XILVA WEBINAR : Unlocking Insights from Forest & Nature based Project Due Diligence

00:52:25
https://www.youtube.com/watch?v=XTv4LnkGjcY

Ringkasan

TLDRThe webinar focuses on key findings from a study surrounding nature-based projects. Moderated by Tim, CEO of Kila, the session includes insights from Jamie, of Sila, and Paul, from the Landscape Finance Lab. They discuss risks associated with project quality, highlighting frequent issues like lack of critical documentation, insufficient community engagement, and financial planning deficiencies. The speakers emphasize that strong management, thorough documentation, and clear communication with stakeholders are essential for securing investor confidence and ensuring project success. The discussion also covers the importance of professional due diligence and how this can enhance project credibility in the eyes of funders. Additionally, several FAQs are addressed, enlightening viewpoints on community involvement, financial modeling, and the timing of receiving carbon credits in afforestation projects.

Takeaways

  • 🎤 Introduction by Tim, CEO of Kila
  • 📊 Study insights shared by Jamie and Paul
  • 📄 Importance of thorough documentation emphasized
  • 🤝 Community engagement is critical for project success
  • 💰 Financial planning must be realistic and thorough
  • 📝 Frequent risk categories identified: docs, engagement, planning
  • 🌱 Growth potential is important for scaling projects
  • 🔍 Investors must conduct comprehensive due diligence
  • 🌍 Philanthropy can supplement but not drive carbon assets
  • ⏳ Afforestation projects typically take 6 years for credits

Garis waktu

  • 00:00:00 - 00:05:00

    Tim introduces himself as the CEO of Kila and welcomes attendees, followed by Jamie Lawrence, co-founder of Sila, who leads the analytics team. Paul ChatOn from the Landscape Finance Lab also introduces himself, and Ling, who is facing technical issues, is introduced by Tim.

  • 00:05:00 - 00:10:00

    Tim outlines the agenda and the key findings from their recent study, mentioning the importance of Q&A during the webinar. He provides background on Sila's work assessing projects on behalf of investors, examining various dimensions of project quality, such as financial viability, team leadership, and ESG safeguards.

  • 00:10:00 - 00:15:00

    The study analyzes 288 projects, emphasizing geographic focus areas such as Latin America and Africa. Tim notes trends in investor interest, highlighting a strong preference for ARR projects and the dual role of agroforestry in sustainable investing strategies.

  • 00:15:00 - 00:20:00

    Tim discusses risk categories and quality issues identified in projects, including documentation shortcomings, inadequate community engagement, and financial planning gaps, emphasizing the importance of local community participation for project success.

  • 00:20:00 - 00:25:00

    Tim elaborates on critical risks like insufficient project documentation and lack of community engagement, contrasting them with potential mitigating actions that can be taken by project developers to secure investment opportunities and build investor trust.

  • 00:25:00 - 00:30:00

    Paul shares insights from his experience in managing landscape finance projects, noting common issues with project quality and emphasizing the importance of thorough due diligence. He highlights the relationship between project quality and the ability to attract investment in forestry and carbon projects.

  • 00:30:00 - 00:35:00

    Jamie summarizes key learnings from the due diligence findings, stressing the need for transparency and professionalism in data handling by project developers. He emphasizes the importance of understanding social baseline impacts and effectively communicating project challenges.

  • 00:35:00 - 00:40:00

    Jamie identifies best practices for managing risks, encouraging open dialogue between investors and project developers. He warns against projecting investor needs onto projects and highlights that due diligence should uncover improvements rather than merely identify deal breakers.

  • 00:40:00 - 00:45:00

    The discussion covers the evolving roles of rating agencies and investors in the nature-based solutions space. Jamie and Tim clarify Sila's methodology in assessing projects for future carbon credit delivery and risk management.

  • 00:45:00 - 00:52:25

    The Q&A session addresses several queries about project funding, expected returns, and opportunities within the carbon sector, with an emphasis on how philanthropic funding can supplement project development and the importance of structuring projects for sustainable financing.

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Peta Pikiran

Video Tanya Jawab

  • What is the focus of the webinar?

    The webinar discusses the key findings from a study on nature-based projects, emphasizing project quality and risk management.

  • Who are the speakers in the webinar?

    The speakers include Tim (CEO and co-founder of Kila), Jamie (co-founder of Sila), and Paul (from the Landscape Finance Lab).

  • What are some major risk categories identified in the study?

    Key risk categories include lack of documentation, inadequate community engagement, financial planning issues, and reputational risks.

  • What is the importance of community engagement in these projects?

    Community engagement is vital for project success as it fosters local support and helps ensure the project's permanence.

  • How long does it typically take for afforestation projects to receive carbon credits?

    It usually takes about six years to obtain the first carbon credits after starting an afforestation project.

  • How is Sila funded?

    Sila is funded by investors, aiming to avoid conflicts of interest.

  • What do investors look for in due diligence?

    Investors seek comprehensive risk assessments, financial robustness, and sustainable practices in project due diligence.

  • What advice is given to project developers regarding financial planning?

    Project developers should ensure financial planning is realistic, addressing potential risks and sustaining project operations over time.

  • Can philanthropic funds expect carbon assets from projects?

    Typically, philanthropic sources do not expect carbon assets but may consider them as additional revenue.

  • Why is growth potential analyzed in nature-based projects?

    Analyzing growth potential is important to gauge if a project can scale successfully after initial success.

