CFA Publications
Coral Reef Finance: Insights from the Global Fund for Coral Reefs Investment Principles
August 2024
The Global Fund for Coral Reefs (GFCR) seeks to enhance the resilience of coral reef ecosystems, communities and economies by unlocking new public and private resources that accelerate sustainable businesses and finance solutions. Launched in 2020, the GFCR was created recognizing that longer-term finance solutions beyond traditional grants are required to address the diverse challenges facing coral reefs. The GFCR’s ‘reef-positive solutions’ include businesses and finance mechanisms that have a positive impact on coral reef health while providing sustainable benefits for local communities. The GFCR provides a suite of support including finance for transformative programmes, technical assistance and risk-tolerant investment capital to design, incubate and grow these reef-positive solutions.
This document has been compiled for The Global Fund for Coral Reefs with the support of the United Nations Development Programme (UNDP) and Conservation Finance Alliance (CFA).
July 2024
The CFA is proud to release the following tool, wich presents a systematic method for brainstorming, defining, and prioritizing suitable finance solutions. This Methodology was established by the Conservation Finance Alliance Marine and Coastal Finance Working Group with support from additional partners including BIOFIN and the Global Fund for Coral Reefs. This Guidance Note is connected to a worksheet that can be accessed here.
DOI: 10.13140/RG.2.2.14604.12161
Conservation Finance for Coral Reefs
A Vibrant Oceans Initiative Whitepaper | March 2022
Coral reefs face threats from climate change and local pressures, but many initiatives designed to deliver conservation outcomes for them and the social-economic systems they support are limited by sustainable finance and the availability of funds over the long term. Conservation finance is viewed as part of a holistic approach to coral reef conservation that integrates science-based biodiversity, social, and economic solutions tailored to local socio-cultural, environmental, and economic conditions to ensure their effective design and implementation. Specifically, conservation finance is defined as the “mechanisms and strategies that generate, manage, and deploy financial resources and align incentives to achieve nature conservation outcomes” (Meyers et al. 2020). Increasingly, there are diverse finance solutions that could support coral reef conservation and associated community wellbeing.
This whitepaper reviews a broad range of finance solutions related to coral reef conservation, including conservation trust funds, blended finance, small and medium-sized enterprises, blue carbon, blue bonds, environmental impact bonds, debt for nature swaps, insurance products and biodiversity offsets. We highlight opportunities and solutions for both well-documented successful finance solutions and a range of innovative approaches that are currently being piloted. We also provide guidance on how governments, reef managers, and conservation stakeholders can identify, prioritize and implement a portfolio of finance mechanisms to achieve their desired conservation outcomes.
Practice Standards for Conservation Trust Funds
The CFA is proud to release the new report "2020 Practice Standards for Conservation Trust Funds".
Building on the original edition produced in 2014 by Barry Spergel and Kathleen Mikitin, these voluntary Practice Standards for Conservation Trust Funds serve as a tool for improving the design, management, and monitoring and evaluation of CTFs. CTFs and their donors can decide to use, aspire to, or adapt the Practice Standards to fit their particular needs. It is hoped that they will also continue to serve as a basis for greater harmonization of international donor rules, standards, and policies for CTFs, resulting in lower transaction costs and greater conservation impact.
Conservation Trust Funds 2020: Global Vision, Local Action
A comprehensive analysis of CTFs, including findings and trends from the past decade, with a look ahead to the future.
Finance Mechanisms for Coral Reef Conservation training tools
A deck of training slides has been prepared by the Conservation Finance Alliance for the International Coral Reef Initiative, based on “Finance Tools for Coral Reef Conservation: A Guide” (2018) by Venkat Iyer, Katy Mathias, David Meyers, Ray Victurine and Melissa Walsh. The slides cover 13 finance mechanisms, along with an introductory context-setting section. They can be used as one entire set, or in any combination. Each finance mechanism section can also be used as a stand-alone module. The training deck is designed to provide an introductory overview on finance mechanisms to protected area managers, government employees, conservation biologists, NGO staff and others working in the field of biodiversity conservation. It does not assume the audience has any prior experience in conservation finance or background in economics or finance. The training deck is not intended to serve as a detailed “how-to” guide on implementing any single mechanism, but rather to provide an introduction and give participants a framework for evaluating the suitability of different mechanisms to a specific conservation context.
Conservation Finance: A Framework
Historical definitions of the term “conservation finance” (also called biodiversity finance) are narrowly focused on generating and managing revenue for conservation. The mechanisms and strategies employed by conservation finance practitioners are actually much broader and have great potential for reducing pressures on nature and generating revenues if they are better understood and implemented. The Conservation Finance Alliance (CFA) defines conservation finance as ““mechanisms and strategies that generate, manage, and deploy financial resources and align incentives to achieve nature conservation outcomes.” Identifying and implementing conservation finance mechanisms is most effective using a systems-thinking approach that seeks to address the complex interactions and needs of key stakeholders and decision makers. Some essential background to this broad definition includes the fact that the vast majority of finance for nature comes from government sources, that regulations and economic instruments are generally designed to align incentives and influence market prices, and that private investment in conservation is enabled by governments clarifying ownership and liabilities for nature and ecosystem services. Conservation finance practices have now moved beyond the simple concept of identifying and closing the finance gap through mobilizing additional resources. Four main outcomes of conservation finance solutions can include: 1) decreasing conservation costs; 2) increasing the flow of capital; 3) discouraging harmful actions; and 4) incentivizing positive actions. These outcomes should be integrated among the mix of conservation finance solutions implemented for a given challenge. Across all finance solutions and conservation actions, it is also important to focus on improving delivery in terms of effectiveness and efficiency
The paper proposes a taxonomy of conservation finance mechanisms and strategies under which all known mechanisms can be categorized.
