Nature's New Economy
Rajesh Savji Parmar
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Fintech for Biodiversity.
The Laetoli footprint site in Tanzania, the oldest unequivocal evidence of human ancestors walking on two feet, is currently at risk of being lost forever due to erosion caused by increasing storms and rainfall.?
Recently a new Cultural Protection Fund led by 英国文化协会 with the Department for Culture, Media and Sport was launched to address global heritage sites at threat from the impact of climate change and man made disasters.
Funding of over ￡2 million will go towards protecting cultural heritage in Syria, Iraq, Kenya, Sudan, Ethiopia, Occupied Palestinian Territories, Uganda, Tanzania, Pakistan and Nepal.?
Yet ￡2 million over 22 sites ultimately is a plop in the ocean but a pointer towards the importance of improved mechanisms towards financing global sites of such importance and magnitude.
Keep in mind that cultural heritage, nature are key drivers towards global tourism which are a vital source of income for many developing countries.
Our world is changing dramatically and with that the need to innovate and focus on how to direct alternative finance and develop innovations for climate, conservation also need to adapt and change.
The Funding Chasm
Terrestrial and marine ecosystems play a crucial role in mitigating climate change, serving as natural carbon sinks that absorb and store about 40% of global carbon emissions.
The preservation and rehabilitation of forests, wetlands, grasslands, coastal regions, seagrass meadows, and peatlands are vital for preventing greenhouse gases from entering our atmosphere.
However, effectively addressing climate change through these nature-based solutions requires an estimated cumulative investment of $11 trillion from 2022 to 2050.
Innovative fintech solutions alongside various digital financing platforms and payment solutions, present promising avenues for channeling investments into critical conservation and climate projects. By leveraging these diverse financial technologies, we can drive the necessary investments to support the preservation and restoration efforts essential for our planet's future.
Collaboration between governments, the private sector, and international organisations is critical to mobilise resources, establish innovative financing mechanisms, and incentivise investments.
Currently only 17% of NbS investment comes from private sources. This is according to the, "State of Finance Report" by UN Environment Programme .
These should be increased by private capital, bringing the total investments from the current level of US$154 billion a year to the US$384 billion a year required by 2025.
The report finds both public and private finance flows to NbS will need to increase dramatically to close the gap between current finance flows and the investment needed to meet the Rio Conventions’ targets of limiting global warming to 1.5°C, protecting 30% of land and sea by 2030 (30×30 target), and achieving land degradation neutrality (LDN) by 2030.
Recommendations for actions relate to “greening finance,” “financing green,” and supporting green and inclusive financial systems. The report calls for:
Budding Ecosystem
What does the landscape look like? The recent report by Nature Tech Collective gives a compelling lens of the players and evolving definitions in the Nature fintech space.
These also overlap with those that may also consider themselves as Climate fintech companies.
NTC states on its website, "Our mission is to address the nature-data gap, advance nature-based decision-making, and achieve a nature-positive future."
I would highly recommend downloading the report and visualising the map to get a sense of the players.
Nature fintech or Climate Fintech intrinsically comes down to combining digital innovation with financial technology innovation to connect disparate audiences towards investing towards conservation, restoration and ensuring a sufficient pipeline of future finance exists and grows towards projects that still struggle to attract sufficient capital despite the global attention towards threats to our planet.
Our experience, expertise and understanding especially of the impact of advancements in this sub-sector of fintech for Africa is palpable. Much of the 1.4 billion people (and counting) in the continent rely on agriculture for their sustenance, development, survival.
Africa has 60 percent of the world's uncultivated arable land. The agriculture sector accounts for 35 percent of Africa's GDP and employs more Africans than any other sector.
Access to credit is a major impediment to private sector investment in African agriculture. According to the African Development Bank, the estimated current financing shortfall ranges between US$27 billion and US$65 billion annually.
Impact investors being involved not only encourages new investors to come in, but they have capacity to support developers to bring about design improvements that commercial financial institutions cannot.