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Teks
en
Gulir Otomatis:
  • 00:00:01
    good I guess we start with a brief
  • 00:00:03
    introduction I'm Tim I'm the CEO and
  • 00:00:06
    co-founder of Kila I will moderate the
  • 00:00:09
    webinar and also uh do a brief summary
  • 00:00:12
    of the study results that we have
  • 00:00:15
    created and that this webinar um is
  • 00:00:18
    based on and I hand over to
  • 00:00:22
    Jamie yeah he everyone thanks for
  • 00:00:25
    joining Jamie Lawrence co-founder of
  • 00:00:27
    Sila and I I lead much of the analytics
  • 00:00:31
    team doing the due diligence um
  • 00:00:35
    assessments and later on I will be uh
  • 00:00:38
    going into some examples and what that
  • 00:00:41
    means for project developers and for
  • 00:00:43
    investors
  • 00:00:45
    alike and over to
  • 00:00:48
    Paul thanks Jamie I'm Paul ChatOn I lead
  • 00:00:52
    the landscape Finance lab based in
  • 00:00:54
    Vienna Austria I'm a long-term fan of
  • 00:00:56
    silver so I'm delighted to be here
  • 00:01:03
    and Ling you want to introduce yourself
  • 00:01:05
    as
  • 00:01:07
    well
  • 00:01:10
    seems
  • 00:01:12
    on
  • 00:01:16
    mute no we don't hear you we have a
  • 00:01:19
    little sound issue so I can introduce
  • 00:01:21
    you Ling you tell me if if I'm doing it
  • 00:01:23
    right uh Ling is heading um Partnerships
  • 00:01:27
    xila uh and runs the webinar from a from
  • 00:01:31
    a technical perspective uh maybe uh as
  • 00:01:34
    we see much more people on uh right now
  • 00:01:37
    um thank you all for joining thanks for
  • 00:01:40
    spending this um busy time spending an
  • 00:01:43
    hour with us in this busy time of the
  • 00:01:45
    year uh we hope to make it worthwhile
  • 00:01:48
    just one little housekeeping remark we
  • 00:01:50
    have the Q&A open that is um uh in the
  • 00:01:53
    zoom control panel uh you can um put
  • 00:01:57
    your questions in there uh and we will
  • 00:02:00
    try to answer them uh at the end um so
  • 00:02:05
    when we go now into the agenda what
  • 00:02:07
    we're trying to um provide you with
  • 00:02:09
    today is the key findings of our study
  • 00:02:13
    um then a brief discussion with Paul um
  • 00:02:16
    a practitioner discussion um on
  • 00:02:19
    investing project sourcing project
  • 00:02:21
    quality and due diligence uh then Jamie
  • 00:02:24
    will talk about risk management how that
  • 00:02:26
    is best done what are lessons learned
  • 00:02:29
    from our work uh and also present um one
  • 00:02:33
    small case study on how this has been
  • 00:02:36
    done um and now uh we can go into the
  • 00:02:41
    results of the study I know first a
  • 00:02:43
    little a little background on Sila I I
  • 00:02:45
    don't want to make this a company
  • 00:02:46
    presentation just so that you understand
  • 00:02:49
    where this um work comes from um so what
  • 00:02:53
    we're doing is we are assessing and due
  • 00:02:55
    dilc in projects on behalf of investors
  • 00:02:58
    concretely we um take in a lot of data a
  • 00:03:02
    lot of different data sources that we
  • 00:03:04
    curate that we cross check and analyze
  • 00:03:08
    uh then we have a methodology that does
  • 00:03:11
    uh screening which is a short
  • 00:03:14
    um first understanding of project
  • 00:03:16
    quality uh and grading which is a more
  • 00:03:19
    detailed uh version of this um and
  • 00:03:23
    basically that then allows investors to
  • 00:03:25
    deploy money into projects uh we look at
  • 00:03:28
    six dimensions of project quality uh
  • 00:03:31
    impact Financial viability leadership
  • 00:03:33
    and team project design ESG safeguards
  • 00:03:36
    and growth potential um and this is then
  • 00:03:40
    the basis for the for the acttion
  • 00:03:42
    analysis we do this um in a sort of
  • 00:03:46
    standardized way which helps a lot of
  • 00:03:48
    course in this um in this study also
  • 00:03:51
    that we can really compare results
  • 00:03:53
    because we apply the same criteria
  • 00:03:54
    anywhere Jamie will go a little bit more
  • 00:03:56
    into detail on what these um
  • 00:04:00
    categories mean and how they actually um
  • 00:04:03
    set up and and make them a little bit
  • 00:04:05
    more come to life uh now for the study
  • 00:04:08
    results first of all a little
  • 00:04:10
    geographical overview and it's important
  • 00:04:13
    here is that this is uh a
  • 00:04:16
    geographical um breakdown of the
  • 00:04:19
    projects we have analyzed so it's our
  • 00:04:21
    work it's a 288 projects that were
  • 00:04:24
    included in the study it's not
  • 00:04:27
    representative of the overall Market but
  • 00:04:29
    it is probably representative of
  • 00:04:32
    investor interest and investor Focus
  • 00:04:34
    we're seeing and and I would say that
  • 00:04:38
    also duve Tales nicely with what we read
  • 00:04:42
    about the market what we see about the
  • 00:04:43
    market is that especially Latin America
  • 00:04:45
    so South America and and Central America
  • 00:04:48
    is where a lot of this Market is where
  • 00:04:50
    the the sort of um High um favorability
  • 00:04:55
    of of conditions of the tropics come
  • 00:04:58
    together with a Rel atively good uh
  • 00:05:01
    legal environment a lot of experience um
  • 00:05:05
    and we see especially in Africa we see
  • 00:05:08
    uh much less uh also Asia we see much
  • 00:05:11
    less um projects that are that are
  • 00:05:14
    coming through uh at least to the
  • 00:05:16
    investors we work
  • 00:05:19
    for um when we look at the projects
  • 00:05:22
    we've analyzed here again this is not a
  • 00:05:25
    comprehensive overview of the market but
  • 00:05:27
    rather um a reflection of investor
  • 00:05:29
    interest uh of the projects we have
  • 00:05:32
    looked at uh we see a very strong focus
  • 00:05:35
    on
  • 00:05:36
    ARR um and if we look at the last year
  • 00:05:41
    uh it is actually even stronger so the
  • 00:05:44
    most uh red activity or the most red
  • 00:05:47
    projects we analyzed were actually
  • 00:05:49
    before this year um that has gone down
  • 00:05:53
    um a lot I would say with General market
  • 00:05:56
    interest um another aspect is Agro
  • 00:05:58
    Forestry both as a um primary uh
  • 00:06:03
    intervention um and also um as an
  • 00:06:07
    additional component actually a very
  • 00:06:09
    useful component uh that we see in other
  • 00:06:12
    projects specifically ARR uh where
  • 00:06:15
    agroforestry is a side activity or um an
  • 00:06:20
    additional uh activity next to um the
  • 00:06:24
    core activity for example of of
  • 00:06:28
    reforestation uh now now if we look at
  • 00:06:30
    risk categories or quality issues we
  • 00:06:34
    found these are the over these are the
  • 00:06:37
    overall uh most frequent uh risk
  • 00:06:40
    categories that we've seen um over the
  • 00:06:43
    last uh 3 years roughly um and uh I'll
  • 00:06:48
    go through briefly um what that actually
  • 00:06:52
    means or to make it a little bit more
  • 00:06:54
    tangible what what we see there as as
  • 00:06:56
    product quality the first one uh
  • 00:07:00
    lack of critical
  • 00:07:01
    documentation that is in many cases um a
  • 00:07:05
    reflection of the project maturity so we
  • 00:07:08
    look at a lot of early stage projects
  • 00:07:11
    where I would say almost by definition
  • 00:07:14
    uh the
  • 00:07:15
    documentation is not uh entirely
  • 00:07:19
    complete uh we sometimes also see that
  • 00:07:22
    that project
  • 00:07:24
    developers how to put this politely are
  • 00:07:26
    not maybe the biggest fans of uh of
  • 00:07:28
    providing documentation which is totally
  • 00:07:31
    natural they got into this to support
  • 00:07:34
    nature work with local communities
  • 00:07:36
    provide provide something positive um
  • 00:07:39
    for the world and maybe not see um
  • 00:07:42
    providing lots of documentation um as as
  • 00:07:46
    uh their core preference on the other
  • 00:07:50
    hand it's um of course important
  • 00:07:53
    especially for the investor side to have
  • 00:07:55
    the
  • 00:07:55
    documentation um together um and and we
  • 00:08:00
    see that that um
  • 00:08:03
    this uh this um sort of issue or or risk