Author(s): David Meyers, Conservation Finance Alliance; John Bohorquez, Stony Brook University, School of Marine and Atmospheric Sciences, Institute for Ocean Conservation Science; Tracey Cumming, Biodiversity Finance Initiative (BIOFIN), UNDP; Lucy Emerton, Environment Management Group; Onno van den Heuvel, Biodiversity Finance Initiative (BIOFIN), UNDP; Massimiliano Riva, UN Joint SDG Fund; and Ray Victurine, Wildlife Conservation Society.
March 2020
Finance Tools for Coral Reef Conservation: A Guide
Coral reefs are critical ecosystems that are home to more than 25% of all known marine species, while occupying less than one quarter of 1% of the Earth’s marine environment (IUCN, 2013). In June 2018, the 50 Reefs initiative culminated with the publication of a scientific study on coral reefs that are least vulnerable to climate change and have the greatest capacity to repopulate other reefs over time. To contibute to 50 Reefs, the Wildlife Conservation Society (WCS) worked in conjunction with the Conservation Finance Alliance (CFA) to create a working guide on the financial tools available for coral reef conservation. Financial tools are a means of securing reliable funding for conservation activities such as creating new protected areas, restoring ecosystems, and promoting sustainable tourism or aligning incentives of actors to improve conservation outcomes. This guide is intended to serve as a reference and resource for protected area managers and other professionals charged with achieving conservation and protection of coral reefs, and ensuring adequate financial means to do so.
Author(s): Venkat Iyer, Katy Mathias, David Meyers, Ray Victurine, & Melissa Walsh
December 2018
The purpose of this report is twofold. First, we assess the current state of the impact investment sector with respect to its focus on the environment. We do so by assessing environmentally focused investment funds. We review their financial and legal structures, along with the foci of their investments. We also analyze the standards and ratings currently present in the sector, and identify broad levels of risk to those investment funds. Our main purpose is to provide snapshot of the impact investment space as it relates broadly to environmental conservation.
Building on this assessment, the second purpose of this report is to scope a preliminary strategy around the creation of an investment vehicle that supports ventures that have the potential for high biodiversity impacts, while also being financially profitable. We refer to this potential vehicle as a biodiversity conservation venture fund (BCVF), since its goal would be to support high risk-high return investments with respect to biodiversity benefits. We refer to the types of investments the fund would support as biodiversity conservation ventures (BCV): for-profit organizations that are necessarily entrepreneurial in spirit, and exist explicitly to produce high-impact biodiversity conservation benefits while being financially sustainable. Our assessment hopes to provide a viable roadmap to inform the next steps in developing an investment vehicle that supports BCVs.
Author(s): Conservation Finance Alliance
February 2014
In order to address the concerns of the debate between endowment CTF funding that delivers moderate longterm funding versus traditional donor projects which generally provide substantial short-term funding, and to provide donors and partners with the information needed to inform and assess the benefi ts of channeling funds specifi cally into one or the other fi nancial mechanism, the Conservation Finance Alliance (CFA), with support from Instituto Semeia, Linden Trust for Conservation, Fondation Internationale du Banc d’Arguin (FIBA), the French Agency for Development (AFD) and the French Global Environment Facility (FFEM), commissioned a two-phase comparative review of the advantages and disadvantages of financing PA and PA systems through CTFs versus traditional short-term donor project support. The comparative review was based on an overall scoping exercise, interviews, a web survey and case studies. It focused on African and Latin American countries and CTF’s with endowments. Overall, the review provides good evidence that using a combination of approaches off ers the best investment option.
A report commissioned by CFA and based on the work of Aequilibrium Consulting (2012) and LeGroupe-conseil baastel s.p.r.l. (2013)
October 2014
Collection of CTIS Publications
Yearly CTIS publications from 2006 to 2016.
White Paper: Options and Financial Mechanisms for the Financing of Biodiversity Offsets
Increasingly the Conservation Finance Alliance (CFA), the Business and Biodiversity Offset Program (BBOP) and Wildlife Conservation Society (WCS) observe efforts by companies to employ the mitigation hierarchy and attempt to offset their residual impacts. Many of these projects are still in the design phase but more and more companies are moving towards implementation of offset initiatives. Although the number of offset projects under implementation is still relatively modest, lessons drawn from these experiences have highlighted the fragility of certain offset projects stemming from inadequate financing and frailties within their underlying funding structures. The lack of adequate finance is a major risk in achieving the permanence of offset schemes around the world, especially where regulations do not require them and where compliance regimes are lax. This report explores these ideas and potential options to explore when tackling these issues.
Author(s): Francois Bernard, Giles Davies, Matthew McLuckie, & Ray Victurine
February 2018
These Practice Standards for Conservation Trust Funds (CTF‘s) are the result of a nearly one-year collaborative initiative aimed at developing evidenced-based norms for use by CTF‘s and those institutions and individuals who provide financial and technical support to them.
Rapid Review of Conservation Trust Funds - May 2008
These Practice Standards for Conservation Trust Funds (CTF‘s) are the result of a nearly one-year collaborative initiative aimed at developing evidenced-based norms for use by CTF‘s and those institutions and individuals who provide financial and technical support to them.
Author(s): John Winter
June 2015