Reports / Reports

Conservation Finance. From Niche to Mainstream: The Building of an Institutional Asset Class

Sustainable farmland, healthy forests, clean water, and abundant habitat stand to become more valuable as the global population climbs to nine billion by 2050. Already, pioneering investors have put together financial solutions that combine real assets, such as tropical forests, with cash flows from operations in fields such as sustainable timber, agriculture, and ecotourism. Conservation finance, as this field is known, represents an undeveloped, but emerging private sector investment opportunity of major proportion.

Filling this gap to finance the preservation of the world’s precious ecosystems will require USD 200 – 300 billion in additional capital, and private investment capital may be the only source. Attracting that level of private capital will require attractive risk-adjusted rates of return, in addition to clear and measurable conservation impacts.

In this report, Credit Suisse—together with the McKinsey Center for Business and Environment—there is a toolkit for substantially growing the investment that flows into the conservation sector, illustrated by a few concrete ideas that we deem to be scalable, repeatable, and investable. Implementing these ideas will require strong collaboration between the financial and environmental communities to find new and creative ways of solving the financial structuring and conservation challenges at hand.