Why biodiversity urgently needs more financing options
That’s the state of the financial market for biodiversity, according to John Tobin-de la Puente, a 15-year Credit Suisse veteran and early player in the market who’s now a professor at Cornell University in Ithaca, New York.
The question is how do you get profit-loving capitalists to plow money into a niche market that focuses on the well-being of insects, the health of marine species and the preservation of mangroves?
Currently, financial strategies targeting biodiversity are about 10 to 15 years behind those focused on cutting greenhouse-gas emissions, Tobin-de la Puente said.
To boost the market—which includes bonds tied to protecting oceans and debt-for-nature swaps—there needs to be more complex financial contracts and a greater commitment from long-term investors and governments to lure more private money to the sector, Tobin-de la Puente said.
“It’s a great situation to be in if you’re a banker developing products,” he said in an interview.
Versions of such instruments that were pioneered by Credit Suisse are now being explored by many of the world’s biggest banks, including Goldman Sachs Group Inc. and Citigroup Inc. UBS Group AG, which now owns Credit Suisse, is already working on its first-ever debt-for-climate swap.
Then there are credits designed to offset the damage a company might do to its natural environment. These exist in many forms, including so-called mitigation banking credits. Meanwhile, JPMorgan Chase & Co. is among banks creating new roles to figure out how best to monetize