  • 00:08:08
    that we see there is often uh also a
  • 00:08:11
    mitigable risk so it's in rare cases a
  • 00:08:14
    red flag in many cases it's a mitigable
  • 00:08:16
    risk we say okay we are missing this
  • 00:08:19
    part of the documentation that part of
  • 00:08:20
    the documentation and and that is then
  • 00:08:22
    something that the project developer um
  • 00:08:27
    can basically improve um by by adding to
  • 00:08:31
    the documentation but of course if you
  • 00:08:33
    want to have investment that is um a key
  • 00:08:36
    a key point to um to have that in order
  • 00:08:40
    um in order to satisfy um needs of of
  • 00:08:44
    investors uh especially on the legal
  • 00:08:46
    side also uh that is that is a key
  • 00:08:48
    element and a trust generator as
  • 00:08:50
    well um another element is uh and
  • 00:08:54
    probably the the biggest one in terms of
  • 00:08:57
    uh content uh of product projects and
  • 00:09:00
    also a more fundamental problem uh can
  • 00:09:03
    be hard to mitigate mitigate in some
  • 00:09:05
    cases and and even raise a red flag and
  • 00:09:09
    that is the lack of community engagement
  • 00:09:12
    of benefit sharing of giving voice but
  • 00:09:15
    also giving participation in the project
  • 00:09:18
    success to local communities and rights
  • 00:09:21
    holders can be um free PR form consent
  • 00:09:25
    that is required um and can also be um
  • 00:09:29
    again the benefit sharing which would
  • 00:09:32
    then translate into positive engagement
  • 00:09:35
    of communities for the project and we
  • 00:09:38
    see that as a thing that is the right
  • 00:09:40
    thing to do but it's also an absolutely
  • 00:09:44
    critical element very critical factor
  • 00:09:47
    for permanence of the project so if you
  • 00:09:49
    have that you have friends on the ground
  • 00:09:52
    you have people who support the project
  • 00:09:54
    who will support the permanence if you
  • 00:09:56
    miss it if you do it against local
  • 00:09:57
    populations then you have a very large
  • 00:10:02
    permanence risk so this is a really
  • 00:10:04
    important one um to to make sure this uh
  • 00:10:08
    this works incomplete financial planning
  • 00:10:12
    can be a little bit uh like the
  • 00:10:15
    documentation point something that
  • 00:10:17
    investors want to see and want for
  • 00:10:20
    Comfort they want to make sure that the
  • 00:10:22
    the planning is right and that but
  • 00:10:23
    basically concerns both projects with a
  • 00:10:27
    with a profit goal and also nonprofit
  • 00:10:29
    project so they also have to have
  • 00:10:30
    financial planning just to make sure um
  • 00:10:34
    that the um
  • 00:10:37
    basic survival of the project is
  • 00:10:39
    guaranteed even if it doesn't have to
  • 00:10:40
    make a profit it doesn't need a positive
  • 00:10:42
    IR but it needs a zero IR in order to uh
  • 00:10:46
    to be um successful what we see here a
  • 00:10:49
    lot is specifically overly optimistic
  • 00:10:52
    planning on carbon prices and carbon
  • 00:10:55
    amounts so if project if carbon is a a
  • 00:10:59
    relevant product Revenue that is of
  • 00:11:01
    course important um and also a lack of
  • 00:11:06
    uh scenario planning in that area so of
  • 00:11:09
    course carbon is a
  • 00:11:12
    um inherently um sort of unforeseeable
  • 00:11:17
    the current price especially is an
  • 00:11:19
    inherently
  • 00:11:20
    unforeseeable um number but then uh
  • 00:11:23
    scenario planning would be the adequate
  • 00:11:25
    one or the adequate one that investor
  • 00:11:27
    would like to see in order to be a to
  • 00:11:29
    manage uh the
  • 00:11:32
    risks carbon model issues are a more
  • 00:11:36
    specific one um and that basically
  • 00:11:39
    concerns uh everything along the car
  • 00:11:42
    modeling life cycle can be Baseline
  • 00:11:45
    studies um Baseline scenarios also um
  • 00:11:49
    the uh choice of the right methodologies
  • 00:11:53
    um especially now where um methodologies
  • 00:11:57
    are being upgraded and for good reasons
  • 00:12:00
    they're being um upgraded uh it's really
  • 00:12:03
    important to choose the right
  • 00:12:04
    methodologies then model according to
  • 00:12:07
    the
  • 00:12:07
    methodologies um in many cases also
  • 00:12:11
    species or region specific references
  • 00:12:13
    are missing sometimes can be mitigated
  • 00:12:16
    for example by doing a pilot in other
  • 00:12:18
    cases you just have to solve it with
  • 00:12:21
    scenario planning then um so uh this is
  • 00:12:26
    one that is important and it's
  • 00:12:27
    specifically important the more
  • 00:12:29
    uh relevant carbon is for your project
  • 00:12:31
    or the more you rely on carbon as the
  • 00:12:34
    core uh Revenue source for uh your
  • 00:12:38
    project reputational risks again a
  • 00:12:41
    specific one
  • 00:12:44
    um can be driven by specific weaknesses
  • 00:12:48
    um of the
  • 00:12:49
    projects can also be driven by issues
  • 00:12:52
    with previous activities of the project
  • 00:12:55
    proponents or other participants so you
  • 00:12:57
    see okay the project everything looks
  • 00:12:59
    fine but you have a problem um with the
  • 00:13:03
    um with um a couple of key players on
  • 00:13:06
    the on the project up to a point where
  • 00:13:09
    this becomes uh a red flag where you see
  • 00:13:12
    there was a sort of corruption issue to
  • 00:13:15
    to talk about the worst uh possible one
  • 00:13:19
    uh with uh project proponents or
  • 00:13:21
    participants um and uh yeah that can be
  • 00:13:25
    then then a red flag that's also not not
  • 00:13:27
    easily mitigable
  • 00:13:29
    um this is a big issue for investors and
  • 00:13:32
    probably even a bigger issue for
  • 00:13:34
    corporate investors uh who ultimately do
  • 00:13:38
    these projects for a reputation benefit
  • 00:13:39
    and then they want to avoid any
  • 00:13:42
    reputation risk of course insufficient
  • 00:13:45
    team capacity that is something where we
  • 00:13:48
    see the team is has less uh has maybe
  • 00:13:51
    not enough um
  • 00:13:55
    specifically experienced with the
  • 00:13:57
    intervention type or in the geography or
  • 00:14:00
    in the region where the project is
  • 00:14:02
    taking place can sometimes be mitigated
  • 00:14:04
    by just adding team members with that
  • 00:14:07
    experience uh often also a maturity
  • 00:14:09
    issue um but has to be taken very
  • 00:14:12
    seriously that you have the the players
  • 00:14:14
    on board that can actually realize this
  • 00:14:18
    successfully mine project Vision that is
  • 00:14:22
    maybe I mean we we tend to view
  • 00:14:25
    positively or our experience is that
  • 00:14:28
    projects are are are well advised to
  • 00:14:31
    have a couple of Revenue sources for
  • 00:14:34
    example so not purely carbon for a
  • 00:14:36
    variety of Reason um in some cases you
  • 00:14:39
    then have sort of an overshoot almost uh
  • 00:14:43
    where the projects are trying to solve
  • 00:14:45
    too many things at the same time having
  • 00:14:47
    too many intervention types um and then
  • 00:14:51
    worse is then if you the documentation
  • 00:14:53
    is added or edited in some areas and in
  • 00:14:56
    other areas not so you have like five
  • 00:14:58
    project documents doents with uh five
  • 00:15:00
    different protocol set of course um a
  • 00:15:02
    big problem then but it can also be a a
  • 00:15:05
    re not just a documentation but a real
  • 00:15:06
    issue that um the um
  • 00:15:11
    basically um vision is lacking Clarity
  • 00:15:15
    because there are too many too many
  • 00:15:16
    goals being
  • 00:15:18
    followed yeah and that's the um the main
  • 00:15:22
    um findings we found Jamie will go a
  • 00:15:25
    little bit uh in more into more detail
  • 00:15:27
    on a couple of other points uh and I
  • 00:15:30
    would now like to uh bring Paul
  • 00:15:33
    Chatterton on board um from landscape
  • 00:15:36
    Finance lab as the name implies he's
  • 00:15:38
    very experienced with um developing but
  • 00:15:42
    also investing in uh landscape projects
  • 00:15:45
    as a background with WWF for a very long
  • 00:15:48
    time also a lot of in-country uh
