A Venture Capital Solution for Biodiversity Loss

The world's governments have failed to stop biodiversity loss. Can market-based initiatives fare better?

At the Rio Earth Summit in 1992, governments agreed to the UN Convention on Biological Diversity (CBD), a legally binding international treaty that put forth three primary goals: 1) conservation of biological diversity (or biodiversity); 2) sustainable use of its components; and 3) fair and equitable sharing of benefits arising from genetic resources.

A key document in the drive toward global sustainable development, the CBD was established to ensure that national governments develop and enforce the sustainable use and conservation of biodiversity. The treaty entered into force on December 29, 1993.

In 2002, at the Johannesburg World Summit on Sustainable Development (aka "Earth Summit 2002"), the commitment was strengthened when more than one hundred world leaders agreed to "achieve by 2010 a significant reduction in the current rate of loss of biological diversity."


Well, as the proverb goes, the road to failure is paved with good intentions.

"Having reviewed all available evidence, including national reports submitted by Parties…the target has not been met," wrote UN Secretary-General Ban Ki-Moon in his foreword to the United Nations Global Biodiversity Outlook 3, which was released in May 2010. Even more worrisome is the fact that "the principal pressures leading to biodiversity loss are not just constant but are, in some cases, intensifying," Ban said.

"The consequences of this collective failure, if it is not quickly corrected, will be severe for us all. Biodiversity underpins the functioning of the ecosystems on which we depend for food and fresh water, health and recreation, and protection from natural disasters. Its loss also affects us culturally and spiritually. This may be more difficult to quantify, but is nonetheless integral to our well-being."

The reasons for failure, explained BBC environment correspondent Richard Black, include the ”expansion of human cities, farming and infrastructure.” In other words: human overpopulation. There are simply too many of us. We are pushing many other species into extinction.


Governments seem to be unable to stem the tide. Could market-based conservation initiatives help? That's what a new biodiversity-focused fund supporting small sustainable businesses in Latin America hopes to do.

The Multilateral Investment Fund (MIF), a member of the Inter-American Development Bank Group (IDB), the European Investment Bank (EIB), the Dutch Development Bank (FMO) and the Nature Conservancy, has launched the next stage of EcoEnterprises Fund II, a venture capital fund that aims to support biodiversity, preserve critical ecosystems and support local poor by directing capital to community-based sustainable businesses. The MIF is one of the biggest investors in microfinance and venture capital funds for small businesses in Latin America and the Caribbean.

The fund "will provide expansion capital to small sustainable businesses, so they may generate livelihoods for rural communities and preserve ecosystems for future generations," according to an IDB press release.

The first EcoEnterprises fund, a joint-project of the MIF and the Nature Conservancy launched in 2000, invested $6.3 million in 23 Latin American and Carribbean sustainable companies that cover a wide array of eco-friendly products, including organic shrimp, organic spices, FSC-certified furniture, pesticide-free biodynamic flowers and acai palm berry smoothies. Together, these firms have created over 3,500 jobs, benefited almost 300 communities and conservation groups, generated more than $280 million in sales, leveraged $138 million in additional capital and—much to the delight of conservationists and environmentalists—conserved over 860,000 hectares of land (around 3,320 square miles, or about a third of the area of Massachusetts).


Those are impressive figures. But even with a capitalization of $20.5 million, the EcoEnterprise Fund II will still just be another drop against the tide. The vast majority of the world's corporations are pure hell on biodiversity.

"In 2008, a staggering 3,000 corporations caused $2.2 trillion of biodiversity ecocide; the figure for the following year is a rumoured doubling to $4 trillion," writes environmental lawyer Polly Higgins on Resurgence.org. "2010 was the International Year of Biodiversity, and yet the continued destruction of our ecosystems is expected to be exponentially higher."

Higgins has called for a "law of ecocide," which she believes "will create a powerful preventative measure to govern those in positions of responsibility—CEOs, heads of state and heads of financial institutions—and make them all responsible for the decisions that lead to, support or finance mass damage and destruction." That's an excellent idea. But it may never happen. For now, as governments fail to stop biodiversity loss, sustainable biodiversity investment vehicles are an excellent way to save species while making a profit. We need more of them. And less of us.



Earth Summit 2002. The Rio Conventions: Committing to Sustainability United Nations Environment Programme, Division of Environmental Conventions. January 31, 2002. Accessed April 12, 2012.
Convention on Biological Diversity. Global Biodiversity Outlook 3. United Nations. May 10, 2010. Accessed April 12, 2012.
Inter-American Development Bank. MIF launches Second Stage of Eco-Friendly Venture Capital Fund. March 29, 2012. Accessed April 12, 2012.
Higgins, Polly. What Will Your Legacy Be?. Resurgence.org. January 6, 2012. Accessed April 12, 2012.

image: The Panamanian golden frog (Atelopus zeteki) is a critically endangered toad which is endemic to Panama. (credit: David Pape, Wikimedia Commons)