Woman dehusking and separating various grains such as millet, maize and sorghum.

On a crowded planet, the limiting economic factor for prosperity is not financial capital; it is natural capital.

Carolina Lalane is a Mozambican entrepreneur, mother of seven and community dynamo. She spearheaded the drive to get piped-water and electricity into her locality where most people rely on cassava farming and fishing in the Bay of Inhambane to feed their families.

In her colourful capulanas, Carolina uses water and electricity to serve up matapa to tourists, a dish of the earthy-green cassava leaf, peanut, coconut and fish caught from salty dugout canoes. But getting the ingredients for matapa is becoming tougher. Population growth — coupled with migration from the interior to the coast in search of jobs and services like electricity — is increasing pressure on natural assets. Over the past three years, drought has become a serious additional stressor in southern Africa, costing 50,000 permanent farm jobs in South Africa’s Western Cape. In Carolina’s community, harvests of cassava are yielding fingerlings instead of fat root-tubers. Her neighbours have been forced to fish more and expand cassava cultivation, hitting soil health and fishery stocks.

On a crowded planet, the limiting economic factor for prosperity is not financial capital; it is natural capital. The Global Risk Report 2018 highlighted climate and environment among the top five global risks. Pressure is increasing on the very natural assets, like the fisheries in the Bay of Inhambane, that Carolina needs for her business.

Conventional investment analysis and financing tends to omit natural capital in a fragmented project-by-project approach. Adding a natural capital systems lens reveals the underlying network of ecological infrastructure — such as rivers, soils, forests, reefs — that affect the long-term risk-return profile of multiple investments. Ecological infrastructure could become an emerging investment frontier powering inclusive development in the 21st century.

The Government of Mozambique is setting up a national Natural Capital Programme, one of the first in Africa, in a pioneering effort to put Resilient Ecological Infrastructure Networks on the map as legally protected assets for food, water, energy and climate security. The African Development Bank and WWF have partnered with the government in this ambitious mission along with collaborators from the Council for Scientific and Industrial Research; the Natural Capital Project; Columbia University; Third Way Africa (impact investors); Seedstars (a global start-up platform); and Standard Bank. Globally, the Green Growth Knowledge Platform’s multi-agency Working Group on Natural Capital is catalysing the sharing of experience gained by pioneers like Mozambique, Myanmar, China, and the Arctic; a clear lesson from these initiatives is the need for multiple institutional champions and more than one government cycle to put policy in place. Leaders from private and public sector will be presenting the latest learning and developments in natural capital investment and planning approaches at the Natural Capital Symposium, taking place March 19th-22nd, 2018 at Stanford University, USA.

Three actions to scale-up investments in ecological infrastructure:

  1. Create financial incentives: position ecological infrastructure as investment-ready assets and reward companies, farmers and communities for their management. Investments in forests by Water Funds, with Africa’s first launched during 2017 in Nairobi, is a promising model for water systems. Building the enabling environment — including policy and subsidy reforms — and adapting this model to fishery nurseries and soils could enable entrepreneurs like Carolina to grow their businesses.  
  2. Establish trust funds: tax extractive industries to finance ecological infrastructure trust funds that pay community stewards for restoration and management. The proposal by Norway’s US $1 trillion wealth fund to drop oil and gas stocks, the European Investment Bank’s Natural Capital Financing Facility and GEF-7’s entry point on Natural Capital provide opportunities to explore this further.
  3. Set targets to harness private finance: promote blended finance vehicles and women/youth entrepreneurs to accelerate the flow of funds to ecological infrastructure vital to delivering the Sustainable Development Goals (SDGs) for 2030 and beyond. The Coalition for Private Investment in Conservation is putting an edge on the financial potential and mechanisms to scale-up investments in ecological infrastructure.

If Uber and Airbnb can connect millions of travellers and service providers, what could similar business models do to connect ecological infrastructure stewards with global consumers? Collaborating with tech entrepreneurs and private investors to enhance natural capital could create long-term value for all. Carolina and the world’s kitchens are waiting.