  • 00:15:51
    experience uh and I would like to ask
  • 00:15:53
    you Paul first I mean how does this
  • 00:15:55
    relate to what you are seeing in
  • 00:15:58
    projects in um activities uh in
  • 00:16:03
    Investments you are
  • 00:16:04
    making well first Tim thanks for having
  • 00:16:08
    having me on board congratulations to
  • 00:16:10
    Silva I mean there I I remember talking
  • 00:16:13
    with you both when you started up and
  • 00:16:14
    I've not had a lot to do since with you
  • 00:16:17
    since then but uh in terms of actually
  • 00:16:19
    getting involved in the projects but to
  • 00:16:21
    see this range of projects now now going
  • 00:16:24
    through your system and and this sort of
  • 00:16:27
    analysis is really it's really fantastic
  • 00:16:30
    um I forestry and carbon projects are
  • 00:16:33
    among the harder ones to do in the
  • 00:16:36
    investment world I'm sure um I mean all
  • 00:16:39
    all projects are not simple but um
  • 00:16:42
    forestry and carbon sadly have a have
  • 00:16:45
    have uh negative connotations in some
  • 00:16:48
    areas of investment so what what you're
  • 00:16:50
    doing really helps to counter that a lot
  • 00:16:53
    of that is because of project quality uh
  • 00:16:56
    in some areas not in not in all are
  • 00:17:00
    120
  • 00:17:02
    um businesses that could help Reef
  • 00:17:05
    protection and and Forestry was one was
  • 00:17:08
    one part of that um you know uh
  • 00:17:11
    restoring forests helps uh take the silt
  • 00:17:14
    out of the reefs and improves water
  • 00:17:16
    quality um so you
  • 00:17:19
    know they were looking across this whole
  • 00:17:22
    portfolio to to have a tool that helps
  • 00:17:25
    them to manage their projects would have
  • 00:17:26
    been tremendously useful
  • 00:17:29
    I think land evidence quality is a
  • 00:17:32
    critical one I know I I ran wwf's
  • 00:17:35
    operations in Papa guini for many years
  • 00:17:38
    and uh just about every project there
  • 00:17:40
    suffered from very poor quality um
  • 00:17:44
    evidence of approvals from from land
  • 00:17:46
    owners and I suspect that's still the
  • 00:17:49
    case for many of them uh so you know
  • 00:17:53
    that's uh that's going to help get
  • 00:17:55
    investment into into countries like Pap
  • 00:17:58
    guini where there's there's a there's a
  • 00:17:59
    low confidence um carbon model
  • 00:18:03
    estimation overestimation is a big one
  • 00:18:05
    we've we've certainly seen that with
  • 00:18:07
    some of the jurisdictional programs that
  • 00:18:09
    we've been developing and um yeah that's
  • 00:18:12
    um I think
  • 00:18:14
    um testing that making sure that the
  • 00:18:17
    claims are credible um helps the whole
  • 00:18:21
    sector because it just takes as we've
  • 00:18:23
    seen it just takes a couple of of
  • 00:18:26
    projects that are uh um making
  • 00:18:29
    exaggerated claims to bring everyone
  • 00:18:31
    down and make it harder for for everyone
  • 00:18:35
    um so yeah there's a there's a couple of
  • 00:18:37
    examples but I can see um I can see many
  • 00:18:40
    ways in future that um that we could
  • 00:18:42
    work together and uh and where you help
  • 00:18:46
    accelerate the whole industry I think
  • 00:18:47
    that's critical and professionalize it
  • 00:18:50
    um yeah so so thank you guys yeah thank
  • 00:18:53
    you and we are very curious of course
  • 00:18:54
    what comes with the N plus um nature
  • 00:18:57
    positive facility uh so we'll we'll
  • 00:19:00
    follow that uh closely and uh and see
  • 00:19:04
    see what's uh what's happening there um
  • 00:19:07
    I I don't want to open the Q&A now um
  • 00:19:10
    but there there have been a couple of
  • 00:19:12
    questions on the recording so we'll
  • 00:19:14
    share that uh obviously only after we've
  • 00:19:18
    uh finished the webinar um and uh there
  • 00:19:21
    is a question by
  • 00:19:23
    dun I hope I say that right um and we
  • 00:19:28
    are not actually
  • 00:19:30
    um providing funding ourselves uh so
  • 00:19:34
    that's not the role of Sila um but what
  • 00:19:38
    I would recommend for you to look at is
  • 00:19:41
    um the current open RFP from symbiosis
  • 00:19:44
    Coalition so you can find that for
  • 00:19:46
    example linked on on my LinkedIn would
  • 00:19:48
    be a place to to go to if you're
  • 00:19:50
    interested um and they they actually
  • 00:19:52
    provide very large scale funding also in
  • 00:19:55
    a in a pre- purchase model so in a model
  • 00:19:57
    where they commit early
  • 00:19:59
    um and they have a webinar actually in
  • 00:20:01
    one and a half hours to describe their
  • 00:20:04
    RFP um so if you want to join that that
  • 00:20:07
    would probably be a good idea to do that
  • 00:20:09
    but unfortunately no direct funding uh
  • 00:20:11
    from us and now um I would uh like to
  • 00:20:16
    hand over to Jamie who's already uh
  • 00:20:19
    shared his screen and we'll go a little
  • 00:20:21
    bit more into detail on what this all
  • 00:20:24
    means in practice how it's happening and
  • 00:20:27
    uh over to you Jamie
  • 00:20:32
    great just see if I can make sure I'm
  • 00:20:35
    moving through are you seeing uh yes
  • 00:20:39
    screen y great so well thank you Paul
  • 00:20:43
    thank you for intervening there and
  • 00:20:45
    giving a practitioner's view from both
  • 00:20:47
    investment but also the the the
  • 00:20:49
    development of landscape projects um
  • 00:20:51
    with a wealth of experience and thank
  • 00:20:53
    you Tim uh so as you've heard from Tim
  • 00:20:56
    and from Paul there's a lot we can
  • 00:20:57
    collectively learn from the due
  • 00:20:59
    diligence outcomes um especially in
  • 00:21:02
    terms of how to improve and this is a
  • 00:21:05
    combined effort right there's two sides
  • 00:21:07
    to the nature-based sector the funders
  • 00:21:09
    and the projects have areas where
  • 00:21:11
    improvements can be made so in this
  • 00:21:14
    section I will focus on some of those
  • 00:21:16
    learnings seen through the lens of the
  • 00:21:19
    of the
  • 00:21:21
    project so the report as you saw found
  • 00:21:23
    that over 90% of projects successed were
  • 00:21:26
    missing some data or or documents that
  • 00:21:28
    were important to the investor or the
  • 00:21:31
    buyer um the expectations on data
  • 00:21:34
    discipline really need to be met it
  • 00:21:36
    reflects on the professionalism of the
  • 00:21:38
    project of the sector and data rooms are
  • 00:21:41
    one way that you can organize yourself
  • 00:21:44
    these are commonly used tools for
  • 00:21:46
    investors and reflect best practice for
  • 00:21:48
    data discipline data rooms however
  • 00:21:51
    should not only serve as a repository
  • 00:21:53
    for files but also they can facilitate
  • 00:21:57
    collaboration and commun communication
  • 00:21:59
    among team members and external parties
  • 00:22:02
    project transparency and data
  • 00:22:04
    accessibility will help you prove not
  • 00:22:07
    just narrate about your performance this
  • 00:22:10
    is critical to funders because their
  • 00:22:12
    report for their reporting and their
  • 00:22:14
    risk
  • 00:22:15
    management so it should be essential
  • 00:22:17
    part of your management
  • 00:22:21
    too for projects the investor or carbon
  • 00:22:24
    buyer should not know more about your
  • 00:22:26
    project than you do
  • 00:22:29
    the fact is there are many eyes on your
  • 00:22:31
    project having a look at your project on
  • 00:22:34
    the platforms that your investors are
  • 00:22:36
    likely to use check how your boundaries
  • 00:22:38
    are falling in publicly accessible data
  • 00:22:42
    silver has designed our own analytical
  • 00:22:45
    tools and we use providers for mapping
  • 00:22:47
    analysis for example but even you can do
  • 00:22:50
    this even in a scale down version for
  • 00:22:52
    example if your project is situated in
  • 00:22:55
    the Mediterranean you could do a Google
  • 00:22:57
    search of forest issues in the
  • 00:22:58
    Mediterranean and what do you find you
  • 00:23:00
    find forest fires right so your project
  • 00:23:03
    will need a damn good forest fire plan
