Financing Strategies for Integrated Landscape Investment – Synthesis Report

Overview

Complex challenges require integrated solutions.

Land managers from small-scale farmers to large agribusinesses increasingly face inter-related challenges that are best addressed through integrated land management (ILM). This paper discusses needs, reviews barriers, and provides recommendations for the financing of ILM. Findings are based on a review of roughly 250 financial institutions and mechanisms that support multi-objective investments within a landscape context, as well as 29 integrated landscape institutions (ILIs).

Integrated landscapes need a blend of asset investment and enabling investment to succeed.

Asset investments like farm conservation, socially responsible enterprise, and large-scale green infrastructure create tangible value that is returned back to the investor or land manager, ideally with a profit. Enabling investments in areas like stakeholder cooperation and regulatory frameworks lay the institutional and policy foundation for asset investments by generating incentives to invest in a particular activity, usually with no immediate expectation of financial rewards.

The public and private sector are partnering to give ILIs the financial support they need.

ILM finance is provided by the full range of public and private financial actors, from a private investor’s motivation for purely financial returns to a government’s or NGO’s objective to provide public goods. In between these two ends of the spectrum are actors with multiple priorities, including social and environmental impact investors and Development finance institutions (DFIs). ILIs are usually financed by a diverse and constantly shifting partnership of actors from across this spectrum.

But even increasing investor interest can’t make up for substantial barriers to ILM financing

Major constraints to mobilizing finance for ILM asset investments include short time horizons required for returns by most investors, a mismatch between investment stake and size of investment opportunities, and high investment risk versus return potential. Challenges for ILM enabling investments include the silos of public sector institutions, the underfunding of landscape initiative establishment and coordination, and the difficulty of appropriately targeting enabling investments to promote asset investments.

We can overcome these barriers.

By strengthening enabling investments and developing financial mechanisms that attract private sector asset investors.