Environmental Finance and Learning Fund: initial insights

Last month, we held the first meeting of the participants of the Environmental Finance and Learning Fund, a new initiative we launched back in December with the Environmental Funders Network (EFN) to help unlock significant new funding for nature recovery.

This new collaborative Fund was developed in response to growing interest from funders wishing to learn more about environmental investing, alongside a greater need for ‘pathfinder funding’ (early stage, high risk repayable finance) to support and scale a new wave of environmental initiatives.

There are two elements to the Fund:

• A matched funding pot for making environmental investments over the next three years. Participant contributions are matched by Esmée 3:1.
• A learning programme that will run alongside the matched funding pot where participants will learn in real time about Esmée’s social investment process, as well as from experts and from each other.

15 participants and £2.7m in total for environmental investments

The Fund closed on 31 March 2022, and we're delighted to have raised a total of £679,000 from 15 individuals and donors. With Esmée’s matched funding, the Fund has a total of £2.7m to deploy in environmental investments over the next three years.

What we’ve learned so far

We’ve learnt a lot in the process of setting up and launching the Fund:

1. There is appetite among funders to explore environmental investing. When we launched the Fund back in December, we set a minimum threshold of £400,000 that we needed to launch the Fund. We were delighted by the level of interest we received, and that the total amount raised greatly exceeded our expectations.
2. Keeping the structure simple allowed us to launch the Fund with minimal resources. Esmée is not a fund manager and nor do we have the resources to set up or manage a social investment fund. For the Environmental Finance and Learning Fund, participants grant-funded their contributions, which we will then invest in environmental initiatives. While returns from these investments won’t be returned to participants, we have committed to recycling these into future environmental initiatives.
3. Specialist partners to support the delivery has been vital. The learning programme that sits alongside the funding pot is crucial to the success of the Fund, and EFN is leading on co-designing this with participants. EFN has been a partner in developing the Fund from the start and it made sense that it would also lead the learning programme - on account of their expertise in both the environmental sector and working with individuals and foundations.

Through the Environmental Finance and Learning Fund, we hope to help build the environmental investment market by increasing the number (and volume) of investors offering pathfinder funding to highly impactful environmental initiatives. We hope the Fund will help funders learn more about environmental investing, and to support them to make informed decisions about investing themselves directly.

Alongside our partners, we look forward to sharing our learning along the way. If you have any questions or feedback about this work, do get in touch.

Participants in the Fund include:

• Alexia Tye
• Carman Family Foundation
• Catherine Bryan
• Cindy Palmano
• David Holberton
• Martin Stanley
• Michael O’Mara Books
• Rachel Starling
• Roger Ross
• T&J Meyer Family Foundation
• The AIM Foundation
• The Castansa Trust