  • 00:23:06
    to convince a funer to go into the
  • 00:23:08
    Mediterranean Forest project Google
  • 00:23:11
    forest in Congo Basin what do you find
  • 00:23:13
    agricultural froners you need mitigation
  • 00:23:16
    around that look at a Google Earth map
  • 00:23:18
    of a site here in Ghana you see
  • 00:23:20
    settlements people social needs that all
  • 00:23:24
    tells you something it tells you the
  • 00:23:26
    context and the challenges of the
  • 00:23:27
    project and it screams risk to an
  • 00:23:30
    investor get ahead of the game here and
  • 00:23:33
    mitigate those
  • 00:23:36
    risks now moving a little bit away from
  • 00:23:39
    the headlines of the report I'd like to
  • 00:23:41
    go through a few more best practice
  • 00:23:43
    learnings that that we can see right so
  • 00:23:46
    this is structured across our six
  • 00:23:48
    categories that we use uh broadly in
  • 00:23:51
    silver just to uh pick on a couple here
  • 00:23:55
    under impact um baselines are not only
  • 00:23:58
    for carbon you need to understand and
  • 00:24:01
    fully map all of the stakeholders their
  • 00:24:03
    needs and their livelihoods because this
  • 00:24:06
    is key to setting the Baseline to be
  • 00:24:09
    able to prove that your understanding
  • 00:24:11
    and intervention of the social fabric of
  • 00:24:13
    that area creates a situation where the
  • 00:24:16
    people are better off due to the
  • 00:24:18
    presence of the project without the
  • 00:24:20
    project without the Baseline the social
  • 00:24:22
    Baseline you have no proof of that
  • 00:24:25
    Improvement that's often missed out when
  • 00:24:28
    trying to report against or claim impact
  • 00:24:31
    in a social
  • 00:24:33
    terrain under team for example um you
  • 00:24:37
    know being having visibility of your
  • 00:24:39
    board members so they're on common
  • 00:24:41
    platforms like LinkedIn they're on
  • 00:24:43
    websites and that you can ensure that
  • 00:24:46
    there's no direct or indirect
  • 00:24:47
    reputational hits linked to the entities
  • 00:24:50
    or individuals that are involved in your
  • 00:24:53
    project maintaining that professional
  • 00:24:55
    Integrity is absolutely Paramount
  • 00:24:59
    and there's several other examples on
  • 00:25:01
    safeguards getting the project design
  • 00:25:04
    right
  • 00:25:07
    Etc now let's focus a little bit on the
  • 00:25:09
    implications for investors the carbon
  • 00:25:11
    buyers the donors the
  • 00:25:13
    financiers the first learning for
  • 00:25:15
    investors is that just as you would not
  • 00:25:19
    buy or invest in any other asset without
  • 00:25:22
    good due diligence nor should you do so
  • 00:25:24
    in nature-based Solutions but it is
  • 00:25:26
    still happening today do due diligence
  • 00:25:29
    is the in investigation research or
  • 00:25:31
    exercise of care that organizations need
  • 00:25:34
    to take
  • 00:25:36
    undertake existing tools or proxies
  • 00:25:39
    simply do not cover all of your due
  • 00:25:40
    diligence areas as an investor so the
  • 00:25:43
    money will get stuck in the pipeline
  • 00:25:46
    there's a lot of of of Finance left on
  • 00:25:48
    the table certification for example is a
  • 00:25:51
    good proxy for compliance to a standard
  • 00:25:54
    but it does not tell you whether you
  • 00:25:56
    whether all the information is in place
  • 00:25:58
    for a know your client check or
  • 00:25:59
    background checks carbon ratings are
  • 00:26:02
    good proxies for quality but does it
  • 00:26:04
    cover financial robustness and stress
  • 00:26:06
    testing geospatial tooling and platforms
  • 00:26:09
    are great for understanding things like
  • 00:26:11
    carbon eligibility and you can use all
  • 00:26:14
    of these and incorporate them into a
  • 00:26:16
    broader due diligence approach so here
  • 00:26:19
    I'm going to outline some of the top
  • 00:26:20
    learnings for the funding side of the
  • 00:26:23
    nature based solution
  • 00:26:26
    equation now like nature itself it
  • 00:26:28
    follows that nature-based projects
  • 00:26:31
    cannot be exclusively siloed into
  • 00:26:33
    convenient categories whilst the
  • 00:26:35
    framework is important for applicability
  • 00:26:38
    and Reporting any project assessment
  • 00:26:41
    methodology or due diligence framework
  • 00:26:44
    must be able to productively and
  • 00:26:46
    elegantly navigate the fact that the
  • 00:26:49
    different disciplines of carbon science
  • 00:26:50
    silver culture project management and
  • 00:26:52
    social issues are inherently
  • 00:26:55
    interdependent and therefore any risks
  • 00:26:57
    that are under on Earth are
  • 00:27:02
    interrelated it's very common for the
  • 00:27:04
    same risk to fall into more than one
  • 00:27:06
    risk category a social risk for example
  • 00:27:08
    occurs when a project is not adequately
  • 00:27:10
    integrating local communities for the
  • 00:27:12
    long-term potential conflicts that may
  • 00:27:15
    arise in the future this situation can
  • 00:27:17
    generate a reputational risk bad press
  • 00:27:20
    but it also can create a delivery risk
  • 00:27:22
    for carbon credits and generate a hole
  • 00:27:25
    in the financial planning and Financial
  • 00:27:27
    Risk to to the investor for this reason
  • 00:27:30
    Silvera emphasizes the importance of
  • 00:27:32
    carrying out a cross-cutting 360 Dee
  • 00:27:35
    analysis of forests and nature-based
  • 00:27:38
    projects and our assessment methodology
  • 00:27:41
    deliberately and expressly is designed
  • 00:27:43
    to allow analysis of the flow between
  • 00:27:46
    categories so for example we use ibat as
  • 00:27:49
    a biodiversity um uh Source we use W's
  • 00:27:54
    Global Forest watch Earth blocks chloris
  • 00:27:56
    Hansen remote sensing and L data FSC
  • 00:27:59
    reports Vera registry documents manga
  • 00:28:02
    Bay articles rep risk and the list goes
  • 00:28:05
    on the art here is to combine all of
  • 00:28:09
    that to see the full picture anything
  • 00:28:12
    less if you're just relying on One
  • 00:28:13
    Source or two sources you will only be
  • 00:28:16
    shining the light on as a spotlight in
  • 00:28:18
    the corner of the football pitch and you
  • 00:28:21
    haven't turned on the flood lights to
  • 00:28:23
    see the whole
  • 00:28:26
    game secondly do diligence whilst it
  • 00:28:29
    serves as a communication bridge between
  • 00:28:31
    Financial ASP aspirations and social
  • 00:28:34
    economic stewardship that equilibrium
  • 00:28:37
    doesn't work if one side of the bridge
  • 00:28:39
    is too
  • 00:28:40
    heavy now by conducting due diligence
  • 00:28:43
    investors want to identify risks
  • 00:28:45
    maximize returns they want to understand
  • 00:28:48
    whether it aligns with their Frameworks
  • 00:28:50
    targets sustainable practices regulatory
  • 00:28:53
    requirements but you should be very wary
  • 00:28:56
    of projecting your needs onto the
  • 00:29:00
    project now silver Works backwards from
  • 00:29:02
    refunder requirements and those are
  • 00:29:04
    often very complex and need good Market
  • 00:29:07
    Intel but by getting wrapped up in your
  • 00:29:09
    own reporting complexities as an
  • 00:29:11
    investor you can miss how you might
  • 00:29:13
    actually be negatively influencing the
  • 00:29:15
    project there's some examples of how an
  • 00:29:18
    ill-informed ivory Tower strategy can
  • 00:29:21
    create your own problems of
  • 00:29:23
    implementation for example working
  • 00:29:25
    solely with project documentation and
  • 00:29:28
    other sources thereby embedding a
  • 00:29:30
    Stockholm syndrome into your assessment
  • 00:29:32
    process a singular or a dominating focus
  • 00:29:36
    on the unit of value that you're trading
  • 00:29:38
    carbon for example and therefore you
  • 00:29:41
    you're making the other impacts
  • 00:29:43
    potential delivery risks into an
  • 00:29:46
    afterthought like social
  • 00:29:48
    impact if you poorly design your
  • 00:29:51
    internal documents for the workflows
  • 00:29:53
    here the pins for example that could Pro
  • 00:29:56
    push the project down a certain route
  • 00:29:58
    reporting that doesn't allow for key
