XF-OUCAK9F-D Research / Academic Paper ACTIVE
Impact investing in biodiversity conservation with bonds: An analysis of financial and environmental risk
Abstract
Received: 18 August 2020 Revised: 18 December 2021 Accepted: 30 January 2022 DOI: 10.1002/bse.3135 R E S E A R C H A R T I C L E Impact investing in biodiversity conservation with bonds: An analysis of financial and environmental risk Benjamin S. Thompson School of Social Sciences, Faculty of Arts, Monash University, Melbourne, Victoria, Australia Correspondence Benjamin S. Thompson, School of Social Sciences, Faculty of Arts, Monash University, Melbourne, Victoria, Australia. Email: benjamin.thompson@monash.edu Abstract Impact investments have the dual goals of generating profit and environmental and/or social impact from the same project or enterprise. This article examines recent impact investments in biodiversity conservation—specifically, debt finance in the form of conventional bonds and impact bonds. The proceeds of these bonds finance projects aiming to enhance forest management, sustainable agriculture, endangered species protection, ecosystem service provision, and nature-based solutions to cli- mate change such as REDD+. The article scrutinises whether these dual goals are achievable by evaluating the financial risks and impact risks within each bond's theory of change. Risks stem from projects with vague cashflow forecasts, project sites with low or ambiguous threat statuses, and simplified impact metrics that may measure activities or outputs—rather than impact. Risk mitigation strategies involve using baselines and counterfactuals to establish additionality, …
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Topics
Biodiversity BondsImpact BondsMulti-Bond Case StudyNature Finance
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People Cited in This Document
- Benjamin S. Thompson author Monash University
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Wiley (Business Strategy and the Environment) (2023). Impact investing in biodiversity conservation with bonds: An analysis of financial and environmental risk. XFID: XF-OUCAK9F-D. Retrieved from https://xframework.id/XFOUCAK9FD
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