Read our latest insight from Craig Melson, Associate Director, Climate, Environment and Sustainability as part of our support for Earth Day.
How can the new World Bank conservation bond scale conservation tech?
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Conservation is expensive. It needs to happen where the species are at risk and to be effective needs the right skills, tools and data. While, in recent years, conservation has gone up the political agenda and tech firms have devoted increasing resources to protect wildlife, it needs more money. The conservation bond aims to bridge this funding gap.
What is this bond?
The bond set up by the World Bank is called the Wildlife Conservation Bond (colloquially the rhino bond') which pays out if the severely depleted black rhino population in two areas of South Africa rises. The five-year bond, which has already raised $150m, will pay investors a 3-9% return depending on how quickly the black rhino population increases. This makes investors, well, invested in the wellbeing of the rhino population and will funnel significant resources towards conservation efforts (current estimates is $10m, a large amount for a small area).
How does this work?
If rhino populations remain flat or decreased investors will receive repayment at maturity with no success payment. If populations grow over 4% investors get the principal amount back plus the success fee. There will be smaller returns if growth is between 0-4% and population growth will be independently verified by the Zoological Society of London.
Innovatively the bond will not pay out any coupon payments to investors, but borrowers will make contributions to support rhino conservation efforts.
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Why rhinos and why South Africa?
Rhino populations have plummeted due to human activity and the lucrative nature of the illegal wildlife trade. South Africa has been selected as it has the infrastructure and stability to support conservation, and if this works, this approach can be replicated and scaled to channel more finance into conservation globally. The two selected areas are also of the right size to trial new technologies and tactics and get investor confidence before scaling the bond up to places it may be more difficult to operate in.
What will it be spent on? More tech?
The nature of bonds is that they don't create action or tell people what to do but create a situation where investors must do something to see a return.
Conservation needs rangers, surveillance, and traditional methods, but like everything else is transforming and becoming more digital. Geospatial technologies are mapping water and resource changes. AI and machine learning is routinely used to support camera traps in specimen identification and drones, motion sensors and 4/5G backed IoT tools can use advanced surveillance to keep national parks safe from poachers.
The tech that is needed is expensive and needs to be scaled up, be appropriate for the challenge and geography it is deployed in, as well as having the confidence of communities and conservationists using it. This innovation from the World Bank has huge potential and with COP 15 part 2 taking place soon and the Taskforce for Nature Related Financial Disclosures in beta stage, we're hopeful this Earth Day that we can get more tech and innovation into conservation efforts.
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