Interview Summary:
Candice Stevens, Founder and CEO of the Sustainable Finance Coalition (SFC), explains how the organisation develops tailored finance solutions to unlock sustainable funding for nature across Africa. Using its “find, design, mobilise” model, SFC collaborates with governments, financial institutions and conservation partners to scale innovations such as impact funds and biodiversity credits.
Active in 15 countries, it promotes high-integrity credits through initiatives like the African Buyers Club. Stevens highlights challenges including terminology gaps, sector coordination, risk appetite and balancing impact with returns. She sees Africa’s vast natural wealth as a catalyst for green growth and sustainable economic transformation.
My name is Candice Stevens. I have the privilege of leading the Sustainable Finance Coalition as its CEO and founder. What we do is to unpack tailor-made finance solutions for nature, and we do this in a cross-collaborative way across the African continent. It’s really an exciting space to think about the role of nature finance. Africa has an incredible amount of biodiversity some amazing landscapes and seascapes, but they do require sustainable flows of finance to fully flourish. And that is exactly the role of the Sustainable Finance Coalition. We partner with nature’s custodians, we partner with financial institutions to be able to determine what are the most viable finance solutions at our disposal that we can create, innovate, design and develop and ensure that they reach the people and places that need it the most.
It’s an emerging sector and a space that allows us to really push the boundaries of our understanding when we think about nature finance and its role. Our goals at the Sustainable Finance Coalition are to increase the amount of sustainable finance available for Africa’s people and places, and really to be able to put the sustainable use of our resources front and centre. We have many, many countries across the African continent with an amazing array of natural wealth. But how do we make sure that they’re utilising it in the most appropriate way; that we’re thinking about growing emerging economies? And this is exactly why Africa’s Green Economy Summit is such an important discussion point and why nature finance plays such an important role. The coalition is there to be able to showcase exactly what is possible when we innovate for solutions around nature finance.
We have an incredible array of different finance solutions that we’re currently working on; everything from impact funds to outcomes funds, tax incentives to biodiversity credits and much more. These are all captured within the Sustainable Finance Coalition’s inventory of finance solutions. It’s an open source platform for anybody to use to see exactly what’s out there from a nature finance innovation point of view. But all of these finance solutions come from one primary source, and that’s the finance model that the coalition uses. We have a three-part finance model that we work together with different stakeholders across the African continent to use to develop these tailor-made solutions. Our finance model, very simply, is find, design, and mobilise. How do we find the most viable finance solutions for a specific conservation need, a green economy boost, or a specific intervention that needs to happen in a certain sector. How do we then design those viable finance solutions in a way that is practical, that we can implement them, build out those funds, instruments and mechanisms? And importantly, how do we mobilise the social and financial capital to take these new innovations to scale?
Our finance model is being applied across 15 African countries and the southwest Indian oceans with an enormous array of partners. We see 17 different types of finance solutions at a typology level replicated 65 times across this enormous footprint. It’s an incredibly exciting space to be in to see the finance model working in so many different places with so many different types of people starting to unlock those new and exciting sustainable flows of finance for nature. Some of those finance solutions are going to be on display at the Africa’s Green Economy Summit and importantly some key discussions around impact funds for the blue economy, discussions around the African Buyers Club for biodiversity credits, and so I invite participants to really dive into the inventory and see what are the new innovations coming off our continent?
The continent really offers us a space of innovation, a space to pioneer, to push the boundaries of our understanding around nature finance. And biodiversity credits is just one of those examples. There are going to be some critical discussions taking place at the summit. But importantly, these discussions are happening in many parts of the world and in many different forums in Africa.
Biodiversity credits offer us the ability to start to value nature for nature’s sake, to look at the intrinsic value of nature and our activities around it to safeguard it, to enhance it, to maximise its benefits for people and for economies, and then be able to ensure that we can encapsulate that in a unit that is measurable, that is verifiable, and actually has an amount allocated to it.
It’s an exciting space, an important discussion. There are risks, but there are also an incredible amount of opportunities in this space. I really do believe that the African continent is a space to be able to pioneer biodiversity credits. And importantly, as developers start to build out biodiversity credit methodologies and projects in different parts of Africa, different countries, different landscapes and seascapes,
The role of the Sustainable Finance Coalition is to come alongside them and be able to address the demand side, to work with buyers, to look at high integrity credits and say these are best in class. These are biodiversity credits that have been thoughtfully, carefully designed, that they really match conservation outcomes and community livelihoods on the ground and are best in class for purchase.
And that is exactly where the African Buyers Club is positioned to be able to address that demand side. And so I’m optimistic in seeing how Africa is able to take some of the first steps towards what an emerging biodiversity credit market would look like.
This system is constantly evolving, it’s constantly changing. There are many opportunities and there are also many challenges. So to unpack that in a little bit of detail, I think the first major challenge that we’re facing is that nature finance is still relatively new. But excitingly, there’s a huge groundswell of support. There’s a groundswell of interest. There’s a groundswell of innovation. and that’s starting to build like a tsunami. Importantly, the growth in nature finance, the growth in being able to target sustainable finance solutions towards nature ties in with green economy discussions for a vast majority of countries. And with that groundswell of opportunity, the challenges we face can really be broken down into five bite-sized chunks.
Firstly, when things are new, when things are nascent, we often have terminology challenges. The different types of terms that we use between the conservation sector and the finance sector means that we can get lost in translation. One of the roles that the Sustainable Finance Coalition has is to be able to act as that bridge between nature and finance, particularly on the terminology challenges. How we begin to describe new nature finance solutions to each other is a challenge and one that we’re very deliberately addressing so that we’re able to cross pollinate language, and we’re able to cross pollinate the value that nature brings to finance and that finance brings to nature.