  • 00:30:00
    impacts or risks to be
  • 00:30:02
    highlighted you could be creating an
  • 00:30:04
    overambitious or unrealistic irr which
  • 00:30:08
    will push the project towards certain
  • 00:30:09
    types of interventions that might then
  • 00:30:12
    clash with your other interest areas for
  • 00:30:14
    example aggressive single species growth
  • 00:30:17
    rates in order to get carbon May clash
  • 00:30:20
    with biodiversity considerations reduce
  • 00:30:23
    economic benefit and reduce the economic
  • 00:30:25
    benefit uh for benefit sharing
  • 00:30:29
    a third example is a call for risks to
  • 00:30:32
    be seen as improvements to be
  • 00:30:35
    funded traditional due diligence in more
  • 00:30:38
    mature asset classes may have investors
  • 00:30:40
    being accustomed to using risk
  • 00:30:42
    identification as a means to Simply
  • 00:30:45
    discarding projects when it comes to
  • 00:30:47
    nature-based Solutions such a privileged
  • 00:30:49
    position would be a luxury and such an
  • 00:30:52
    approach would be a missed
  • 00:30:55
    opportunity due to the huge role that
  • 00:30:57
    end BS has to play in tackling societal
  • 00:31:01
    challenges such as biodiversity loss and
  • 00:31:03
    climate
  • 00:31:03
    change the nassan state of project
  • 00:31:06
    pipelines investors and buyers who are
  • 00:31:08
    intent on catalyzing positive impact
  • 00:31:11
    would do well to leverage risks as
  • 00:31:14
    opportunities in order to strengthen
  • 00:31:16
    their project
  • 00:31:17
    portfolios on screen here is a copy of a
  • 00:31:19
    typical risk register that generated by
  • 00:31:22
    silver this can be used both by both
  • 00:31:25
    parties right not only to understand the
  • 00:31:27
    risk and what's gen generating that risk
  • 00:31:30
    but also how to mitigate the risk and
  • 00:31:32
    agree on it as a funding milestone for
  • 00:31:35
    delivery against a mutually agreed plan
  • 00:31:37
    of
  • 00:31:40
    improvement now lately uh investors
  • 00:31:43
    would do well to remember that just as
  • 00:31:46
    they are trying to understand the risks
  • 00:31:47
    of Land Management and intervention so
  • 00:31:50
    too are project developers equally
  • 00:31:52
    challenged with learning the language of
  • 00:31:54
    the financial world and upskilling
  • 00:31:57
    themselves to become well versed in the
  • 00:31:59
    processes and kpis that they will be
  • 00:32:01
    measured against be patient explain why
  • 00:32:05
    and what it is that you need and exactly
  • 00:32:07
    why you need
  • 00:32:08
    it you'll likely find that all of those
  • 00:32:12
    risks can be boiled down to one or two
  • 00:32:14
    deal breakers for you the priority areas
  • 00:32:17
    that you need to work on together to
  • 00:32:18
    enable funding to flow to get to that
  • 00:32:21
    level of understanding you should expect
  • 00:32:24
    projects to respond constructively to
  • 00:32:26
    risk findings in the following ways
  • 00:32:29
    there should be open openness risks
  • 00:32:31
    should never remain unanswered or
  • 00:32:34
    belittled
  • 00:32:36
    professionalism project developers and
  • 00:32:39
    proponents are passionate but that needs
  • 00:32:40
    to be on a par with professional
  • 00:32:43
    responsiveness Clarity long-term vision
  • 00:32:46
    and theory of change with the
  • 00:32:48
    operational reality
  • 00:32:50
    today Prudence the hockey stick growth
  • 00:32:53
    curves is not helping anyone if it's an
  • 00:32:55
    overambitious reflection of the project
  • 00:32:58
    real reality on the ground and Readiness
  • 00:33:01
    make sure that the project is reflecting
  • 00:33:04
    that it it has set a ro root map for
  • 00:33:07
    improvements it doesn't need to have
  • 00:33:08
    everything done today but they know how
  • 00:33:10
    they're going to get
  • 00:33:13
    there so to make all of that a bit real
  • 00:33:15
    for you I'll quickly run through a brief
  • 00:33:20
    example now firstly what did due
  • 00:33:22
    diligence uncover in this case well in
  • 00:33:25
    this example we found that the project
  • 00:33:28
    ignored or missed an entire social
  • 00:33:30
    grouping in its assessment of Rights
  • 00:33:32
    holders and their
  • 00:33:34
    needs how we found that we checked the
  • 00:33:37
    stakeholder map we looked for
  • 00:33:40
    settlements using geospatial tooling and
  • 00:33:42
    we checked against National laws on the
  • 00:33:44
    matter and we benchmarked the Project's
  • 00:33:47
    performance in this regard with other
  • 00:33:50
    projects in the
  • 00:33:51
    vicinity that led us to realize that
  • 00:33:53
    there was a core issue here that not
  • 00:33:56
    only could generate social unrest but
  • 00:33:59
    could have impeded the delivery of
  • 00:34:02
    carbon expectations and indeed reflected
  • 00:34:04
    on a huge hole in finances in conclusion
  • 00:34:07
    it became a red
  • 00:34:11
    flag so I'd like to thank you there I'd
  • 00:34:13
    finish my intervention and hope that
  • 00:34:15
    these insights have been enlightening
  • 00:34:18
    and
  • 00:34:21
    useful I'll hand back over to you Tim to
  • 00:34:24
    close out and for Q&A thank you very
  • 00:34:26
    much uh yeah for Q a um happy to answer
  • 00:34:30
    any uh any questions you may have we
  • 00:34:33
    have one uh in the uh Q&A that is access
  • 00:34:37
    to the recording I think I answered that
  • 00:34:39
    before so so we'll make the recording
  • 00:34:41
    available after the call uh and the
  • 00:34:43
    second one is from m per do you
  • 00:34:47
    collaborate with rating agencies such as
  • 00:34:49
    Kix Global which provide a quality
  • 00:34:51
    rating of C projects some of which
  • 00:34:53
    include NBS this could uh complement
  • 00:34:56
    your analysis yeah I think compliment is
  • 00:34:59
    a good uh is a good term here so
  • 00:35:01
    basically fundamentally rating agencies
  • 00:35:03
    do something adjacent but not the same
  • 00:35:06
    as we do so the the key element of a
  • 00:35:09
    rating agency Kix being one rosta um b z
  • 00:35:13
    or Severa is to basically tell you
  • 00:35:16
    whether a carbon credit is good is um
  • 00:35:20
    sort of delivering what it's promising
  • 00:35:24
    to do um and in many cases now with a
  • 00:35:28
    lot of
  • 00:35:30
    um uh with a lot of um side factors co-
  • 00:35:33
    benefits environmental saf cards uh
  • 00:35:36
    social benefits Etc um also being
  • 00:35:39
    analyzed but the core is measuring that
  • 00:35:42
    ton of carbon is it real is it good uh
  • 00:35:45
    we do a little bit of a different thing
  • 00:35:47
    so of course we we look at the carbon
  • 00:35:49
    projections as well but we typically
  • 00:35:52
    analyze the projects earlier in the
  • 00:35:54
    development um so basically our question
  • 00:35:57
    is more will the project be able to
  • 00:35:59
    deliver the carbon that it projects now
  • 00:36:02
    in the future uh when the carbon
  • 00:36:04
    issuance uh comes up and um again this
  • 00:36:10
    is we are needed and what Kix offers uh
  • 00:36:15
    is needed but just in different uh
  • 00:36:17
    different um phases of the project Jamie
  • 00:36:20
    you want to add to this yeah just to
  • 00:36:23
    underline yes we
  • 00:36:25
    do uh collaborate with rating such as K
  • 00:36:29
    Global um and you know sometimes there's
  • 00:36:32
    a there's a division of tasks there so
  • 00:36:35
    if a rating agency like kaix is going to
  • 00:36:37
    be rating a project at some point if
  • 00:36:40
    they're involved too early in that
  • 00:36:42
    process and feeding back then there's a
  • 00:36:44
    concern from from kaix for example that
  • 00:36:46
    there may be a conflict of interest
  • 00:36:48
    because they then later have to rate
  • 00:36:50
    against something that they've already
  • 00:36:52
    um assessed there we we we can um we can
  • 00:36:56
    dovetail our skills set so due diligence
  • 00:36:59
    can come in and get offer a due
  • 00:37:01
    diligence assessment to allow the um
  • 00:37:04
    investor to engage and then the rating
  • 00:37:06
    agency can come in when it's uh um at
  • 00:37:09
    the right stage for for Ratings so I
  • 00:37:12
