The market for conservation impact investing is surging, and private investments are expected to more than triple between 2014 and 2018, according to a new survey prepared by EKO Asset Management Partners and The Nature Conservancy's NatureVest division.
The survey revealed that some $23 billion was committed to conservation impact investing in the five-year period from 2009 to 2013.
Private investments accounted for almost $2 billion of this market — an amount that is growing at an average of 26% annually, and is expected to reach $5.6 billion by 2018.
However, the organizations also reported that a substantial amount of potential private capital had not been deployed, demonstrating, it said, the need for a significant increase in the number of risk adjusted investment opportunities.
The study, which was overseen by a steering committee that included the David and Lucile Packard Foundation, the Gordon and Betty Moore Foundation and JPMorgan Chase & Co, was based on a survey of 56 investors, including five for-profit and nonprofit development finance institutions and 51 private investment organizations.
Respondents provided information about their impact investments for the 2009–'13 period, including intended conservation impact, size and type of investment, target internal rate of return and performance to date.
Survey participants were also asked about the structures of their investment portfolios in the period from 2004 to 2008, and their perceptions of and long-term visions for the future market for conservation-related impact investing.
Key Findings
The survey found that some $23 billion committed to conservation impact investments from 2009 to 2013 was invested in three main categories:
- Water quantity and quality conservation: watershed protection, water conservation and storm water management, and trading in credits related to watershed management
- Sustainable food and fiber production: sustainable agriculture, timber production, aquaculture and wild-caught fisheries
- Habitat conservation: protection of shorelines to reduce coastal erosion, projects to reduce emissions from deforestation and degradation, land easements and mitigation banking
The report said private investors expected to deploy $1.5 billion of already-raised capital over the next five years, and to raise and invest $4.1 billion more.
Eighty percent of the nearly $2 billion already deployed by private investors came from just 10 sources.
