Biodiversity conservation desperately needs additional resources, as well as more efficient allocation of existing budgets. Funding biodiversity conservation can be achieved in three ways, namely: (i) establishing legislation, norms and standards to discourage environmentally harmful activities; (ii) taxing private wealth or soliciting private charity for governments, NGOs and other non-profit groups to invest in conservation; and (iii) making biodiversity conservation a viable business proposition. In a report to be published later this year, we suggest ways of operationalizing the latter approach (1).

Working together
We believe that a new biodiversity business model is needed to deliver large and sustained financing even in the poorest countries. Securing the resources needed for global biodiversity conservation will take time and significant effort. The report — published by IUCN and Shell — argues that we will not succeed through business as usual. The challenge, in many ways, is to convince governments and international policy makers, conservation and civil society organisations, multilateral agencies, private and investment banks, private companies and individual consumers to work together.

We interviewed many of these actors and undertook an extensive literature review so as to better understand the landscape of ‘biodiversity businesses’ — that is, companies whose business models generate biodiversity benefits. We discovered that examples of biodiversity business can be found in a range of sectors, based on various different mechanisms and business models. We assessed what has worked (or not), described the main constraints and identified opportunities to expand market-based biodiversity conservation within a range of different sectors.

Achieving scale
Based on this, we believe that there are numerous pro-biodiversity business opportunities that can generate positive financial returns as well as real biodiversity benefits. The report highlights that: • The most promising way to mobilise significant private investment in biodiversity is by making conservation a viable business proposition; • The main reason to focus on biodiversity business is the enormous capacity of markets to drive change, as well as their potential to leverage new investment; and • Experience suggests that market-based incentives, business tools and financing can be used effectively to align private and public interests in biodiversity conservation.

Many initiatives have been established over the years with impressive results — however none have achieved significant scale or leveraged substantial private investment. In order to address this, we propose an integrated approach to developing biodiversity business combining three distinct capacities or functions: policy advice, technical assistance and finance.

These three functions can be and, in some countries, are provided separately by different public agencies, not-for-profit institutions and commercial service providers. However, it is clear that the current level of support is not sufficient to stimulate significant private investment in biodiversity business. Hence, the report contends that it is both desirable and feasible to bring the different capacities together into an integrated Biodiversity Business Facility (BBF), which would aim to reinforce and accelerate existing efforts at a regional or even global scale. The main components of a BBF would include the following:

• Think-Tank — One of the main obstacles to biodiversity business is weak or missing enabling policy. A key task of a BBF would be to identify and promote opportunities to develop appropriate policy, legal and fiscal regimes for biodiversity business, as well as addressing issues such as trade barriers, biodiversity metrics and indicators, and the evaluation of technical assistance delivery mechanisms. Its efforts might also include advising policy makers at a strategic level (with appropriate safeguards to avoid conflicts of interest with any affiliated trading arm). • Business Advisory Service — Many new businesses, especially in novel and emerging sectors, require assistance to develop to the point where they can sustain themselves or attract mainstream finance. As well as providing a range of tailored biodiversity business development services, the BBF could also conduct applied research on how to improve the effectiveness of such assistance. In addition, it could pilot promising business concepts to test their viability. • Funding Mechanism — Access to capital is a critical factor for any business, including biodiversity enterprise. This component of a BBF would invest in or lend to businesses that demonstrate the potential to deliver both financial returns and biodiversity benefits. It would seek to attract co-investors from the public, philanthropic and commercial sectors, targeting especially those who are keen to see this market develop.

Developing the facility
So how can we develop the BBF? Two main options have been identified. The first is to develop the three components of a facility simultaneously — establish the BBF as a stand-alone institution, recruit expertise, identify potential investors, collaborators and potential projects accordingly. This would require a proper Feasibility Study on the concept of the BBF before any specific investments could be undertaken. Alternatively, it may be possible to accelerate the process by implementing a small number of biodiversity business pilots and nurture the BBF through these investments. This might include work on policy reform, finding co-investors to support specific investment ideas, and business, management or technical assistance.

With the report in the final stages of preparation for publication, IUCN, in cooperation with Shell and others, is now undertaking pre-feasibility work exploring both options by identifying scalable biodiversity business investment opportunities and potential investment partners. If we are serious about conserving biodiversity, a major market transformation is needed to make biodiversity conservation attractive to entrepreneurs and investors.

Joshua Bishop ([email protected]) is Senior Adviser - Economics and the Environment, the World Conservation Union (IUCN); Sachin Kapila is Group Biodiversity Advisor, Shell International Limited; Frank Hicks is President, Sustainable Development International S.A.; Paul Mitchell is Director, Green Horizons Environmental Consultants Ltd; and Francis Vorhies is Director, Earthmind.

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(1) The report will be made available at BiodiversityEconomics.org