1 of 13

Green Finance

Attracting new capital for forests

Firth Griffith, Global Sustainability Initiative; MissionBlue Capital; Global Conservation, Trustee

2 of 13

Urgency

Need compelling investment cases to attract capital for emission reductions

3 of 13

What investors seek

Subtitle

Clear, measurable indicators drive capital allocations

Economic Incentives

Transparency

Accountability

4 of 13

Few types of Green Finance

Grant or public funding instrument

Voluntary credit puts a price on carbon sequestered in forests

Grants from foundations and private donors

Private & public market participants in environmental climate risk mitigation

Pledging assets to ensure repayment on a secured loan

Guarantee of repayment depends on the credibility of the issuing institution

BIODIVERSITY CREDITS

REDD+

DEBT

PHILANTHROPY

BLENDED FINANCE

BONDS

5 of 13

Cambodia S. Cardamom

REDD+ (Listed) 497,835 ha

Start 01/15

VCS & CCB Validated

Verification 12/18

2.4M tons VERs for sale per year

Benefits 29 villages

6 of 13

Peru Carbon Project

REDD+ (Applied) 8 Million Hectares + 2 Million Buffers

World’s Best Intact Primary Forests

Highest Carbon & Biodiversity

Scientific Voluntary Offsets (ART Tree)

Verified, Certified Protection – Avoided

Deforestation – No Double Counting

7 of 13

Chile Sovereign SLB

Chile priced its first-ever Sovereign Sustainability-Linked Bond (SSLB)

03/22 $2 billion 20-year SSLB

4x oversubscribed 230 Institutional Investors

Can achieve SPTs using its forests

8 of 13

Uruguay Forest-centric SLB

10/22 US$4Bn demand for only US$1.5Bn bonds

Sustainability Performance Targets

Raised the credit rating of the country

Maintain 100% of all Native Forest Area (cf. 2012)

9 of 13

Brazil indexed-linked carbon bond

Interest rates tied to forestation targets; country pays no interest if forest increases 0.5%+ p.a.

Lost 8% forest in 15 years

Target return forest cover in 16 years

Bond interest a function of success or lack (16% p.a.)

10 of 13

�

In conclusion…

What doesn’t work adequately yet?

Awareness: Limited without market choices
Divestment: Not working & relies on immature version of ESG, taxonomies
Voluntary carbon credits: Unproven
Use of proceeds sovereign green bonds: Gimmick
Use of proceeds corporate green bonds: Clumsy

What seems to work for all stakeholders?

Bans like CFCs
Emission Trading Schemes like ‘Acid Rain’, SOX & NOX
Emission Trading Schemes with Carbon at 23% of global emissions
Outcome-based corporate green bonds (policy performance, sustainability-linked)
Outcome-based sovereign green bonds (policy performance, sustainability-linked)