What is conservation finance? It’s a fairly new concept, which is understandable if it’s something you haven’t heard before. Most people even take the phrase literally and think of it as a way to conserve finances. But what is being conserved here is nature, the ecosystem and everything related to it. It cleverly combines money and the environment for a noble cause.
By definition, conservation finance is a practice of raising funds and managing capital to provide support to environmental advocacy and movements. This process, however, is more than just raising funds and appealing to people’s charitable nature. It is also an investment opportunity, albeit undeveloped, as of now. This is due mainly to the many obstacles that hamper conservation finance investing.
Investing in ecosystem conservation in critical areas, like Senegal and Morocco, for instance, are fraught with political risks and challenges in regulations. Any investor would have to make hard choices in pursuing such an endeavor. Can anyone put their money where uncertainties abound?
Also, acquisition of rights to areas of the ecosystem that require conservation only makes financial sense if it generates returns. Still, there are investment potentials. What is even better is that you can make money, while creating a social impact.
What are possible investment opportunities you can look into?
Invest in usage rights of deserts, forests or freshwater to protect capital. If acquisition means getting tax breaks, this can be an attractive investment.
Invest in infrastructure and tools that can help sustain and manage the ecosystem. Financial returns are generated through the projects that open up, following completion of infrastructure. From transportation or accommodation that promotes eco-tourism, for example.
Invest in financial instruments that enhance returns. By investing in securities, derivatives and other instruments, you can support the ecosystem market.
Conservation finance is one investment opportunity that can change the world. How soon an investor can start, however, is still uncertain.