November 15, 2022

By Christine Desrochers and Michael Twigg

Nature conservation has been chronically underfunded in Canada and throughout the world, yet natural spaces are critical for biodiversity, climate resilience, and human health. The food we eat, the air we breathe, the water we drink, and the homes we live in all depend upon local ecosystems. Nature also plays a critical role in mitigating the climate crisis. Several international commitments have been made at the recent UN Climate Change Conference (COP27) to advance nature-based solutions and conserve 30% of land and water by 2030.

The conservation and restoration of Canadian natural assets will be critical to meet international commitments and support our growing communities. To do this, we must find innovative ways to invest in our valuable green spaces. This is particularly true for Ontario’s Greenbelt: with ongoing pressures from regional urbanization, protections are being eroded and the costs of development are increasing for many local municipalities. Recently-proposed changes to legislation are also paving the way for urban development in currently protected areas. The situation is urgent and novel solutions must be accelerated.


The value of nature

The natural assets in the Greenbelt are worth more than $11 billion for climate mitigation, which continues to grow year over year as the value of carbon increases.

Every year, the ecosystem services of the Greenbelt provide an additional $3.2 billion worth of regional benefits in water supply, agriculture, outdoor recreation and enjoyment, clean air, and flood protection. These services are critical for the resilience of communities throughout the Greater Golden Horseshoe, which already experience severe impacts such as flooding. If current trends of land use change continue, the natural systems in the Greenbelt will no longer be able to support our growing cities.

Funding to support Ontario’s Greenbelt is more critical than ever. The business case for investing in the Greenbelt is clear and accelerating these investments represents a huge opportunity to increase prosperity and support growth in the region.


Blueprint for conservation finance in the Greenbelt

With the support of the Greenbelt Foundation and the Insurance Bureau of Canada, Smart Prosperity Institute is developing a blueprint for financing conservation and restoration projects in Ontario’s Greenbelt. The blueprint will be the first of its kind in Canada and will build on recent calls from local stakeholders to provide a clear roadmap to accelerate the development of conservation finance projects.

In October 2022, SPI hosted a workshop at the Center for Social Innovation in Toronto, inviting sector representatives to contribute to this exciting project. Representatives from Conservation Authorities, government, finance, insurance, consulting, and NGOs joined us for an afternoon of thought-exchange. The workshop began with a presentation from the Intact Centre on Climate Adaptation discussing the crucial role of natural asset accounting for advancing conservation finance. SPI presented the draft blueprint, outlining a stepwise process for matching conservation finance mechanisms to appropriate projects. Participants exchanged ideas and experiences around specific conservation finance mechanisms and how they could be applied in the Greenbelt.

The main takeaway from our workshop is the need for more collaboration across sectors and regions to scale projects and build capacity.


Collaboration is key

At the October workshop, participants expressed the need for more collaboration in this growing field. The whole region surrounding the Greater Golden Horseshoe has the potential to benefit from targeted conservation and restoration projects in the Greenbelt. Novel funding opportunities are needed to accelerate investment and realize these projects before more natural spaces and farmland within the Greenbelt are lost. Effective collaboration across sectors will be critical to build the scale and capacity required for successful implementation.


Scaling up

Many investors are looking to add positive environmental and social benefits to their portfolios, however most conservation projects are too small to attract the interest of large investment funds. Pooling multiple similar projects together would build a stronger business case due to economies of scale. A more diverse portfolio can also help reduce investment risk. Another benefit of pooling projects together is that it widens the investment scope, creating the opportunity to maximize benefits by targeting optimal regional projects. Canadian examples of grouped projects are bonds issued by the City of Toronto and the government of Quebec.


Building capacity

Conservation finance projects require significant human capital and expertise to establish and manage. The lack of capacity within institutions was highlighted as a major barrier to exploring alternative funding mechanisms. Project pooling and effective partnerships across sectors could distribute the workload and streamline project implementation. Collaboration would also facilitate knowledge sharing and build industry confidence in this new and growing field.


Data can bridge the gap between stakeholders

There is a growing yet diverse understanding of the value of natural assets. For collaboration to work for conservation finance projects, it will be important to develop guidelines, common knowledge, and standardized language so that the various stakeholders can communicate effectively. This takes time, however, and will require facilitation at the outset. Data can be used to bridge the gap between stakeholders. There is recognition that the communication of supporting data must be tailored to each audience to be meaningful and useful. The presentation and communication of data for conservation finance projects will therefore be key for engaging multiple stakeholders, advancing pilot projects, and increasing investor confidence.


Nature on the world stage

Smart Prosperity Institute will be hosting a webinar on December 6, 2022 to launch our Conservation Finance Blueprint for Ontario’s Greenbelt in advance of the UN Biodiversity Conference (COP15) in Montreal from December 7-19, 2022. COP15 will set the course for the Post-2020 Global Biodiversity Framework, which recognizes the urgent need for policy action and new financial models to conserve and restore natural ecosystems. Near-urban greenspaces like the Greenbelt are expected to play a critical role in addressing international biodiversity agreements to the benefit of human health and wellbeing.

SPI will be in attendance at COP15 to build momentum for increasing investments in nature using a conservation finance approach.

Sign up for our newsletter for the latest information on this exciting project and our other upcoming conservation finance initiatives! Register for the December 6th launch webinar here.

Michael Twigg

Program Director, Land-use, Nature, Agriculture