Secondly, another challenge that we’re facing is a lot of disjuncture between different sectors. Again, this is starting to change. We use the word “coalition” very purposefully in our name because we bring together such a multitude of sectors across governments, numerous different private sector partners, multiple financial institutions and financial players, and of course, a wide array of conservation NGOs and community-led organisations. The meetup between all of these different sectors and all of these different expertise is critically important if we’re going to be able to take some of these new innovative nature finance solutions to scale. And so cross-pollinating, not just in language, but also in sectoral expertise is a challenge that we need to very deliberately address to partner and collaborate with one another so that we’re able to innovate as quickly and effectively as possible.
A third challenge that I want to highlight is the fact that we have to be able to meet different types of risk appetite. When we’re looking at a very new and innovative nature finance solution, we need to be able to address the more typical sources of capital and understand what their risk profile is. There is obviously a different risk appetite in different types of capital stacks, different types of institutions and how they’re framed and how they operate. And so having those discussions around risk appetite is one of the challenges that we need to be able to address right up front. It’s simply not possible to take some of these finance solutions to scale without fully understanding risk appetite.
This brings me to the next challenge. And that’s really around return and understanding what returns we’re really talking about. Nature brings with it the opportunity to have enormous impact returns, and we need to be able to couple that with financial returns. The balance in impact returns and financial returns is a challenge that we are still grappling with, but one that we’re able to build into our finance model and address collaboratively to really begin to understand how to find that balance. There’s no point in increasing the amount of finance available for nature without concretely adding that into actual impact on the ground for specific species and for specific people. So merging impact and return together is a challenge that we continually grapple with and one that we’re starting to see addressed in each new individual solution that comes online.
And lastly, I think one of the major challenges that we’re facing, not just for nature finance, but more particularly for biodiversity credits, is to be able to see first movers. Those organisations and individuals within those organisations who are willing to take that very first step, who are willing to step out of the boat, to try something new, and to be able to engage with partners to fully understand a new financial innovation.
We’re hoping that the African Buyers Club is going to provide a very unique, a very tailor-made space to be able to have that type of matchmaking, to be able to allow first movers in the nature finance space to really find the transaction that fits their appetite best so that we’re going to start to see exciting new transactions.
I think I’ve mentioned it a couple of times in this discussion around the role that Africa really has to play and how we can take advantage of some of these new nature finance solutions, how we can take advantage of the opportunities that emerging economies and emerging markets can play.
I think what we really need to understand about the African continent is that we’re sitting on some of the world’s greatest natural wealth. So much biodiversity is being lost all around the world. So many places are facing enormous climate risks. And one thing that Africa has at its disposal from its oceans to its mountains to its savannas to its cities is a vast array of biodiversity. Often this is not looked at as the asset that it truly is for us.
In understanding and really appreciating the full natural wealth that our continent holds means that we can start to tap into an asset source that can boost new economies. With so many countries facing fiscal contraction, many countries facing economic slowdown, we want to be able to boost our continent’s ability to create jobs, to be able to increase opportunities for small and medium enterprises and ultimately to be able to grow sectors of the economy that are going to give us a long-term future. The green economy is vitally important for that. And so being able to understand and couple Africa’s natural wealth with those new opportunities in the green economy is something that I believe we need to latch onto because it’s the future that the African continent holds within its hands.
At the upcoming AGES Summit, which we’re all looking forward to, we’re going to be having a dedicated session on biodiversity credits. We’ll be discussing a lot more about the African Buyers Club that I’ve referenced already. And importantly, we’re going to have experts who are deeply involved in the development of biodiversity credits. They’re going to be bringing unique perspectives around what does it actually take to develop a biodiversity credit? And for some, to actually ask critical questions. What is a biodiversity credit? How is it different from carbon credits? How are we avoiding some of the pitfalls that we saw in the carbon market, particularly in the early days? How are we going to price biodiversity credits? How are we going to address the demand side of biodiversity credits? All of these types of questions and more are going to be unpacked in our session.
And really what we’d love to be able to showcase is the fact that nature finance is highly innovative. Biodiversity credits are one of those innovations. There are risks, there are opportunities, and we’re now poised to start to see some of the first biodiversity credit transactions take place. So I’m looking forward to having that discussion with those who will be joining us and be able to put biodiversity credits on the map.
I think it goes without saying that the green economy, regardless of which country you’re looking at, has that critical role to play in being able to advance economic opportunities and economic growth in a sustainable way. I’ve already emphasised the importance of Africa’s natural wealth, and the green economy has the ability to harness that natural wealth, and importantly, to do so in a sustainable way.
Having a summit like AGES means that like-minded people from a variety of backgrounds, a variety of skill sets, experience and expertise can come together and start to bring their different sectoral perspectives into one space. What I’m hoping to see is an incredible amount of dialogue and interaction around what these new emerging opportunities are and to see the meet and match between different types of organisations so that we can take some of the very concrete and specific opportunities and finance solutions forward at the summit.
Lastly, I’d like to just sum up a little bit around the importance of nature finance for the African continent. We stand poised to be able to create new and emerging economies, which has resounding development impact and development in a sustainable way for a multitude of economies across our African continent. The role of nature finance in doing that is so critically important. We need to be able to move beyond a space where nature has been a nice to have, where nature is something that we think about adjacent to the normal everyday considerations, regardless of what sector we find ourselves in.
The important next steps we need to take in building out green economies, in increasing sustainable development opportunities, is to actually lock onto individual finance solutions that have nature and people at their heart. And by doing that, we can start to see an increase of sustainable finance flow into businesses and initiatives that cross the divide between nature finance. The role of the Sustainable Finance Coalition is to really support holding that space, to act as a bridge between nature finance and to truly show what’s possible when we collaborate and push the boundaries of innovation.
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