Cultivo Launches Its Crisis Action Plan To Help Unlock Private Finance Into Nature

Cultivated, a new way to invest in nature on a large scale, launches its “Triple Crisis Action Plan”, a new plan to fight against the worsening of the planetary triple crisis of global warming, loss of biodiversity and water stress.

As the world processes the latest IPCC report (Sixth Assessment Report), Cultivo is stepping up its efforts to fight crises by channeling investments, especially private capital, to projects that respond to the triple global crisis.

The need for urgent action to face the triple planetary crisis:

• Climate change: The global surface temperature was 1.09 ° C higher during the decade 2011-2020 than between 1850-1900. The past five years have been the warmest on record since 1850. The recent rate of sea level rise has almost tripled from 1901-1971
• Loss of biodiversity: Wildlife populations have, on average, declined by 60% since 1970 and our actions could result in the loss of a million species.
• Water stress: 2.3 billion people live in countries under water stress, of which 733 million live in countries under high and critical water stress. Water stress is a global crisis and acutely affects many developed countries. For example, as of May 2021, 41 of 58 counties in California were in a declared drought emergency.

By 2050, total investment needs for nature-based solutions will total $ 8.4 trillion, reaching over $ 536 billion annually, four times the amount invested today .

Currently, only 14% of funding for nature-based solutions comes from private capital. Increasing investment by private equity firms is critical to meeting the trillions of dollars in funding needed. Based on primary research conducted with financial institutions, businesses and foundations, Cultivo is launching its 5-step action plan to help unlock private finance in the wild.

1. Offer nature as an attractive asset for investment

For investors, it is often very difficult to assess a nature-based project as an investment. Where does the money come from? How does it generate a return? Cultivo’s new plan bundles nature-based solutions into investment products, showing financial, social and environmental returns.

2. Use technology to reduce transaction costs and create market economies

i) For financial institutions, the cost of researching and creating high quality nature-based projects is very high.

Cultivo’s new plan will leverage proprietary algorithms and remote sensor technologies to reduce transaction costs involved in identifying high quality nature-based solutions.

• Cultivo uses an in-house research and origin team to do the “heavy lifting” to identify the best assets in which to invest.

ii) The cost of continuous project monitoring can be high and impact a project’s margin.

• The Cultivo Technology Hub uses its own tools and third-party tools to provide digital MRV (monitoring, verification and reporting) to monitor the vital signs of a project and reduce monitoring costs.

3. Take a holistic approach

• It is important not to just focus on carbon. Cultivo’s new plan takes a more holistic approach.

• Cultivo assesses the “Density of natural capital” for each project, ie each layer of the services provided by nature (water, biodiversity, carbon, food, etc.)

• The Cultivo Technology Center has tools to analyze the impacts of water stress, loss of biodiversity and climate change.

4. Measure the right attributes and choose the right standards

• When investing in nature on a large scale to create real impact, finding the right standard that addresses multiple issues, not just one, is critical. CCB’s Will see is a good example of the standard applied to investments supported by Cultivo.
• The new action plan will also ensure that each project incorporates environmental and social safeguards.

5. Make the data transparent

• Lack of data disclosure is a major hurdle in the market.
• Cultivo’s approach ensures that all data from nature-based projects is transparent to all stakeholders from start to finish.

Commenting on the launch of the new action plan, Dr Manuel Piñuela, Co-Founder and CEO of Cultivo, said: “It is essential that we take a holistic approach when it comes to investing in nature. The triple crises of climate change, biodiversity loss and water stress are interconnected and we need to address them together urgently. We can no longer tolerate complacency – the future of our children and grandchildren is gravely threatened. High-quality nature-based solutions can cope with these triple crises and we need to unlock investments in nature on a large scale and quickly.

“We hope that the impactful nature of this year’s IPCC report will help us all mobilize and give private financial institutions and businesses around the world the motivation to work with us and embrace the plan we are launching today.” .