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Green bonds generating new funding for biodiversity

Mr Stephen Liberatore Stephen Liberatore, Head of ESG and Impact Global Fixed Income at the pension fund Nuveen and Mr Kevin Bender, Director of Greening Sovereign Debt at The Nature Conservancy, shared lessons about environment bonds. PHOTO/Olivier Besson/GEF


New financial structures connecting capital markets with conservation have big potential to close the global funding gap for biodiversity, investors and environmental experts have said.

According to, Dr Jared Bosire, Programme Manager, UNEP ~ Nairobi Convention, says that green bonds will play a key role in environmental conservation.

“Green bonds were created to fund projects that have positive environmental and climate benefits and in my view time has come for Kenyans to start taking investment in this area seriously,” he said.

Dr Bosire was speaking during a meeting bringing together journalists, environmental experts and the civil society under DUNIA journalism and climate emergency an initiative by the French government to strengthen the role of the media as a tool for monitoring and raising awareness on issues associated with climate change and its impacts.shared during the UN Biodiversity Conference in Montreal.

And Mr Stephen Liberatore, Head of ESG and Impact Global Fixed Income at the pension fund Nuveen, while speaking during the UN Biodiversity Conference in Montreal said historically the global economy has done a tremendous job of being able to value the concept of extraction or exploitation of natural resources.

“We are just now starting to get to a place where we are able to more appropriately and accurately value the concept of conservation, and environmental health and environmental stewardship,” he said.

Speaking at a Global Environment Facility-hosted event on capital markets, Mr Liberatore described his organization’s path to investing in biodiversity-focused products such as the Wildlife Conservation Bond, the Seychelles’ sovereign blue bond, and the Barbados’ debt-for-nature swap.

“We look at opportunities from a return perspective and also to see what kind of impact is being made,” he said. “When we look for transactions, we are looking for the involvement of organizations like the World Bank, the GEF, or TNC because they have a lot of expertise and a lot of credibility on this space.”

A report by GEF says Nuveen was the lead investor in the Wildlife Conservation Bond, known as the “rhino bond,” which was issued by the World Bank in March 2022 with a future payout funded by the GEF. The first-of-its-kind bond links investors’ returns with the survival of an endangered species – the black rhino – while also supporting conservation activities at two nature reserves in South Africa.

“The rhino bond was a very interesting and important structure for us. We think it is a model that we can replicate going forward,” Mr Michael Bennett, Head of Market Solutions and Structured Finance at the World Bank Treasury said.

Michael Bennett, Head of Market Solutions and Structured Finance at the World Bank Treasury. PHOTO/Olivier Besson/GEF

Bennett stressed that while biodiversity-related bonds are new, they have been carefully designed to attract and meet the risk-return profile needs of institutional investors. The five-year, $150 million bond was “not a philanthropic exercise,” he underlined.

GEF Senior Blended Finance Specialist, Ms Avril Benchimol said the rhino bond launch was an important step toward building a biodiversity market that establishes large investors as a stable source of funding for conservation activities.

“The interesting part of this whole transaction was that the GEF as a donor, and an issuer that is AAA rated like the World Bank, created a structured bond that can attract the money of the big institutional investors for conservation,” she said.

Other innovative financial solutions that are gathering steam are sovereign debt-for-nature swaps, where debt restructuring at better financial terms can help governments reduce their borrowing costs in capital markets and in turn invest part of their credit savings in environmental initiatives such as marine conservation projects.

Kevin Bender, Director of Greening Sovereign Debt at The Nature Conservancy, shared lessons from sovereign debt conversions his organizations has worked on, including in Barbados and Belize. He stressed the important value of such transactions, which result in lower public debt levels in addition to higher biodiversity spending.

“We are creating savings from the debt conversion and putting that into biodiversity,” Mr Bender explained. “Our goal is to make these [transactions] commonplace. The structuring we are doing is not that complicated, we are just piecing it together in an innovative way and putting it into conservation. As we make these products more simple and more commonplace, that market will grow exponentially.”

The GEF’s Benchimol noted the significance of rising investor interest in conservation-related financial products at a time concerns are running high about how to finance urgent global biodiversity needs.

“I think what’s important here is that the financial innovation is already happening and attracting private sector investment from big institutional investors,” she said.

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