This can make the difference between a project being bankable, or not. Hence the importance of need of platforms that connect both capital and players towards key projects.
Indelible itself albeit a startup is focused on attractive stories and clients that can bridge that gap in trust. I launched Indelible knowing that while fintech has blossomed in the UK context, London itself being the powerhouse for innovation and investment in this sector above any other country in the EU understood the complexities and challenges faced around regulatory hurdles.
Indelible: Crowdfunding
Indelible is a crowdfunding fintech platform empowering individuals to invest in and accelerate impactful climate and conservation projects. We bridge the gap between finance and environmental sustainability by providing a platform for nature-based solutions.
Call To Action.
The crowdfunding app focused on driving positive change. It connects passionate individuals with transformative projects in climate and conservation, offering a unique opportunity to invest in a sustainable future. The platform operates at the intersection of fintech, nature, climate, enabling the company to offer innovative financial solutions for nature-based initiatives.?
With high-profile clients like Ol Pejeta Conservancy and the Ghana Tourism Authority, even at a startup stage it is demonstrating the power of crowdfunding to tackle pressing environmental challenges and the inherent problems that many markets, especially in Africa are faced with when it comes to attracting or raising sufficient capital for restoration and conservation projects.
As the crowdfunding sector continues to evolve, Indelible is positioned as a leading force in the monetisation of nature-based solutions.
The Green Digital Finance Alliance report exposes a critical funding gap in nature-based solutions (NBS). Indelible, a rewards-based crowdfunding platform, emerges as a solution to address this very gap.
The Challenge: A Disconnect Between People and Nature
The current state of biodiversity finance suffers from a significant gap. Many individuals lack awareness and access to investment opportunities that directly contribute to nature conservation. Traditional investment channels like charitable donations and pension funds with forestry portfolios limit public engagement in NBS projects. However, the potential of fintech to revolutionise investment engagement through personalisation and gamified interfaces presents a promising solution.
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Indelible: A Novel Approach to Nature Financing
Indelible acts as a platform that democratises access to nature and climate projects. By leveraging rewards-based crowdfunding, it educates and engages the public in environmental causes. Understanding the importance of fostering a knowledgeable investor base is crucial. Indelible hopes to play a key role in cultivating a community of environmentally conscious individuals who are empowered to make a difference.
From Rewards to Investment: A Pathway to Impact
Indelible's rewards-based model serves as a stepping stone for individuals to transition towards more substantial financial commitments in the future. This initial engagement fosters a pipeline of potential investors for future impactful nature and climate projects. Security Token Offerings (STOs) hold promise as a potential next step for scaling impact investments in the biodiversity space.
One of the biggest barriers for this type of innovation currently is thatost biodiversity projects are indeed not big enough to be structured as marketable standalone investment products with many not being scalable beyond USD 5 million.
New data shows that 577 conservation projects have crowdfunded USD 4,790,634 since 20099 across 72 platforms for implementation across 80 countries. The STO market is still young but is advancing rapidly.
Indelible as a Catalyst for Change
The current perception of crowdfunding as solely a tool for unlocking donations needs to be reframed. Indelible emphasises its potential to actively engage citizens as micro-investors or co-owners of biodiversity projects.
As a fintech startup, Indelible is building the infrastructure for alternative investments in nature and climate projects, paving the way for more sustainable investments and opportunities upon successful completion of early campaigns.
To support the growth of innovative fintech solutions like Indelible, broader market restructuring is essential. This restructuring should redefine nature's value and establish mechanisms to reward its protection effectively. Collaboration and support for initiatives that redefine nature's value and reward its protection are crucial moving forward.
