JPMorgan Chase & Co.
Transforming the Way We Protect Natural Capital
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 was a report on how conservation can be advanced through markets. The report had, for the first time, quantified the size of the market for conservation impact investing, with specific focus on market segments, investors and participants, and deal types. The report was 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, provided consulting services on the design and execution of the NatureVest strategy.
Examples of NatureVest’s success with on the ground projects
Livestock to Markets: In 2014, NatureVest helped the Northern Rangelands Trust (NRT) to scale up the Livestock to Markets program with a $3.5M impact investment into a new entity, NRT Trading (NRT-T). The Conservancy is considering another investment in NRT-T of similar scale in the coming months. This social enterprise subsidiary of NRT will be an incubator for programs like Livestock to Markets throughout the regions where NRT is working with communities—an area of over 31,000 square kilometers. The investment in LTM will enable the purchase of 10,000 animals annually, up from just over 1,000 a year under the grant-funded model. NRT-T will also build a second abattoir and invest in other capital improvements to enable it to expand its reach to 1.2 million acres of community land. The Peter Hawkins Dobberpuhl Foundation made this investment possible through a $7 million commitment to the Conservancy.
Western Checkerboards: The Conservancy has successfully completed the acquisition of industrial timberland in Washington's Central Cascade Mountains and Montana's Blackfoot River Valley. The transaction was made possible by the generous support of the Robertson Foundation. The project represents one of the best acquisition opportunities the Conservancy has seen in recent years in the American West. The transaction builds on years of work by the Conservancy and partners to consolidate vast stretches of western land that are broken into a checkerboard pattern of public and private ownership. This purchase secures some of the most important wildlife habitat in North America, connects vast wilderness areas and protects sources of clean water for people and nature. The project will also involve some sustainable timber management to restore the forest to more natural conditions. Timber revenues will be used by the Conservancy to help pay for our operating costs related to property management and restoration and selling lands into conservation status over the coming decade.