Caltivo launches its crisis action plan to help open the doors to private finance in nature

CaltivoIt is a new way to invest in nature at scale, and is launching the “Triple Crisis Action Plan”, a new plan to address the growing triple planetary crisis of global warming, biodiversity loss and water stress.

As the world addresses the latest IPCC report (the Sixth Assessment Report), Cultivo is stepping up its efforts to combat crises by directing investment, particularly private capital, toward projects that address the triple-planet crisis.

Urgent Action Needed to Address the Tri-Planetary Crisis:

  • Climate change: The Earth’s surface temperature was 1.09°C higher in the decade between 2011-2020 than it was between 1850-1900. The past five years have been the hottest on record since 1850. The recent rate of sea level rise has nearly tripled compared to 1901-1971.
  • Biodiversity loss: The number of wildlife has decreased, on average, by 60% since 1970 and there is a potential for our actions to cause the loss of a million species.
  • Water stress: 2.3 billion people live in countries experiencing water stress, of whom 733 million live in high countries with serious water stress. Water stress is a global crisis and severely affects many developed countries. For example, in May 2021, 41 out of 58 California counties were in a state of emergency due to drought.

By 2050, the total investment needs for nature-based solutions will cumulatively reach $8.4 trillion, reaching more than $536 billion annually, four times the amount invested today.

Currently, only 14% of funding for nature-based solutions comes from private equity. Increased investment from private equity firms is essential to fill trillions of dollars in needed funding. Based on preliminary research with financial institutions, corporations, and foundations, Cultivo is launching a 5-step business plan to help launch private finance into nature.

1. Presenting nature as an investment attractive asset

For investors, it is often very difficult to evaluate a nature-based project as an investment. Where does the money come from? How is the return generated? Cultivo’s new plan packages nature-based solutions into investment products, while demonstrating financial, social and environmental returns.

2. Using technology to reduce transaction costs and create market efficiencies

i) For financial institutions, the cost of searching and establishing high-quality nature-based projects is very high.

Cultivo’s new plan will leverage proprietary algorithms and remote sensing technologies to reduce transaction costs involved in identifying high-quality nature-based solutions.

  • Cultivo uses an in-house research and creation team to do the “heavy lifting” to identify the best assets to invest in.

2) The cost of continuous monitoring of projects can be high and affect the margin of the project.

  • Cultivo Technology Hub uses its own and third-party tools to provide digital MRV (Monitoring, Verification and Reporting) to monitor project vitals and reduce monitoring costs.

3. Take a holistic approach

• It is important not to focus only on carbon. Cultivo’s new plan takes a more holistic approach.

• Cultivo assesses the “natural capital intensity” of each project, which means each layer of services provided by nature (water, biodiversity, carbon, food, etc.)

• The Cultivo Technology Hub contains tools that allow analysis of the effects of water stress, biodiversity loss and climate change.

4. Measure the right traits and choose the right criteria

  • When investing in nature at scale to make a real impact, it is essential to find the right standard that addresses multiple issues, not just one. China Construction Bank of vera It is a good example of a standard applied to Cultivo-backed investments.
  • The new work plan will also ensure that each project includes environmental and social safeguards.

5. Make the data transparent

  • The lack of data disclosure is a major drawback in the market.
  • Cultivo’s approach ensures that all data for nature-based projects is transparent to all stakeholders from start to finish.

Commenting on the launch of the new business plan, Dr. Manuel PinuelaCo-founder and CEO of Cultivo said: “It is critical that we take a holistic approach when it comes to investing in nature. The triple crises of climate change, biodiversity loss and water stress are interconnected and we must address them together and urgently. We can no longer afford any complacency – the future of our children And our grandchildren are in grave danger.High-quality nature-based solutions can address these triple crises and we need to unleash investment in nature at scale and quickly.

“We hope that the harsh nature of this year’s IPCC report will help motivate all of us to act and give financial institutions and private financial companies around the world the impetus to work with us and adopt the plan we are launching today.”

  • Frances Bennell

    Francis is a junior journalist with a BA in Classical Civilization, with a special interest in North and South America.

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