Impact Investments and Verde Ventures Agustín Silvani Managing Director, Carbon Finance Conservation International
Socially Responsible Investing (SRI) Focus on what not to invest in Mainstream / Mutual funds Institutional Investors
Impact Investing: A New Trend Increasingly investors are looking to use their investment portfolios to promote social and environmental change Impact investing is growing. Approx $8B was committed to this asset class in 2012, and $9B projected in 2013 according to latest JPM survey Perspectives on Progress is a research report released by JP Morgan and the Global Impact Investing Network (GIIN), 2013
Impact Investing (green can be profitable) Private equity Venture capital Microfinance >200 funds $5-10b currently invested Focused on social investments/enterprises
GIIRS IRIS, FAST, ANDE Protocols Active conferences at SOCAP, SVN, Investors Circle, etc Metrics + Standards
Case Study: Verde Ventures Investing in Healthy Sustainable Economies Photo 1 4.2 x 10.31 Position x: 4.36, y:.18 Photo 2 5.51 x 10.31 Position x: 8.53, y:.18
Conservation-based Why Verde Ventures? employment is essential to provide economic incentives for conservation The small-medium business sector is a key partner in the intersection between human well being and conservation Lack of available, affordable capital is a major constraint to building green economies The opportunity
Verde Ventures responsibly provides access to finance to sustainable businesses that contribute to healthy ecosystems around the world. Our Mission
Mission aligned SME Loans: US$30,000 to $500,000 for infrastructure, working capital, trade finance for business development in rural communities to advance mission. Technical Assistance: Accounting, marketing, business plan development Monitoring: Triple-bottom line monitoring (Environmental, Social and Financial) Our Tools and approach
Long Term: o Infrastructure, equipment and crop maintenance Short Term/Trade Finance: o Working capital, harvest finance Grant funds: o Business development support (BDS) o Technical Assistance o Monitoring and evaluation Innovative packages: o Mezzanine, quasi-equity, other Types of Financing
Sustainable agriculture Ecotourism Energy (e.g., charcoal substitution) Fisheries Current investment allocation by dollar value 78% Cocoa Coffee Ecotourism NTFP Other 3% 2% 5% 12% Key sectors
$23 million invested to date 44 entities supported, 99 loans, 13 countries 92.8% of repayment rate 54,608 direct beneficiaries 465,078 hectares directly impacted 16.4 million hectares indirectly impacted 549 Red-listed species $48 million in sales generated by clients VV Portfolio Results
International Finance Corporation (IFC) l Agence française de développement (AFD) Fonds français pour l'environnement mondial (FFEM) United Nations Foundation (UNF) Daiwa Securities Global Environment Facility (GEF) KfW Entwicklungsbank (KfW) Overseas Private Investment Corporation (OPIC) Starbucks Coffee Company Key Partners
Name of Investment Central Agropecuaria Perla del Mayo (CAPEMA) Sector/Country Coffee / Peru Alto Mayo Region Amount Conservation/Social Impact 150,000 USD CAPEMA represents 150 coffee producers from 6 communities in the Alto Mayo Protection Forest buffer zone. After cattle, coffee production is one of the main agricultural activities that represent a risk for conservation in the Alto Mayo watershed. Certification programs demand an improvement on agricultural practices such as soil erosion prevention, prohibition on agrochemicals use, agroforestry systems establishment and waste water management. Fair Trade certification also assures a minimum price and demands that the organization maintain an annual premium (US$10/coffee bag) for AGM agreed social investments. Associates families depend on coffee production and commercialization through CAPEMA as one of the bigger incomes during the year. They also produce some other crops for their own food security. Sample VV Deals CAPEMA
Biggest roadblock to scaling up is lack of pipeline Attract Private Sector Capital to ecosystem conservation Build a critical mass of triple bottom line investments supporting healthy, sustainable economies Need to scale up?
Marketplace Building Capturing the Value of the Marketplace Maturity Uncoordinated Innovation SME Conservation Finance Microfinance (today) Marketplace Building involves: Building efficient intermediation to unlock latent supply of capital Building enabling infrastructure for the industry Developing absorptive capacity for investment capital Further behind today than microfinance was in 1999, and is perhaps 10 years behind
Impact Investing vs Conservation Funds What does the private sector invest in? - Sustainable agriculture - Ecotourism - Improved forest management - Restoration of degraded lands - Park co-management Things with a financial return! Sources: FAO, FRA 2011; Ecosystem Marketplace, State of the Forest Carbon Markets 2012
Please visit www.conservation.org/verdeventures Thank you!