The Green Climate Fund (GCF) brought together a unique ecosystem of climate action practitioners including private market champions and nature custodians who share a common goal of saving coral reefs during the international climate change meeting in Glasgow.
The “Global Fund for Coral Reefs: Reef-based Climate Resilience Finance” event, held on the side lines of COP26, showed what can be achieved when you combine a diverse mix of actors from the public and private sectors to pursue a common cause.
The urgency prompting combined forces is warranted as the rapid degradation of the world’s “rainforests of the sea,” and the resultant collapse of the rich ecosystems they support, has become emblematic of increasing climate effects. A UN-backed report last month found sea temperature rises between 2009 and 2018 led to a loss of 14 percent of the world’s reefs – more than the size of Australia’s reefs combined.
During the GCF event, international private capital advisers joined representatives of philanthropies, civil society organisations and donor countries the UK and France to discuss progress and next steps for the Global Fund for Coral Reefs.
Last month, GCF approved a USD 125 million investment of first-loss equity to create the fund’s investment window by partnering with Pegasus Capital Advisors, an impact investment manager of private markets. The Global Fund for Coral Reefs is a 10-year, USD 625 million blended finance vehicle consisting of a grant window, designed to incubate a pipeline of investible projects, and an investment window which GCF is funding.
Speakers at the event included Ambassador Peter Thomson, UN Secretary General’s Special Envoy for the Ocean, who gave framing remarks for the session, and Yannick Glemarec, GCF Executive Director, who spoke about how GCF's first-loss position will de-risk private investment.
Elizabeth Maruma Mrema, Executive Secretary, Convention on Biological Diversity, spoke about how coral reefs are the centre of a complex social and economic system that support people’s livelihoods and well being. Chuck Cooper, Managing Director of Policy and Government Relations at Vulcan, representing the Paul G. Allen Family Foundation and Executive Board Chair of the Global Fund for Coral Reefs, emphasised the urgency of action in order to change the trajectory of the coral reef crisis.
Jodi Smith, Head of Local Strategic Vision and Sourcing Pipeline Businesses, Matanataki, and Shenique Albury-Smith, The Bahamas Program Director, Nature Conservancy, provided examples of country programmes from Fiji and the Bahamas. Sanjeev Krishnan, Chief Investment Officer of S2G Ventures, Builders Vision, made an announcement during the event of the support of Builders Vision for the Fund.
The panel discussion also featured Preeti Sinha, Executive Secretary, United Nations Capital Development Fund; Gideon Henderson, Chief Scientific Advisor, UK Government’s Department of Environment, Food and Rural Affairs (DEFRA); Craig Cogut, Chief Executive Officer, Pegasus Capital Advisors; and Henry Gonzales, Director of GCF's Private Sector Facility, who discussed how to ensure that synergies from the grant and investment windows could be realised and the programme could deliver results at the country and regional level.
GCF’s anchor funding in the Global Fund for Coral Reef’s investment window will facilitate private sector capital investment in the blue economy to protect coral reefs, building on the impact of projects incubated by the grant window. GCF’s first at-scale private sector programme in the blue economy, will cover 17 countries across Africa, the Asia-Pacific, Latin America and the Caribbean. GCF’s equity investment is designed to catalyse a co-financing ratio of 1:3.
The session closed with remarks by Haoliang Xu, UN Assistant Secretary-General and UNDP Director of the Bureau for Policy and Programme Support, who recalled that the discussion on coral reefs is also about communities, the ecosystems that support them, and their aspirations for a better life.
Coral reefs form vital bulwarks in bolstering climate resilience. While coral colonies cover a tiny fraction of the ocean floor, nearly a quarter of all marine species depend on them for refuge and sustenance.
Discussions during the GCF event made clear that efforts to meet the climate challenge are showing the increasing compatibility of business priorities and nature conservation. The trillions necessary to finance climate action, especially in developing countries where budges have been hit hard by the COVID-19 pandemic, means the private sector needs to assume a central role.
The Global Fund for Coral Reefs applies a blended finance model. This uses public finances to attract commercial capital to fund projects that contribute to sustainable development, while providing financial returns to investors.
GCF is a strong supporter of blended finance which allows it to capitalise on its climate finance portfolio, currently valued at USD 10 billion, to catalyse far greater flows of investment for developing countries’ climate action.