    think we're starting to see a more
  • 00:37:13
    mature Market where everybody's role is
  • 00:37:15
    really starting to fall into place
  • 00:37:16
    instead of the uh the the knee-jerk
  • 00:37:20
    reaction approach to the market which is
  • 00:37:22
    everything under one Under One Roof
  • 00:37:24
    which leads to challenges and conflicts
  • 00:37:27
    of of
  • 00:37:28
    Interest yeah thank you jery we have one
  • 00:37:32
    more question here Tim you mentioned
  • 00:37:34
    something about having an IR of zero
  • 00:37:36
    would be okay too could you expand on
  • 00:37:38
    this yeah I mean that is basically
  • 00:37:40
    reflecting to projects that don't have a
  • 00:37:42
    profit goal so that are for example
  • 00:37:44
    philanthropic projects uh who
  • 00:37:49
    um ask themselves okay why should I do
  • 00:37:52
    an IR analysis um and there of course
  • 00:37:56
    the goal is not to generate a positive
  • 00:37:59
    IR
  • 00:38:00
    necessarily um because the goal is
  • 00:38:02
    basically uh not to turn a profit um but
  • 00:38:06
    what you want to make sure and want to
  • 00:38:08
    make sure very very well is that um the
  • 00:38:12
    project is actually able uh to finance
  • 00:38:15
    its operations for the lifetime or
  • 00:38:17
    ideally for a very long time uh even
  • 00:38:20
    even beyond the initially planned uh
  • 00:38:22
    time period so in that sense you don't
  • 00:38:24
    need a positive or a super high IR
  • 00:38:27
    probably would be better off if there is
  • 00:38:29
    uh actually a small positive IR um but
  • 00:38:33
    you have to do the analysis anyway even
  • 00:38:35
    if your goal is not uh to turn a profit
  • 00:38:38
    just to make sure that you are um there
  • 00:38:41
    with the um with the numbers that the
  • 00:38:45
    that the project can sustain itself for
  • 00:38:46
    the future so that it doesn't rely on a
  • 00:38:49
    constant uh input of additional
  • 00:38:51
    philanthropic funding to to uh continue
  • 00:38:54
    its work that's what I meant with this
  • 00:38:59
    yeah that is um that is uh just add
  • 00:39:04
    flavor to that um one of the things that
  • 00:39:06
    we could have raised as an as an issue
  • 00:39:09
    in
  • 00:39:10
    in the sort of feedback through through
  • 00:39:13
    the lens of a project developer is we've
  • 00:39:15
    seen several projects who um are
  • 00:39:20
    interested in in that growth potential
  • 00:39:22
    and many investors are interested in
  • 00:39:23
    that especially the ones going in early
  • 00:39:25
    stage interested in the growth potential
  • 00:39:27
    of of a project however structuring
  • 00:39:30
    those projects so they can receive
  • 00:39:32
    different types of funding is a real
  • 00:39:34
    challenge in this sector so you know you
  • 00:39:36
    often find projects who are stuck in the
  • 00:39:38
    philanthropy Loop um simply not simply
  • 00:39:42
    but one of the major reasons for that is
  • 00:39:44
    because they're not structured as an
  • 00:39:45
    organization that can actually absorb
  • 00:39:47
    Equity or loans so they need to be able
  • 00:39:51
    to be using their existing funding
  • 00:39:53
    sources in order to look ahead and and
  • 00:39:56
    understand how to structure that project
  • 00:39:59
    for the next phase of funding and then
  • 00:40:01
    build the the data room and the the
  • 00:40:04
    organizational infrastructure around
  • 00:40:06
    that future uh or else what happens is
  • 00:40:09
    they get to the edge of the cliff and as
  • 00:40:11
    it's known in the sector of the Valley
  • 00:40:13
    of Death they run out of that
  • 00:40:15
    philanthropic money and they're not
  • 00:40:18
    ready ready for the two years of of
  • 00:40:21
    uphill struggle that's required to
  • 00:40:23
    access the new financing right so
  • 00:40:26
    understanding Where You Are in that
  • 00:40:27
    Journey planning ahead and allowing your
  • 00:40:29
    organization to grow and and morph and
  • 00:40:32
    adapt into a type of organization that
  • 00:40:34
    can absorb different types of funding is
  • 00:40:36
    absolutely
  • 00:40:38
    key yeah maybe one additional comment on
  • 00:40:41
    the topic of growth potential we get
  • 00:40:43
    that asked a lot why why do you look at
  • 00:40:45
    growth potential that's sort of such a
  • 00:40:48
    uh sort of um yeah
  • 00:40:51
    not Maybe not immediately clear why why
  • 00:40:54
    that is important in in our space and we
  • 00:40:56
    see it Main
  • 00:40:58
    um as a very good model to um start
  • 00:41:03
    relatively small with the project prove
  • 00:41:05
    the intervention prove the model that
  • 00:41:07
    you're are doing both on a on a project
  • 00:41:10
    design level but also on a on a on a
  • 00:41:13
    social level uh and then um build out
  • 00:41:18
    from there right so so start with maybe
  • 00:41:20
    100 Hector 300 Hector 500 hectors um and
  • 00:41:24
    scale it up from there rather than go in
  • 00:41:27
    uh um with a project that starts with
  • 00:41:29
    50,000 100,000 hectares um that's that's
  • 00:41:32
    why we specifically analyze growth
  • 00:41:34
    potential and say is is that a
  • 00:41:36
    possibility that you can um start maybe
  • 00:41:39
    small but expand Beyond uh what is
  • 00:41:41
    currently there do you have additional
  • 00:41:43
    access to land um additional uh Revenue
  • 00:41:47
    sources to explore at a later stage when
  • 00:41:49
    when the product is more
  • 00:41:53
    developed oh now now we're getting the
  • 00:41:56
    questions um do you see the carbon
  • 00:41:58
    sector advocating for the Revival of
  • 00:42:00
    academic streams such as forestry which
  • 00:42:03
    have been on a steady decline for
  • 00:42:04
    decades I forestry programs faculties
  • 00:42:08
    being shut down Etc I would say well yes
  • 00:42:12
    there is a connection with this so for
  • 00:42:14
    example at the moment we are hiring we
  • 00:42:16
    are I mean we are not really the carbon
  • 00:42:18
    sector but but we are we are from this
  • 00:42:21
    sustainability standpoint and we are
  • 00:42:24
    hiring um from academic uh forestry
  • 00:42:28
    institutions um so uh I would say there
  • 00:42:32
    the connection is definitely there and
  • 00:42:34
    maybe Jamie you want to you want to add
  • 00:42:35
    to
  • 00:42:36
    that yeah most definitely yeah um close
  • 00:42:40
    to my heart as a as a Forester
  • 00:42:43
    um you know I think in in general the
  • 00:42:47
    the skill set in the sector um the
  • 00:42:50
    employment sector suffers from the fact
  • 00:42:52
    that forests are perhaps one of
  • 00:42:53
    Humanity's most undervalued assets um
  • 00:42:57
    you know traditionally we value them
  • 00:42:59
    according to how much Timber they can uh
  • 00:43:02
    generate or we don't value them at all
  • 00:43:04
    and they're cut down for uh to be
  • 00:43:07
    displaced by agricultural needs um I
  • 00:43:11
    think what we're starting to see is that
  • 00:43:13
    early emergence of an understanding that
  • 00:43:15
    forests offer so much more and it can be
  • 00:43:19
    reflected in a value a unit of value
  • 00:43:21
    like carbon or biodiversity credits uh
  • 00:43:24
    it can be reflected in Timber it can be
  • 00:43:26
    reflected in um and um you know
  • 00:43:29
    environmental tourism
  • 00:43:31
    ecotourism um and I think as you start
  • 00:43:34
    to see the projects themselves uh vary
  • 00:43:38
    those revenue streams you're starting to
  • 00:43:40
    see a need for uh a a new age of
  • 00:43:44
    Foresters and coming out of Academia to
  • 00:43:46
    actually fill those gaps both in terms
  • 00:43:48
    of the the startups that are that are
  • 00:43:50
    appearing around this space but also in
  • 00:43:53
    terms of the actual Forest projects
  • 00:43:54
    themselves right you need good social
  • 00:43:56
    Foresters not just not just uh tree
  • 00:43:59
    counting experts right so that I think
  • 00:44:02
    that that is we're starting to see a
  • 00:44:05
    rebirth there and it's a way of yet um
  • 00:44:09
    reversing the decline but I think uh it
  • 00:44:13
    it there some good
  • 00:44:15
    signs yeah there is an additional
  • 00:44:17
    question from Sarang uh so are these
