Conservation <ote Impact Report

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1 Conservation <ote Impact Report 2016

2 The Nature Conservancy envisions a world where people and nature thrive together. But today our world is at a crucial juncture. We are in a century that will be defined by a growing human population, and this era will see hard-earned conservation gains erode unless we stabilize the climate and find better ways to meet increasing demands for water, energy, food and other resources. The Nature Conservancy is uniquely positioned to be a leader in taking on these complex challenges facing the planet. Our place-based projects in over 40 countries serve as living laboratories where new ideas to protect nature are tested, perfected and adapted for other places. We engage businesses, governments and communities in delivering these on-the-ground results demonstrating how conservation innovations can transform how our food, water and energy are produced. And by empowering more leaders and communities all over the world with solutions that work, we will inspire action at the scale of the challenge. And yet, the ability for global conservation solutions to reach the scale of the climate and development challenges we all face depends on driving new resources to support this work, specifically increasing the flow of private capital. The Conservation Notes are one way that The Nature Conservancy is channeling private capital to conservation-critical lands and waters, providing increased capacity to finance high-priority conservation projects around the world. Individual and institutional investors earn a fixed rate of interest, while generating environmental returns that are measured in acres protected, landscapes preserved, and habitat restored. Since they launched in 2012, the Conservation Notes have deployed more than $42 million into helping The Nature Conservancy create a virtuous cycle in which we take care of nature so that nature can continue to take care of us. Included in this report are four examples of projects made possible by the funds from the Conservation Notes. By investing in the Conservation Notes, you are aiding The Nature Conservancy in addressing the most pressing conservation threats at the largest scale. Thank you.

3 1,371,041 Total acres conserved since the Notes launched in 2012 Photo Jerod Foster

4 213,081 Land and water acres protected in 2016 by Conservation Note investors. 40 Projects that were funded with support from the Conservation Notes program through States and 3 countries where Note purchases and contributions helped to protect the lands and waters on which all life depends. Stories of succe

5 Oklahoma Michigan Tennessee Photo Stephen Alvarez Photo Jason Whalen Photo Steven Hunter ss Texas Photo Stephen Alvarez

6 The Blue River at Oka Yanahli Preserve, Oklahoma Strategy: Conserving a critical piece of disappearing grasslands to improve water quantity and quality In August 2016, The Nature Conservancy and a suite of partners teamed up to conserve 3,100 acres of native prairie along the Blue River at Oka Yanahli Preserve in Johnston County, Oklahoma. The Blue River is the only river in Oklahoma that is still free flowing there are no dams along its 151-mile path and it is a critical source of water for human needs. The Blue River watershed encompasses a variety of ecosystems, including rolling limestone prairies, oak woodlands, granite canyons and bottomland hardwood forests. Seaside alder, found only in three isolated locations of the United States and arguably the rarest tree in North America is more abundant on this river than anywhere else. The river plays a vital role in the well-being of Oklahoma communities who depend on it for drinking water, food, jobs and recreation. The greatest threat to the Blue River is groundwater withdrawal from the Arbuckle-Simpson Aquifer that exceeds the natural rate of recharge and reduces the river s velocity. By protecting the aquifer s native, perennial grasslands we can maximize aquifer recharge, and by protecting the river s floodplains and riparian zones we can maintain, and even improve, water quality. Simple techniques like excluding cattle from the river have a dramatic impact in improving water quality. Allowing plants to grow along the river s banks can slow or even halt erosion and sediment deposition. Our land stewardship will improve the Blue River s discharge and water quality on a small scale, but the Oka Yanahli Preserve serves as a demonstration site for best management practices along the entire watershed. It also encourages voluntary conservation to benefit all people downstream and protect this iconic symbol of natural beauty. The Grand River Fen, Michigan Strategy: Protecting wetlands to establish a corridor for plants and animals to move among natural areas With funding from the Conservation Notes, The Nature Conservancy added 153 acres to the 453-acre Grand River Fen Preserve, creating a critical connection between the north and south portions of the preserve, situated at the headwaters of the Grand River, Michigan s longest river. The Grand River Fen Preserve, nestled in the rural landscape of southern Michigan, provides habitat to a unique set of plants and insects, including globally-rare species such as the tamarack tree cricket, blazing star borer, Poweshiek skipperling butterfly and bog bluegrass. This acquisition increases the total amount of available habitat and provides a critical linkage for these species. The fen system itself, a wetland that receives most of its water from underground alkaline springs rather than from precipitation, is unusual and increasingly rare. Here, we can help protect the cycle of groundwater recharge and discharge that maintains the prairie fens and associated rare animals and plants. The Preserve also plays a role in a much larger, regional system. Regionally, the Grand River watershed comprises 13% of the entire Lake Michigan drainage basin, flowing as much as 4 billion gallons of water per day into the Great Lake during the spring thaw and rain season. While the river suffers from impacts at multiple places along its route, we are focused on protecting and restoring this incredibly important headwaters area. The newly acquired acreage serves as a key stepping stone in establishing a corridor, several miles long, for plants and animals to move between the Grand River Fen Preserve and Skiff Lake. This Preserve not only provides habitat for rare species, but also provides habitat to pollinators and game species that move throughout the surrounding landscape. And, it offers numerous recreational opportunities that connect neighbors to nature.

