Impact Investment for Biodiversity Conservation
Cases from Latin America and the Caribbean
ABSTRACT: More than 30 percent of the earth’s available freshwater and almost 50 percent of the world’s tropical forests are in Latin America and Caribbean (LAC) , which possesses a vast array of terrestrial, freshwater, coastal, and marine ecosystems. Natural capital — a unique source of capital — refers to the terrestrial and marine ecosystem components, including biodiversity, that generate valuable goods and services, called ecosystem services, for humankind now and in the future. Supporting private actors that are sustainably leveraging natural capital, facilitating private investment in conservation and restoration projects, and fostering private innovation in sustainability solutions can partially address a shortfall in funding to protect nature’s assets and biodiversity. This report characterizes and evaluates the performance of innovative finance approaches in LAC , including blended finance, green bonds, capital market solutions, habitat banks, direct equity and pooled funds, and accelerators. As countries seek to reach their commitments under the Convention on Biological Diversity, the Paris Climate Accord, and Sustainable Development Goals 14 and 15, innovative finance could become an essential complement to public finance while ensuring local livelihoods and more inclusive development.