The world is experiencing two closely related crises that threaten our way of life: the climate and biodiversity crises. The immense scope and complexity of these challenges require innovation, multi-sector collaboration, and funding at an unprecedented scale.
Public-private partnerships are essential to mobilising the investments needed to respond to these crises. One promising approach, blended finance, uses catalytic capital from public and philanthropic sources to increase private sector investments in sustainable development. These partnerships are allowing philanthropy, government, and the private sector to work together to manage risk, promote scalability, and ensure the long-term viability of investments.
Now is the time to generate impactful investments for conservation. The Global Fund for Coral Reefs – launched at a High-Level Event at the United Nations General Assembly last year – is a model for what this can look like. The Global Fund is the first UN Trust Fund dedicated to Sustainable Development Goal 14 (‘Life Below Water’) and the first blended finance instrument focused on coral reefs.
The case for coral reefs
Our planet lives and breathes, literally, by virtue of our oceans. Oceans produce 50 per cent of the oxygen we breathe, regulate our climate, and provide food and support economies for billions of people.
Coral reefs, which occupy a tiny fraction of the ocean floor, are among the most diverse and valuable ecosystems on the planet. They sustain more than a quarter of all marine life and drive $2.7 trillion dollars in ecosystem services.
At the nexus of the climate and biodiversity crises, coral reefs are on a path to catastrophic collapse. Global reports indicate corals are facing the most rapid increase in extinction risk of all ecosystems, threatening the safety, wellbeing, livelihood and food security of more than one billion people.
Despite the stakes, a Conservation for Biodiversity High-Level Panel assessment estimated that the global investment required for coral reef protection is approximately seven times greater than current funding levels.
Building a blended finance model for our oceans
The Global Fund for Coral Reefs’s partners – which include the Government of Germany, Paul G. Allen Family Foundation, Prince Albert II of Monaco Foundation, UN Development Programme, UN Environment, UN Capital Development Fund and BNP Paribas – are using blended finance to meet this challenge. The Global Fund will support business and finance mechanisms that improve the health and sustainability of coral reefs and associated ecosystems, while empowering local communities and enterprises.
The Global Fund will move beyond fragmented, project-by-project funding to a comprehensive global strategy that tests innovative approaches that can be replicated at scale. We plan to work with partners in developing countries with climate-resilient coral reefs to identify investable projects that meet conservation objectives and the needs of communities, governments, and investors.
Our vision for catalytic funding starts in Fiji
This month, the Global Fund Executive Board approved a $4.7 million project in Fiji that demonstrates our vision for how this blended finance vehicle can meet both conservation and investment goals. In Fiji, we are investing in a technical assistance facility, building on work by our local partner, Matanataki, to accelerate ten projects in Locally Managed Marine Areas (LMMAs). We are also investing in a sanitary landfill and eco-fertilizer factory that will protect nearby coral reefs from waste and fertilizer runoff, create jobs, and yield a return for investors.
Over the eight-year life of the project, we anticipate the Global Fund’s investment will help catalyse more than $50 million in public and private sector funding. Grants and equity investments will make it possible for the fund to deliver smart solutions at scale.
At the Paul G. Allen Family Foundation, we strive to ensure that our grantmaking is partner-driven and catalytic. The Global Fund for Coral Reefs represents these principles and shows what is possible when multi-sector partners act with urgency and creativity, mobilise resources, and commit to a common vision that draws on their respective strengths.
Chuck Cooper is Managing Director of Government Affairs at Vulcan Inc.