  • 00:44:20
    philanthropic sources of funds expecting
  • 00:44:22
    carbon assets as a result well I would
  • 00:44:25
    say it's hard to give a en um answer
  • 00:44:29
    here um in that it's um not there is no
  • 00:44:35
    one siiz fit all for philanthropy but
  • 00:44:37
    but typically you would rather um see
  • 00:44:41
    the carbon monetization as an additional
  • 00:44:45
    uh sort of Revenue source for a project
  • 00:44:47
    that might be financed initially uh
  • 00:44:50
    philanthropically maybe maybe Paul you
  • 00:44:52
    can say something to that um is that
  • 00:44:56
    something that you you've seen I mean
  • 00:44:58
    you've worked on philanthropically
  • 00:45:00
    funded projects as well uh is that
  • 00:45:03
    typically that there would be some
  • 00:45:05
    carbon off take from these philanthropic
  • 00:45:07
    Revenue
  • 00:45:09
    sources there is in some cases yes um
  • 00:45:12
    you know if you look at the
  • 00:45:14
    um uh the UK Petland code uh which is a
  • 00:45:18
    carbon carbon investment program then
  • 00:45:21
    then some companies are looking for for
  • 00:45:24
    returns for their philanthropic
  • 00:45:25
    investment in terms of of carbon uh
  • 00:45:29
    claims and gold standard is doing a lot
  • 00:45:31
    of work on on how that might work but
  • 00:45:34
    generally generally this is not a not a
  • 00:45:36
    standard I mean uh I think those two
  • 00:45:39
    worlds can come together um over time it
  • 00:45:42
    would be would be very interesting to be
  • 00:45:45
    um to to have philanthropic more
  • 00:45:47
    philanthropic investment that leads to
  • 00:45:50
    Commercial Business models um but um
  • 00:45:54
    yeah I'll stop there
  • 00:45:55
    too I thinkk you and we have a question
  • 00:45:58
    from dun um in the forestry and oh I
  • 00:46:04
    hope dun the first name but correct me
  • 00:46:06
    if I'm wrong um in the forestry and Agro
  • 00:46:10
    forestry program how much money is
  • 00:46:11
    required to implement these projects I
  • 00:46:13
    would say that is a very hard question
  • 00:46:15
    to answer um in a sort of General
  • 00:46:19
    General way what maybe can be said is
  • 00:46:23
    that to um achieve certification
  • 00:46:27
    under an ACA accepted carbon standard so
  • 00:46:31
    if you look at Vera go standard plan Vio
  • 00:46:34
    Etc uh you're probably
  • 00:46:37
    talking uh about six digigit figures by
  • 00:46:42
    now um but not for the intervention but
  • 00:46:45
    only for the getting the documentation
  • 00:46:48
    right getting everything uh getting
  • 00:46:50
    everything together six-digit
  • 00:46:53
    Euro US dollar Swiss Franks uh to to get
  • 00:46:56
    everything in order to to uh achieve the
  • 00:47:00
    certification in many cases uh financed
  • 00:47:03
    with uh part Finance with philanthropy
  • 00:47:06
    but that is probably something you have
  • 00:47:08
    to look at and then on top comes the
  • 00:47:10
    intervention and there it's very very uh
  • 00:47:13
    depending on where you do it how you do
  • 00:47:15
    it so there it's hard to give a a
  • 00:47:17
    general uh General answer
  • 00:47:20
    there uh then I have marel with a
  • 00:47:24
    question uh how many years in average
  • 00:47:27
    uh are your aforestation projects first
  • 00:47:30
    to get carbon credits and then to get
  • 00:47:34
    the project
  • 00:47:36
    maturity
  • 00:47:38
    um I
  • 00:47:40
    mean depends a little bit there on where
  • 00:47:43
    you start I would say from from the very
  • 00:47:48
    start of the intervention if you do
  • 00:47:50
    aforestation um then you're probably
  • 00:47:54
    talking something like six years or so
  • 00:47:58
    um until you get the first credits
  • 00:48:00
    issued and then the full maturity that
  • 00:48:02
    depends a lot on on the geography also
  • 00:48:06
    in the tropics things grow a bit faster
  • 00:48:09
    um but but typically the the Project
  • 00:48:12
    Life Time somewhere between 20
  • 00:48:16
    30 uh years I would say um until um
  • 00:48:22
    until things are are getting
  • 00:48:24
    um uh completely completed
  • 00:48:28
    yeah um then um I saw a question Jamie
  • 00:48:35
    would you agree roughly um I mean longer
  • 00:48:38
    lifetimes as well so we see it's a it's
  • 00:48:41
    a broad question to answer yeah it
  • 00:48:44
    depends where you are geographically the
  • 00:48:46
    the species you're planting so many so
  • 00:48:47
    many variables right yeah but in general
  • 00:48:50
    I mean that is also the reason um maybe
  • 00:48:53
    why why um financing is not
  • 00:48:57
    as forthcoming at it is for example for
  • 00:48:59
    Venture Capital when you look at Venture
  • 00:49:01
    Capital to to Finance Tax startups they
  • 00:49:04
    typically have a 10year um fund life
  • 00:49:07
    cycle that means a typical investment
  • 00:49:09
    lasts between 6 to 8 years and that is
  • 00:49:12
    too fast for uh forests so you can't get
  • 00:49:16
    a forest completely through with with
  • 00:49:18
    the delivery and the financing uh
  • 00:49:21
    completed and paid back within that life
  • 00:49:24
    cycle otherwise if if that went faster
  • 00:49:28
    you would have VC Venture Capital all
  • 00:49:30
    over this um which which have advantages
  • 00:49:33
    and maybe some disadvantages as well but
  • 00:49:36
    um uh that would would simplify things
  • 00:49:38
    but but the fact that this takes a bit
  • 00:49:40
    longer is uh one of the reasons why it's
  • 00:49:44
    scaling but it's could scale maybe
  • 00:49:46
    faster if it were
  • 00:49:48
    faster M had a question that's may be
  • 00:49:51
    interesting for others as well as move
  • 00:49:52
    to the answer already can you explain
  • 00:49:54
    our functions who pays basically
  • 00:49:57
    uh and the the the very simple rule of
  • 00:50:00
    Thum there is investors pay us um we we
  • 00:50:02
    deliberately decided to do that to avoid
  • 00:50:05
    conflict of interest um so that there is
  • 00:50:08
    no um sort of um yeah even hunch of us
  • 00:50:14
    being influenced by the fact who uh who
  • 00:50:16
    pays us uh that said we we participate
  • 00:50:20
    and participated in some accelerators
  • 00:50:24
    where we we actually supported projects
  • 00:50:26
    but again paid by by an
  • 00:50:29
    investor I'm looking at
  • 00:50:32
    questions
  • 00:50:34
    um I think that is it um so we can we
  • 00:50:41
    also two minutes ahead of time so um if
  • 00:50:46
    there are any further
  • 00:50:49
    questions raise your hand put them in
  • 00:50:51
    fast um and otherwise I think we can
  • 00:50:56
    close close the session I don't know
  • 00:50:58
    Paul you want to make a final statement
  • 00:51:01
    [Music]
  • 00:51:03
    anything um you would like to
  • 00:51:07
    add um I'm funnily enough going back to
  • 00:51:11
    cars I'm thinking about what Henry Ford
  • 00:51:14
    did with the
  • 00:51:16
    uh with the with the assembly line he
  • 00:51:19
    put it all together he professionalized
  • 00:51:21
    it he kept quality he he increased the
  • 00:51:24
    quality and the speed and that produced
  • 00:51:27
    uh lots of cars very fast at a much
  • 00:51:29
    better price um we want to do the same
  • 00:51:32
    with Forest forests are the are critical
  • 00:51:35
    for so many things nature people water
  • 00:51:38
    uh food um it's really important what
  • 00:51:42
    you guys are doing and all
  • 00:51:44
    power thank you thank you very
  • 00:51:47
    much
  • 00:51:49
    and as I see no further questions feel
  • 00:51:52
    free to reach out to um to Ling U but
  • 00:51:55
    also to to Jamie and myself if you have
  • 00:51:58
    specific questions and we thank you for
  • 00:52:01
    your participation for your time for
  • 00:52:03
    your interest in nature and um yeah wish
  • 00:52:08
    you uh happy holidays uh Happy New Year
  • 00:52:11
    hopefully some time to relax and um see
  • 00:52:15
    you all soon in a forest uh close by
  • 00:52:18
    thank you
  • 00:52:19
    bye-bye thank you
  • 00:52:22
    everyone thank you
Tags
  • webinar
  • nature-based projects
  • risk management
  • community engagement
  • investor interest
  • project quality
  • due diligence
  • carbon credits
  • financial planning
  • Sila