Together with the Environmental Funders Network (EFN), we have launched the Environmental Finance and Learning Fund, a new collaborative fund, to help unlock significant new funding for nature recovery.
The Environmental Finance and Learning Fund has been created 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.
With this 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. Designed to support those contributing to learn by doing, we hope the Fund will help funders learn more about environmental investing, and to support them to make informed decisions about investing themselves directly.
The Environmental Finance and Learning Fund consists of two elements:
- Peer learning programme
This will be co-designed with those contributing to the fund and in collaboration with the Environmental Funders Network.
- Grant match fund
Those contributing to the fund will make a grant to Esmée, which we will match fund, and invest into environmental initiatives.
It will last for three years, and we will not charge any management fees. This means that all grant money contributed will be exclusively used for match funding into environmental investment initiatives.
Funding offered through this initiative will be considered in line with our aims to improve Our Natural World and strengthen UK communities, alongside our approach to social investment. Organisations looking for funding should apply through our normal application process.
Ben Smith, Head of Social Investment, said:
"Over the last 20 years, we have invested nearly £30m into over 50 environmental investments. During this time, we have seen the growth in interest from funders in becoming investors, yet barriers around size, capacity and technical ability can prohibit their work. In response to the growing need for pathfinder capital, we’re delighted to be working with EFN and ambitious funders in an attempt to grow and develop the environmental investment market. In doing so, we hope to be able to respond to the demand from incredible organisations undertaking new approaches to tackling the climate and biodiversity crisis we face."
Florence Miller, Director of Environmental Funders Network, said:
"EFN aims to improve the effectiveness of environmental philanthropy. But making grants is of course only one way in which funders can make a difference; they can also be putting their investments to work supporting environmental solutions. We’re delighted that Esmée Fairbairn Foundation will be helping to bolster the skills of EFN members participating in its Environmental Finance and Learning Fund and we’re looking forward to supporting the process to create a cohort of funders confident to continue investing in green solutions."
Why we are launching the Fund
We know that securing more money is crucial if we are to make progress in restoring nature at the scale and pace that is needed. A report from Environmental Finance and Ecosystems Knowledge Network, which we commissioned, shows there is opportunity for considerable growth in new funding models for environmental impact. It also found that whilst there are notable projects in all environmental sectors that are using innovative models to attract new sources of funding, most are at a relatively early stage, and the type of funding required is not widely available. We are also keen to ensure that projects are based around robust environmental impact and are designed with, or by, the communities they benefit.
The Environmental Finance and Learning Fund builds on over 20 years of social and environmental investing, alongside our partnership with Defra and the Environment Agency, and through initiatives like LocalMotion and the Act for Change Fund with Paul Hamlyn Foundation. More recently, we have also been working with the Green Finance Institute and Ecosystem Knowledge Network on sharing experience of high impact projects and impact-focused investment opportunities.
If you are a funder and would like to learn more about the Environmental Finance and Learning Fund, please get in touch.