Using social investment to improve our natural world

Woodland Trust

Sarah Hedley, Esmée’s Social Investment Portfolio Manager, writes about our social investment plans to improve our natural world. This is part of a series of blogs on how our social investment strategy will contribute to Esmée’s mission.

We believe that social investment has an important role to play in ensuring our natural world is restored and protected. At Esmée Fairbairn Foundation, our work focuses on three impact goals:

  • Protecting species and habitats
  • Sustainable and ethical food; and
  • Clean and healthy freshwater

Nature finance is generating huge interest from investors across our spectrum of capital. For our social investment work, we take an 'impact-first' approach. This means starting with the environmental benefit we want to achieve and then developing a financing approach that will best deliver this. Learn more about the different ways we use our capital to support our aims.

We want to support the highest impact opportunities – whether that is direct environmental benefits to nature and communities, or more strategic initiatives that crowd in new investors to meet the financing gap for nature.

We see four exciting opportunities that will form our social investment priorities for Our Natural World over the next few years.

1. Evolving our Land Purchase Facility

There is huge potential for our successful Land Purchase Facility to grow. The Facility has already supported 2,400 hectares of land to be restored or preserved for nature, such as 690-hectare Smithills Estate on the edge of Bolton.

Competition for land is growing, so we need to ensure that the Facility can respond nimbly, both in terms of speed and investment size. We see an overlap with our Creative, Confident Communities work, and will explore how the Facility can support a wider range of partners, particularly local groups looking to purchase land for their communities.

2. Early-stage high-integrity nature finance

We’re proud to have supported the Wyre Natural Flood Management Project, which brings together the Rivers Trust with investors, local authorities and corporates to finance the building of leaky dams, the creation of bog and other measures to reduce the frequency of flooding to a number of properties in Lancashire. We are supporting the development of a number of other projects in this space, including through the Investment Readiness Nature Scotland grant scheme. And over the next 12 months, we will be exploring further measures to support project developers across the UK.

We want to support more nature finance projects where they deliver real and sustained gains for nature and people. This is an emerging market that comes with ‘greenwashing’ risk so our focus will be on early stage, high-integrity opportunities – helping them refine and demonstrate their approach and, for some, attract scale-up funding.

3. Bringing environmental investors together

We will make the greatest progress collaborating with others. Our Environmental Finance and Learning Fund brings together philanthropists and investors to learn and share their experiences of environmental investing.

Over the next couple of years, we want to explore opportunities for deeper collaboration. This might mean more intentionally sharing deals and co-investing. It could also mean working closely with a small group to progress a particular theme or sector. We’re open to what this looks like and would love to hear from other investors about how we could work together.

4. Backing mission-driven environmental ventures

We are seeing more social enterprises and mission-led businesses emerge that share our aims and priorities for Our Natural World – many of which are owned or led by local communities.

We’ve already invested in small agroecological businesses via the Real Farming Trust’s LEAP Fund, and have invested directly in Mission Kitchen and Oooby – all of which are building a more sustainable and equitable food system. Over the coming years, we will continue to look for ways to provide flexible, patient finance and wraparound support to help more enterprises like these to flourish.

We're excited about the role that social investment can play in delivering Our Natural World strategy. We are always interested in hearing about work that aligns closely to our strategy and approach. You can reach me at sarah.hedley@esmeefairbairn.org.uk.

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