Creating Mechanisms for Conservation Finance in Southeast Asia

Conservation finance represents one of the most underdeveloped private-sector investment opportunities for an emerging asset class. Linking together the two sides—the need for conservation funding (demand) and the availability of investments with conservation impact (supply) is critical to enable scalability of both the investment vehicles offered to financial markets and the projects that deliver quantifiable and verifiable financial and conservation impacts.

To this end, the Milken Institute’s Asia Center convened a Financial Innovations Lab® on February 3, 2015, in Singapore with industry stakeholders, donors, and investors to discuss potential conservation finance models for Southeast Asia. During the daylong workshop, participants reviewed current and potential financing mechanisms, and discussed the barriers to implementing these models in the region.

The discussion led to the prioritization of applicable financing models in order to map out opportunities to engage the widest variety of investors. Social impact bonds, risk mitigation products, fixed-income products, and impact investing funds were all discussed. Participants also outlined recommendations to improve the education and awareness of conservation finance, including technical assistance programs for nongovernmental organizations (NGOs) and improved application of environmental, social, and governance (ESG) screens for investors.