Investing in Impact on the Ground - eco.business Fund Impact Report 2018
Read the eco.business Fund’s first Impact Report, “Investing in Impact on the Ground.” It provides an in-depth look into the progress the eco.business Fund has made since inception and presents the fund’s approach to making a real difference for people and the planet. In this report you will learn more about what impact the eco.business Fund creates: how the fund promotes change in financial institutions’ practices; how it supports its end borrowers in integrating sustainable practices into their production processes, and how the fund facilitates an enabling environment for a greener economy.
Read the full Impact Report.
The fund aims to promote business and consumption practices that contribute to biodiversity conservation, to the sustainable use of natural resources and to mitigate climate change and adapt to its impacts, in Latin America, the Caribbean, and sub-Saharan Africa.
The fund takes a comprehensive approach to conservation finance that involves not only improving the sustainability of individual practices, but also strengthening the systems that surround and enable these practices to generate deep, long-term impact.
To this end, the fund applies a two-pronged strategy:
- Sector focus: The fund’s activities focus on those economic sectors that are highly consumptive of natural resources – and affected by climate change. These especially include agriculture, forestry, fisheries and aquaculture, and tourism.
- Geographic focus: The fund is active in Latin America, the Caribbean and sub-Saharan Africa, regions where biodiversity hotspots are vulnerable not only to the effects of climate change but also face an ever-increasing pressure through unsustainable practices and irresponsible use of resources, such as deforestation.
Since its inception in December 2014, the eco.business Fund has contributed to:
All figures as of June 2019 based on
eco.business Fund activities in Latin America
The Pathway to Impact
The eco.business Fund provides dedicated financing and technical assistance to local financial institutions and businesses who are committed to implementing sustainable practices. Examples of this include measures to contribute to forest and landscape restoration and conservation, such as supporting agroforestry systems, as well as practices that reduce the pressure on natural resources, such as water saving technologies or the sustainable intensification of agriculture.
By raising awareness of the importance of sustainable production practices, engaging with sustainability standards, and connecting conservation finance practitioners, the fund also contributes to building an enabling environment for a greener economy.
To ensure the sustainability of activities receiving funding, all of the recipients of eco.business funding must meet at least one of the following criteria: hold an eligible sustainability standard, or implement one of the sustainable production practices either from the fund’s “Green List” or a practice fully aligned with the fund’s mission.
This approach connects finance with sustainability by directing lending to businesses and producers that hold internationally-recognized sustainability standards. Financial institutions are motivated to take a proactive, inclusive approach to supporting businesses and producers that meet the most demanding voluntary sustainability standards, such as Fairtrade, Rainforest Alliance, FSC, and others. Working with standards constitutes a cost-effective approach to financing sustainable production, as the monitoring and verification of sustainable practices is led by certified and independent bodies. It also enables the fund to deliver deeper analysis of the benefits of its investments and draw upon the standards’ own work on impact measurement.
A few examples are:
In sub-Saharan Africa, the eco.business Fund can also engage in strategic partnerships with commodity traders or other real-sector intermediaries that are focused on improving sustainable sourcing within their value chains through standards or programs that seek to verify the sustainability of suppliers of raw materials and/or third-party producers.
The list of production practices eligible for investment (“Green List”) contains screened and pre-approved practices with a positive impact on sustainability.
A few examples are:
Our Impact Assessment Approach
The eco.business Fund continuously monitors and assesses its impact based on key performance indicators that reflect the fund’s impact pathway.
To track progress against these indicators, the fund combines first-hand information from investees with technical parameters from third-party evidence (including scientific literature, data, and reports from international organizations) as well as case studies conducted by the fund. On-site visits to investees help to verify or adjust certain impacts and to gather both qualitative and quantitative impact information.
Our Impact Management System
For the eco.business Fund, assessing impact is just as important as tracking financial performance. It provides a constant feedback loop of how well the fund is progressing towards its goals. It also provides insights and learnings that enable us to continuously fine-tune our strategy to enhance our reach and depth of impact. Impact management is therefore integrated into every step of the investment and technical assistance cycle.
The eco.business Fund also promotes environmentally and socially sound practices in its investment activities, by ensuring that all investees comply with the fund’s environmental and social requirements. Through the eco.business Development Facilities, the fund also provides support to partners to improve environmental and social risk management.
Our Contribution to the United Nations’ Sustainable Development Goals (SDGs)
The eco.business Fund contributes to achieving the following SDGs through financing focused on biodiversity conservation, the sustainable use of natural resources, and the mitigation of climate change and adaption to its impacts. It works by channelling debt financing via financial intermediaries, real-sector intermediaries, such as commodity buyers or aggregators, as well as directly to eligible businesses:
The fund contributes to strengthening sustainable food production systems and implementing resilient agricultural practices.
The fund supports production practices that reduce the contamination of water streams.
The fund boosts sustainable businesses and jobs through its support to certified companies.
The fund contributes to reduce the environmental footprint of production by supporting the adoption of more sustainable practices.
Through its support to sustainable forestry and to agroforestry practices, the fund contributes both to mitigate climate change and to become more resilient to its effects.
The fund contributes to the preservation of aquatic ecosystems through its support to sustainable fisheries.
The fund contributes to the preservation of ecosystems and biodiversity through its support to deforestation-free activities, forest landscape restoration and to sustainable farming.
The fund mobilizes resources and pools capital for sustainable development and supports partnerships for systemic change.