Nature's value: How to make biodiversity conservation profitable and scalable?

This article explores the importance of finding new financing mechanisms for biodiversity conservation in Africa. It showcases the AMES Habitat Fund and takes a deep dive on biodiversity credits, their potential impact, and the steps being taken to implement them, highlighting the role of partnerships and the need for a sustainable future for both wildlife and humanity. The AMES (Africa’s Most Endangered Species) Foundation is developing biodiversity credits in Africa, as part of the AMES Habitat Fund. By creating investment solutions that expand protected habitat in Africa, the Fund’s goal is to create a reliable way to channel private sector investment into biodiversity in order to scale its protection to meet the 30x30 goals of protecting 30% of land on earth by 2030. 

Africa boasts a staggering array of biodiversity, home to one-fifth of the world’s known mammals, birds, and plants. This richness supports not only wildlife but also the 1.2 billion people who call Africa their home. However, this biodiversity is under immense threat. To protect and restore these vital ecosystems, innovative financing mechanisms are essential. Biodiversity credits can provide a way to channel financing from nature-positive investors towards conservation projects on the ground who are helping to conserve nature. Recognizing this opportunity, the AMES Foundation is at the forefront of the development of biodiversity credits in Africa, as part of a larger initiative to invest in the development of protected habitats to safeguard endangered species across the continent.

The AMES Foundation 

The AMES Foundation is a global community of makers, creatives, entrepreneurs, founders, investors and CEOs united by the goal of stopping the extinction of Africa’s wildlife. Initially a small circle of enthusiasts, AMES now unites like-minded people from all over the world. The foundation employs entrepreneurial approaches to implement targeted projects on the ground, seeking innovative ways to finance conservation and make the protection of biodiversity scalable and profitable. 

Financing nature's protection

Since the 1970s, the earth has seen a 68% drop in all animal populations, underscoring the urgent need to protect biodiversity. At the recent UN biodiversity conference (COP 15), 196 nations committed to the goal of protecting 30% of land and sea by 2030. Achieving this ambitious goal requires a significant increase in financing volume. It has been estimated that an annual investment of $967 Billion into nature preservation will be needed to reach the 30x30 goals. However, there is a $711 billion funding gap to meet this target. 

The AMES habitat fund 

To tackle this challenge, the AMES Habitat fund creates investable nature reserves through “Nature-positive” income streams to attract private sector investment. This approach supplements existing funding sources, which are heavily reliant on philanthropy. Despite South Africa’s renowned tourism status, only one national park is financially sustainable, highlighting the need for new conservation financing methods. It is critical to bridge the gap between the private equity sector and conservation project development because despite the influx of capital, there is a shortage of investable projects to receive funding. The fund brings together the core expertise to change this and presents a means to channel capital toward habitat expansion in Africa. Projects in which the Habitat Fund invests are set to return profits through three key levers: ecotourism, carbon credits and biodiversity credits. 

Why biodiversity credits?

Biodiversity credits build on the success of carbon credits by valuing entire ecosystems. They provide a quantifiable way to measure and value the services provided by biodiversity-rich areas. By creating a market for biodiversity credits, conservation efforts can be incentivized, unlocking new funding sources. This is crucial for landscapes like the African savanna, which provide essential services but have limited access to traditional funding.

The impact of biodiversity credits:

Implementing biodiversity credits could profoundly impact conservation as many businesses and governments are starting to set biodiversity targets of their own but are given few opportunities to meet these ambitions. Voluntary biodiversity credits will enable businesses and governments to make a significant impact. These credits provide a structured and measurable way to channel funds from willing investors into local and impactful conservation efforts, rewarding those who actively protect biodiversity. Additionally, protecting ecosystems will help prevent the loss of species threatened by climate change. Biodiversity credits offer a tangible solution to achieve these goals, benefiting both wildlife and local communities.

The project

Along with its partner, The Landbanking Group, AMES is working on a pilot project in South Africa to implement a leading methodology for biodiversity credits, catalyzing the recognition of biodiversity credits. In turn, a model can be demonstrated that can be adapted and replicated in other ecosystems across Africa and the world. The development of biodiversity credits involves several key steps, each crucial to ensuring the credibility and effectiveness of the program:

1. identifying a pilot site: The Foundation is testing a framework on their existing reserve in South Africa. On finalisation that framework can be applied to subsequent projects developed through the Habitat Fund. 

2. Securing sponsors: Sponsors are vital in financing development stages and providing technical assistance. The UBS Optimus Foundation and AMES Foundation have committed as a sponsor for the South African pilot project, demonstrating their commitment to biodiversity conservation.

3. Defining methodology: A crucial aspect of biodiversity credits is the methodology used to describe, measure, and value the credits. The Biodiversity Credit Alliance (BCA), launched at COP 15, is working to standardize these methodologies. The Landbanking Group have a unique solution that will work in conjunction with their new Landler platform.

4. Securing a buyer: Finding a willing buyer is essential for the success of biodiversity credits. Buyers voluntarily purchase the credits, providing the financial incentives for conservation efforts.

5. Structuring the program: A structuring partner is needed to package the legal and financial components, ensuring the program meets regulatory requirements and is attractive to potential buyers and sponsors.

6. Establishing regulation: Finally, a regulator is needed to audit the biodiversity methodology and ensure its integrity. While no regulator currently exists, the creation of biodiversity credits is expected to stimulate the formalization of international regulators in conjunction with the BCA.

Conclusion

Biodiversity credits have the potential to revolutionize conservation financing in Africa and beyond. By valuing nature's services, new opportunities for private sector investment in conservation can be created. The AMES Foundation’s work in South Africa is essential to realizing this potential. As biodiversity credits are still developing, the AMES Habitat Fund also leverages proven nature-positive income streams such as ecotourism and carbon credits. This approach aims to connect private sector investment with conservation projects, supporting local communities, financing biodiversity conservation, and generating returns for investors.