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Cultivo Launches Its Crisis Action Plan To Help Unlock Private Finance Into Nature

Cultivo, a new way to invest in nature at scale, launches its ‘Triple Crisis Action Plan’, a new plan to tackle the worsening triple planetary crisis of global warming, biodiversity loss, and water stress.

As the world processes the latest IPCC report (Sixth Assessment Report), Cultivo is stepping up its efforts to combat the crises by funnelling investment, particularly private capital, towards projects that address the triple planetary crisis.

The need for urgent action to tackle the triple planetary crisis:

  • Climate change: Global surface temperature was 1.09C higher in the decade between 2011-2020 than between 1850-1900. The past five years have been the hottest on record since 1850. The recent rate of sea level rise has nearly tripled compared with 1901-1971
  • Biodiversity Loss: Wildlife populations have, on average, declined by 60% since 1970 and there is the potential for our actions to cause the loss of 1 million species.
  • Water Stress: 2.3 billion people live in water-stressed countries, of which 733 million live in high and critically water-stressed countries. Water stress is a global crisis and acutely impacts many developed countries. For example, in May 2021, 41of the 58 California’s counties were in a declared drought emergency.

By 2050, total investment needs for nature-based solutions will amount to $8.4trillion cumulatively, reaching over $536billion per year, four times the amount invested today.

Currently, only 14% of finance for nature-based solutions comes from private capital. Scaling investment from private capital companies is essential to fill the trillions of dollars of financing needed. Based on primary research with financial institutions, corporations and foundations, Cultivo launches its 5 Step Action Plan to help unlock private finance into nature.

1. Offer nature as an attractive asset for investment

For investors, it is often very difficult to evaluate a nature based project as an investment. Where does the money come from? How does it generate a return? Cultivo’s new plan packages nature-based solutions into investment products, showing the financial, social and environmental returns.

2. Use technology to reduce transaction costs and create market efficiencies

i) For financial institutions, the cost to search and originate high quality nature based projects is very high.

Cultivo’s new plan will leverage proprietary algorithms and remote sensor technologies to reduce the transactions costs involved in identifying high quality nature based solutions.

  • Cultivo uses an in house Search and Origination team to do the ‘heavy lifting’ to identify the best assets to invest in.

ii) The cost for the ongoing monitoring of projects can be high and impacts the margin of a project.

  • The Cultivo Technology Hub uses its own tools and 3rd party tools to provide digital MRV (monitoring, verification and reporting) to monitor the vital signs of a project and reduce monitoring costs.

3. Take a holistic approach

• It’s important not to focus just on carbon. Cultivo’s new plan takes a more holistic approach.

• Cultivo assesses the ‘Natural Capital Density’ for every project, which means every layer of the services that nature provides (water, biodiversity, carbon, food etc.)

• The Cultivo Technology Hub has tools that allow analysis of the impacts of water stress, biodiversity loss, and climate change.

4. Measure the right attributes, and choose the right standards

  • When investing in nature at scale to create genuine impact, it’s essential to find the right standard that addresses multiple issues, not just one. CCB from Verra is a good example of the standard applied to Cultivo-backed investments.
  • The new action plan will also ensure each project has environmental and social safeguards built in.

5. Make data transparent

  • Lack of data disclosure is a big impediment in the market.
  • Cultivo’s approach ensures all data for nature-based projects is transparent to all stakeholders from beginning to end.

Commenting on the launch of the new action plan, Dr Manuel Piñuela, Co-Founder and CEO of Cultivo, said: “It is critical we take a holistic approach when it comes to investing in nature. The triple crises of climate change, biodiversity loss and water stress are interconnected and we must address them together and with urgency. No longer can we allow any complacency – the future of our children and grandchildren is in serious danger. High quality nature-based solutions can tackle these triple crises and we need to unlock investment in nature at scale and at speed.

“We hope that the hard-hitting nature of this year’s IPCC report helps galvanise us all into action and gives private financial institutions and corporations across the world the motivation to work with us and adopt the plan we are launching today.”

Author

  • Francis is a junior journalist with a BA in Classical Civilization, he has a specialist interest in North and South America.

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