- Bringing together donors, nations, UN agencies, foundations, NGOs, and private investors, ‘blended finance’ can align private investment with public monies to fund conservation.
- A new commentary by the founding chairman of the world’s largest such mechanism focused on ocean conservation — the Global Fund for Coral Reefs — argues that it can serve as a model for others working to reverse biodiversity loss.
- This post is a commentary. The views expressed are those of the author, not necessarily of Mongabay.
As the founding Chair of the Executive Board of the Global Fund for Coral Reefs (GFCR), I have witnessed firsthand a groundbreaking effort to preserve one of Earth’s most essential ecosystems. Established in 2020, the GFCR hosts the first UN trust fund dedicated to Sustainable Development Goal 14 (SDG 14), “Life Below Water.” As the world’s largest blended finance mechanism focused on ocean conservation, it can serve as a model for others working to reverse biodiversity loss.
Coral reef health impacts the livelihoods and food security of an estimated one billion people, yet coral reefs are at extreme risk due to global climate change and local stressors including coastal development, overfishing, and plastic and nutrient pollution. Over half of the world’s coral reefs have already been lost, but it is not too late to act.
Despite its immense importance, funding to improve ocean heath – and for coral reef conservation, in particular – has been scarce. Recent reports suggest that $175 billion per year is needed to achieve SDG 14 by 2030; however, according to the World Economic Forum, less than $10 billion was invested between 2015 and 2019.
This is where a blended finance mechanism like the GFCR can have the greatest impact. Bringing together donors, nations, UN agencies, foundations, NGOs, and private investors, blended finance funds align private investment with public good to conserve coral reefs, deliver returns on investment, and create economic opportunities in local communities.
Designed to address the coral reef funding gap, GFCR has mobilized more than $190 million for coral reef conservation and restoration in two years. Even more encouraging, at the Convention on Biological Diversity COP15 in December 2022, thirteen countries and the European Union pledged to leverage international public finance to mobilize an additional $2 to $3 billion in private finance through the GFCR by 2030.
Over the past two years, I have gained key insights about how to leverage private investment to halt and reverse biodiversity loss that can help others working in this field.
Private investment and the biodiversity funding gap
Addressing today’s conservation challenges requires far more funding than governments and philanthropy can provide. Closing this funding gap calls for looking beyond traditional development funding streams, toward innovative models that attract private dollars. One solution is blended finance, which uses capital from public and philanthropic sources to increase private sector investment in sustainable development.
In recent years, governments have recognized the important role blended finance can play in sustainable development. We see this through international agreements like the Addis Ababa Action Agenda (July 2015) and the Convention on Biological Diversity Global Biodiversity Framework (December 2022). The GFCR is a promising example of how blended finance can mobilize resources to deliver nature-positive solutions through multi-sectoral partnerships.
An early GFCR project in Fiji shows how this collaboration works in practice. A 16-hectare open dumpsite was leaching waste into the water, degrading the nearby Great Sea Reef ecosystem. A combination of grants, debt, and equity investments are now enabling a local private company to establish a sanitary landfill and recycling facility to address the leaching threats. The project will generate revenue for the company, support local jobs, and improve the resilience of coral reefs.
Blended finance demonstrates how powerful our efforts can be when we align interests across sectors.
This model understands that government, philanthropy, and the private sector can deliver both positive environmental outcomes and returns on investment when working in collaboration. Despite sometimes differing perspectives, interests, organizational cultures, and areas of expertise, GFCR’s partners are rallying support for coral reefs, one of the most biodiverse, valuable, and threatened ecosystems on the planet.
We all have a stake in halting and reversing biodiversity loss; this approach fosters the necessary collaboration between sectors by incentivizing market-based conservation solutions.
Measure progress, share what’s learned
As a demonstration fund, the GFCR is designed to prove which innovative finance approaches are most effective and then scale those approaches quickly. GFCR is investing in monitoring and evaluation (M&E) to promote effective program management, transparency, and accountability, and to establish an evidence base to learn what’s working and what’s not.
Prioritizing M&E, continuous learning, and knowledge sharing with the broader community to inform future blended finance efforts is essential. An example of this is the REEF+ Accelerator, an online platform that hosts hundreds of solutions and knowledge posts that are being shared broadly across the coral reef community. This commitment to sharing what we learn spreads blended finance’s impact far beyond its own investments.
While blended finance models like the GFCR are still in their early stages, we are already seeing the power of this approach to mobilize action to preserve coral reefs. Blended finance offers one of the most promising models for reducing Sustainable Development Goal funding gaps. It increases the impact of finite development and philanthropic resources by using those funds to leverage the trillions of dollars of private capital available in global markets.
As I step away from my role as Chair of the GFCR to serve on the Executive Board, I am more optimistic than ever that the global community can dramatically change the trajectory of the coral reef crisis.
Chuck Cooper is founding Chair of the Executive Board of the Global Fund for Coral Reefs, and this commentary was written by him on behalf of the Paul G. Allen Family Foundation.
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