
Solutions in Action
The JPMorgan Chase Foundation provided a generous $200,000 grant to support the Conservancy’s effort to expand our work on responsible shale development in the Appalachian region and in other shale formations across the U.S. This support enabled the Conservancy to pursue a number of activities in 2013, including:
- Assessing cumulative impacts across larger landscapes and communities that are affected by shale development;
- Consulting with shale developers on environmental impacts and management practices to avoid or offset those impacts;
- Investigating the potential benefits of coordination among companies to reduce impacts on wildlife habitat and human communities;
- Working with developers, government agencies, communities and other stakeholders to build a business case for better practices and/or coordination; and
- Participating in regional and national dialogues that are focused on improving the environmental performance of shale development.