Reflections on Efficiency: How can we make investing in environmental projects cheaper and easier?
By Carolyn duPont, Quantified Ventures
Last month, I had the opportunity to spend a few days at the Conservation Finance Roundtable at the beautiful offices of the McKnight Foundation in Minneapolis. Convened by the Conservation Finance Network and USDA’s Natural Resources Conservation Service (NRCS) group, the event focused on innovative agricultural investments — particularly those supported through NRCS’s Conservation Innovation Grant (CIG) program.
Together with colleagues from the Chesapeake Bay Foundation and Land O’Lakes, I presented on our efforts to connect upstream agricultural producers with downstream municipalities seeking to reduce run-off at the source rather than paying for expensive downstream water treatment.
Others shared similarly inspiring and innovative ideas: Fresh Coast Capital’s development of urban agricultural stormwater projects in Peoria, IL; the i2 Capital and Nature Conservancy partnership that is establishing a water fund in the Brandywine-Christina watershed; and Liquid Assets, which is making water investments in the southwest United States.
A cross cutting theme and question prompted discussion for all: how can we make this simpler — and by extension, cheaper and easier?
This is precisely what drives our work at Quantified Ventures. As we look to bring Environmental Impact Bonds (EIB) to scale, we engage with our partners to ensure that pursuing an EIB is the cheapest, easiest approach — that there is a true capital gap that needs to be addressed. This is in line with the roadmap recently outlined by GIIN to improve the landscape of impacting investing — specifically by expanding the set of existing products that can make an impact and aligning incentives among investors and fund recipients.
More broadly, this question is a call to action for us: as we work to get transactions done, we focus doggedly on how to make it “cheaper” and “easier.”
On the “cheaper” side, we’re exploring partnerships with organizations who can bring down the costs of site selection, measurement and monitoring, and issuance. One example is our work with Neighborly on the Rockefeller projects. They’ll be issuing EIBs publicly on their platform in Atlanta, which will encourage standardized documentation for EIBs and issuance at a lower rate than traditional bonds. We’ve also just started collaborating with Upstream Tech on our work with Environmental Defense Fund, as we all explore the viability of an EIB for wetland restoration in Louisiana — bringing Upstream’s satellite-enabled sensing technology to a cheaper, more transparent monitoring of wetland health over time.
On the “easier” side, some of that comes with time and the internalization of lessons learned on the front lines of this field. As we work on our current round of transactions, we’re capturing and using what we’ve learned — creating template documents, tools, and processes that other cities can pick up and use in the future. And the more transactions we do, the better we will understand what makes deals both efficient and successful.
Between here and “cheap and easy,” there is a lot of ambiguity and hard work for the Quantified Ventures team to navigate with our partners, but we do it all with the future in mind and the knowledge that scalability of this model means making these deals look simple and attractive to investors of all types.
Carolyn duPont is a Director at Quantified Ventures, where she leads the organization’s work pioneering innovative and scalable finance for solving environmental challenges.