Investors critical in bridging the efficiency gap in marine protection, finds Planet Tracker

With widespread funding shortages seeing the majority of Marine Protected Areas fall short on conservation objectives, Planet Tracker introduces a new instrument to incentivise efficiency

LONDON, 7 April 2022: An estimated 70% of Marine Protected Areas (MPAs) are falling short of their conservation goals – a fact which could provide ammunition to those opposed to the creation of new MPAs, Planet Tracker’s latest research reveals.

Launched by Planet Tracker’s Head of Oceans Programme, François Mosnier, at the Convention of Biological Diversity (CBD) in Geneva last month, the research highlights a sector-wide funding gap of approximately USD 100 billon p/a as one of the main reasons behind a lack of success. Two-thirds of MPAs currently have inadequate budgets to meet basic management needs and nine in 10 have inadequate staff capacity.

According to Planet Tracker, a fundamental shift in the approach to financing ocean conservation is urgently needed. Efficiency and funding are often simultaneously lacking, so conditioning additional funding from private sources to greater conservation efficiency could complement existing government and philanthropic money, often not enough to make ends meet.

The IUCN Green List of Protected and Conserved Areas could enable this shift. A certification of conservation efficiency, this global sustainability standard could be used in creative financial instruments – Green List bonds. These bonds link funding requirements to conservation objectives, with progress tracked by IUCN’s robust, scalable assurance mechanism.

Funding from investors allows protected areas to achieve conservation efficiency, and therefore to join the IUCN Green List. On receipt of Green List status, investors are refunded plus interest by the relevant authority.

Mosnier comments: “Many MPAs are established with good intentions but lack sufficient management and enforcement to achieve conservation goals efficiently. These are what we call ‘paper parks’ – and there are plenty out there. But our research shows that most of them could be meeting their objectives with the necessary funding and targeted performance improvements.

“The Green List standard is creating a race to the top in terms of efficiency. By providing payment for performance and independent verification of results, the List is creating opportunities for investors and de-risking public funding. This shift will hopefully see broader recognition and reward of best practices and results in nature conservation down the line.”

James Hardcastle, Head of Protected and Conserved Areas at the IUCN, adds: “While there will likely be teething problems around who pays for transaction costs, what interest looks like and the political landscape, these will smooth out over time. The more bonds that are issued, the easier the process will become. It’s also important to recognise that it’s not a one and done thing; marine protection best practice is constantly evolving along with our understanding of climate risks. MPAs will need to update their management plans as they go or face losing Green List status.”

Advantages for investors:

  • The opportunity to invest in efficient conservation
  • Attractive risk/reward, depending on the conditions agreed
  • A replicable and scalable model for future investment
  • High economic rate of return for investment in protected areas
  • Spill-over benefits for economic operators in the area – better MPAs could improve local communities and businesses in which investors have a stake

 

Advantages for issuers:

  • Outcome-based financing mechanism
  • Risk mitigation
  • Additional funding
  • Improved management efficiency
  • Learnings applicable to other parts of their jurisdiction
  • A replicable and scalable model for future application
  • High economic rate of return for investment in protected areas

 

Advantages for MPAs:

  • Ensures additional funding
  • Ensures adequate
  • level of staffing
  • Maximises changes of conservation efficiency
  • Provides visibility
  • High economic rate of return
  • Spill-over benefits for local businesses and communities

For more information, the talk by Planet Tracker’s Head of Oceans, François Mosnier, is now available online.

– ENDS –

Media contact
Ellie Hyman
Aspectus Group
ellie.hyman@aspectusgroup.com
+44 (0) 7890 072 773

ABOUT PLANET TRACKER
Planet Tracker is an award-winning non-profit financial think tank aligning capital markets with planetary boundaries. Created with the vision of a financial system that is fully aligned with a net zero, resilient, nature positive and just economy well before 2050, Planet Tracker generates breakthrough analytics that reveal both the role of capital markets in the degradation of our ecosystem and show the opportunities of transitioning to a zero-carbon, nature positive economy.

ABOUT OCEANS PROGRAMME
The ongoing degradation of ocean ecosystems is mainly driven by the overexploitation of marine resources, as well as industrial practices destructive to ocean health, which capital markets indirectly support by focusing on short-term returns. These issues are further compounded by negative ‘external’ pressures (e.g., pollution, climate change), which capital markets fail to price in adequately. Planet Tracker’s Oceans Programme investigates the impact that financial institutions can have on sustainable corporate practices through their funding of publicly listed wild-catch and aquaculture companies.

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