Quantified data on the potential market size for rewards-based crowdfunding is scant and nature and climate is quite challenging for several reasons:
Potential Market Size Estimation
Based on the limited available data and expert opinions, we can hypothesise that the potential market size for rewards-based crowdfunding in nature and climate is:
Repurposing Fintech
Global investment in fintech did drop in 2023, plunging to a five-year low of $113.7bn from 4547 deals. This marked a 42 per cent decline from the $196.3bn reported in 2022 and represented the weakest result since 2017, according to KPMG recent Pulse of Fintech report.
Yet whether one take a top down or bottom up approach the sheer volume of existing fintech players including in LMICs (powered by telcos in the case of Africa or Latam), the opportunities to improve community participation and encourage nature and climate stewardship has already started.
Micropayments and incentives for those in rural market is one example. Data collected on the ground by local communities on specific conservation metrics is not new. What is new is fintech’s ability to incentivise such data collection via micropayments as blockchain enabled transfers, something that can be done at little cost even to people without bank accounts.
Micropayments can help provide local populations income while at the same time increasing awareness and shifting biodiversity’s value for those populations from what can be extracted to what can be observed and reported. A few early players in the market are trying to develop exchanges for these tokenised data sets.
More Than Tree Planting.
Tree planting and reforestation of local heritage sites such as the one Indelible is planning at Assin Manso is part of the strategic brand building and awareness. Crowdfunding, the technology merely serves as that gateway and while the commercialisation and compliance elements (safeguarding of investor funds, e-KYC/AML) are not easy feat, the real work begins with hands in the dirt once campaigns complete and funding reaches the last mile.
The 2024 Emancipation Day celebration has been climaxed at Assin Manso with a clarion call for unity and stronger collaborations among Africans, home and abroad, to expedite the Continent’s development.??
The sacred celebration was climaxed with a colourful durbar of the chiefs and people of Assin and Africans from the Diaspora among others to witness the rich African culture.??
Emancipation Day celebrates the abolition of chattel slavery and honours the memory of enslaved Africans. This year marks the 190th year since the abolition.??
The 2024 Emancipation Day celebration was on the theme: “Unity and Resilience: Building stronger communities for a brighter future”.
Indeed the CEO for Ghana Tourism Authority and partner at Indelible shone a light on the importance of the above at Assin Manso.
The key to development remains in raising the bar and improving the access to capital for nature based solutions to protect at risk conservation areas, improve at risk heritage sites and combat their erosion due to climate change.
Aid alone and charitable organisations cannot deal with those issues. Only in the past days we have seen the news of the demise of Crown Agents , one of the United Kingdom’s most established development contractors has collapsed. Significant cuts by the UK Government to overseas aid playing a large part.
In Nigeria, Crown Agents boasts of over 200 off-grid solar systems installed for schools and healthcare centres in Lagos and Kaduna states, aiding treatment for neglected tropical diseases to over 14 million people. The relations goes back over 100 years and the name synonymous for development finance and infrastructure in the continent.
Innovate or Die?
Natures and Climate Fintech solutions present a triple bottom line opportunity for businesses and investors a like. Innovation in this space is rapidly evolving and as a founder of Indelible, having spent many years in commercial cross border payments focusing on immediate consumption (aka Remittances) and having led development of products and services (VAS), i believe that the power of commercially savvy founders to navigate regulation, build solutions and commercialise is going to be a vital cog in connecting this space.
The world and our understanding of what sustainability looks like is changing. Whether its due to the influence of mass protests led by antagonists such as Just Stop Oil . constant social media soundbites of the world on fire or the world under water, i for one believe that the impact fintech can have is significant.
Crowdfunding is merely a gateway to connecting socially minded humans with a window into new markets. Everyone has a touch point - whether you care for wildlife, humanity, UNESCO protects forts, religious sites or bipedal footprints in ash...it matters not.
What really matters is that without solid interventions many of the above may simply vanish and ultimately it will be our fault for letting that happen.
Let's move the dial. Now.
Inquiries About Indelible?
Contact our Founder Rajesh Savji Parmar at [email protected]
That's excellent! Rajesh Savji Parmar