Natixis News

New investment strategy hailed as an innovative climate solution at One Planet Summit

The ‘Land Degradation Neutrality’ initiative promoted by the United Nations Convention to Combat Desertification (UNCCD) and Mirova (Natixis) to support sustainable land use practices globally was highlighted as a concrete and innovative climate action during the One Planet Summit on 12 December 2017. Initial investors, including the European Investment Bank and the Agence Française de Développement, have announced financial commitments totalling more than USD 100 million out of a target of USD 300 million.

At the One Planet Summit, organized to celebrate the second anniversary of the Paris Agreement, the ‘Land Degradation Neutrality’ initiative was hailed by by Jean-Yves Le Drian, French Minister for Europe and Foreign Affairs, as an innovative solution that aligns sustainable land management with the ambition of the Paris Agreement. Developed by the UNCCD and Mirova, an affiliate of Natixis Investment Managers who will also provide initial seeding for the strategy implementation, it is one of the responses to the call for public and private finance in support of global climate action.

Restoring degraded land is a huge, yet greatly underestimated and underutilized opportunity to reduce greenhouse gas emissions and to adapt to climate change. By putting sustainable land use at the heart of its climate action, the ‘Land Degradation Neutrality’ initiative addresses the three summit objectives:

  1. Act concretely and collectively: This joint effort to put finance at the service of climate action is the outcome of a unique coalition of actors. The strategy aims at investing in sustainable land management practices all over the world that have already been shown to be effective, but need suitable financing and technical assistance.
  2. Innovate: This is the first investment strategy to focus on the achievement of a Sustainable Development Goal (SDG) target, and using an innovative public private partnership approach. Success could motivate the development of new investment sources for the goals.
  3. Support one another: Climate change is a global issue, but the effects are distributed unevenly, with especially negative impacts on land users. Acting on a global scale, ‘Land Degradation Neutrality’ initiative will therefore provide flexible financing solutions where traditional bank funding is not available.

As early supporter of the initiative, the European Investment Bank was joined by the Agence Française de Développement to become the anchor investors. Other institutional investors include Fondaction, the first north-American private investor, foundation Fondation de France, insurance companies BNP Paribas Cardif and Garance. It is also backed by de-risking partners including the Government of Luxembourg, IDB Invest and the Global Environment Facility. In total, investors have announced commitments of over USD 100 million out of a target of USD 300 million for the strategy.

‘The public sector must be bold and inventive to unleash a revolution in development and entrepreneurship that can tackle the manifold and complex challenges before us – climate change, loss of productive land, lack of jobs, forced migration, droughts, floods, the list seems endless. The moment we see the land differently our horizons open wide. Then, the options and possibilities are endless’, says Monique Barbut, Executive Secretary of the UNCCD.

‘Implementing such private public schemes is both a challenge, through the pioneering dimension of the approach and the challenge of coordination, but also a great opportunity, through the exchange of knowledge and know-how. Mirova, as a management company dedicated to responsible investment, is committed to supporting initiatives to redirect financial flows towards sustainable development,’ comments Philippe Zaouati, CEO of Mirova.

Jean Raby, CEO of Natixis Investment Managers added: ‘We believe it’s our responsibility, as financial institution, to play a role in the transition to a low-carbon and climate resilient economy. This initiative is in line with Natixis’ commitments to provide concrete and creative climate solutions.’

European Investment Bank Vice President Jonathan Taylor said: ‘Land degradation has negative impacts on water, food and energy security, climate change and biodiversity. That’s why, as the EU Bank, we are proud to support the Land Degradation Neutrality initiative – a first of its kind public private partnership, attracting investments for sustainable land management and land restoration projects. This is important for two reasons: one, because we need pilots like this investment strategy to demonstrate that investing in land degradation neutrality is good business for the private sector; and two because it is key to deliver on the Sustainable Development Goals and Paris Climate targets. We are committed to making the Paris Agreement a reality. Outside the EU, we have pledged 35% of total financing for climate action by 2020. This includes an increased focus on impact, adaptation and mainstreaming climate change considerations into everything we do.’

For Rémy Rioux, CEO of the Agence Française de Développement: ‘AFD is excited to join forces with other investors for financing climate resilient projects through Land Degradation Neutrality initiative and to participate to the emergence of a new asset class. This initiative complements AFD’s intervention in supporting transition through sustainable management of natural capital resources as common goods, and improving socio-economic conditions for family farmers. The investment policy of Land Degradation Neutrality strategy is in line with our commitment to foster the Paris Agreement implementation’.

Pascal Canfin, Managing Director of WWF France says: ‘Every year, no less than 12 million hectares of arable land are degraded – the equivalent of one football field every two seconds – having major consequences on climate and food security. This Land Degradation Neutrality initiative, the biggest public private partnership for sustainable land and followed by WWF France since its creation, is a great opportunity to channel investments towards innovative projects for land restauration. It therefore participates in the fight against climate change and global insecurity, and aims at ensuring food security especially for the most vulnerable populations.’

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Note
The investment strategy of the ‘Land Degradation Neutrality’ initiative is reserved for professional investors and is mainly subject to risk of capital loss.

About UNCCD
The United Nations Convention to Combat Desertification (UNCCD) is the only legally binding international agreement on land issues. The Convention promotes good land stewardship. Its 195 Parties aim, through partnerships, to implement the Convention and achieve the Sustainable Development Goals. The end goal is to protect our land, from over-use and drought, so it can continue to provide us all with food, water and energy. By sustainably managing land and striving to achieve land degradation neutrality, now and in the future, we will reduce the impact of climate change, avoid conflict over natural resources and help communities to thrive.

Visit: www.unccd.int

About Mirova
Mirova is an affiliate of Natixis Investment Managers dedicated to responsible investment. Through a conviction-driven investment approach, Mirova’s goal is to combine value creation over the long term with sustainable development. Mirova’s talents have been pioneers in many areas of sustainable finance. Their ambition is to keep innovating to propose the best tailored and most impactful solutions to their clients.

Mirova
A subsidiary of Natixis Asset Management
Limited liability company
Share Capital: €7 641 327.50
Regulated by the Autorité des Marchés Financiers (AMF) under n° GP 02014.
RCS Paris n° 394 648 216
21 quai d’Austerlitz 75013 Paris France
www.mirova.com

Natixis Asset Management
A subsidiary of Natixis Investment Managers
Limited liability company
Share capital €50,434,604.76
Regulated by the Autorité des Marchés Financiers (AMF) under no. GP 90-009
RCS Paris n°329 450 738
21 quai d’Austerlitz 75634 Paris Cedex 13
www.nam.natixis.com

Natixis Investment Managers S.A.
RCS Paris 453 952 681
Share Capital: €178 251 690
21 quai d’Austerlitz, 75013 Paris
www.im.natixis.com

This communication is for information only and is intended for investment service providers or other Professional Clients. The analyses and opinions referenced herein represent the subjective views of the author as referenced unless stated otherwise and are subject to change. There can be no assurance that developments will transpire as may be forecasted in this material.

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