7 Southern Cumberlands, Tennessee Strategy: Maintaining landscape-level climate resiliency and protecting biological hotspots Over the past 15 years, The Nature Conservancy and partners have protected more than 67,000 acres of land within the Jackson Mountains Region of the Southern Cumberlands, a bi-state conservation area in Tennessee and Alabama. This past year, The Nature Conservancy, in partnership with The Conservation Fund, utilized Conservation Note funds to add another 4,372 acres of wildlife habitat and recreation lands to this globally important ecosystem. The Cumberland Plateau is the world s longest hardwood-forested plateau and is widely considered one of the most biologically rich regions on Earth, rivaling the biodiversity of tropical rainforests. Carved over time by flowing water, the plateau today is a labyrinth of rocky ridges and verdant ravines dropping steeply into gorges laced with waterfalls and caves, ferns, and umbrella magnolias. The region has long been a remote and rugged wilderness. For generations much of the Cumberland Plateau remained undeveloped or maintained as timber company lands. In recent years, however, many timber companies have divested themselves of their forest holdings. Because of its scenic beauty and its largely undeveloped character, the Cumberland Plateau has become increasingly attractive to developers of second homes and vacation getaways. The result is fragmentation and degradation of the area s rich forests and pure streams. This acreage has been on the Conservancy s highest priority acquisition list for two decades; in fact, we attempted to purchase the parent tract in the early 2000s. When it again came on the market earlier this year, the Conservancy was able to act swiftly, thanks to funds available through the Conservation Notes. Columbia Bottomlands, Texas Strategy: Protecting critical drinking water sources while supporting a robust tourism industry The original Columbia Bottomlands forests are estimated to have been 700,000 acres, yet only 21% of this area remains as forest today. Using important bridge financing from the Conservation Notes, The Nature Conservancy was able to secure nearly 3,700 acres of river frontage and forestland to help protect these globally imperiled hardwood forests. Radar evidence shows that about 29 million birds representing 237 species move through the Columbia Bottomlands annually, which suggests that this area is of continental, if not hemispheric, importance to migratory birds. Even in its diminished state, the bottomland hardwood forests of the Columbia Bottomlands are the only significant expanse of forest adjacent to the coast along the western arc of the Gulf of Mexico. In addition to its value to nature, the Columbia Bottomlands contribute to a significant wildlife tourism industry in Texas and the Gulf Coast states. A $14 million donation to The Nature Conservancy from BHP Billiton established the Sustainable Rivers and Forests Initiative, which advances freshwater and forestland protection in key conservation areas including the Columbia Bottomlands. This donation ultimately made this acquisition possible; however, without the ability to access funding from the Conservation Notes, The Nature Conservancy may have run out of time to purchase this critical conservation demonstration site. The Sustainable Rivers and Forests Initiative will also enable nearly a dozen restoration and water quality improvement projects, including the establishment of a permanent water protection fund in Arkansas to benefit drinking water, fishing habitat and rare species. In addition, Texas' Brazos Woods Preserve will offer community members, visitors, students and researchers, outdoor enthusiasts and partner organizations an array of new opportunities to explore the beauty and biodiversity of nature.

8 The mission of The Nature Conservancy is to conserve the lands and waters on which all life depends. Conservancy staff members Sonia Najera and Aaron Tjelmeland review preserve plans. The Brazos River Preserve is 176 acres and located in Brazoria County, Texas along the river. The Columbia Bottomlands-Brazos River Project seeks to bring public and private partners together to conserve the river and the abundant life it supports. For more information, contact us toll-free at +1 (888) or Visit our website at Graphic design: Paul Gormont, Apertures Inc. Front cover photo Mark Godfrey Back cover photo Jerod Foster The Nature Conservancy is a tax-exempt 501(c)(3) public charity. The purchase of the Conservancy s securities is subject to risks, which are described in the Prospectus relating to the Notes. These risks include the difficulty of achieving or measuring conservation results, as described in the Prospectus. The Conservancy significantly depends on donor contributions for its expenses, including the repayment of the Notes. This is not an offer to sell, nor a solicitation of an offer to buy, these securities. The offer is made solely by the Prospectus, and only in states where authorized.

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