Shortlisted for PRI Awards 2024: Recognition for Action – Nature
Organisation: EcoEnterprises Fund
Signatory type: Investment manager
HQ country: Costa Rica
The approach, initiative, or process
EcoEnterprises Fund is a women-led investment fund with an unparalleled 25-year track record of building investment portfolios of nature-based solutions, with a focus on critical natural ecosystems and working landscapes in Latin America and the Caribbean. The fund uses mezzanine, quasi-equity and long-term debt instruments to catalyse growth in nature-based solutions. The premier fund in biodiversity investing, we finance and partner with growing businesses to preserve and restore natural habitats, promote climate action and create social equity concurrent with generating financial returns.
We invest in companies in developing countries with business models centred on conserving biodiversity and/or sustainably managing it, with a strong focus on fair and equitable benefit sharing. Our investment strategy is primarily based on the three objectives of the Convention on Biological Diversity and the resulting goals of the Kunming-Montreal Global Biodiversity Framework.
EcoEnterprises Fund emerged as a pioneering financing tool to help protect Latin America’s critical ecosystems – home to around 60% of all known terrestrial and marine species. Since then, we have developed a rigourous impact investing strategy, all while remaining fundamentally committed to environmental conservation efforts throughout the region.
We continuously validate and refine our approach at every stage, building nature-positive portfolios that fully integrate place and community-based conservation strategies into profitable business models and enduring sustainability solutions.
Latin America’s unparalleled biodiversity and natural resource base gives it a competitive advantage in the development of environmentally and socially compatible businesses, which can be sources of positive change. We work to identify, invest in and support these companies, thereby encouraging the sustainable use of biodiversity as a mechanism for preserving it. Our portfolio is rooted in stewardship and sustainability, spanning the ecotourism, alternative forest products, aquaculture, bio-innovation, and regenerative agriculture and agroforestry sectors. At the core, these companies create value from protecting biodiversity and environmental integrity. By developing a vibrant economic engine to generate alternative livelihoods and revenue sharing for local peoples, these companies offset pressures on the landscape from unsustainable natural resource use.
Our portfolio companies help protect and restore biodiversity through different strategies and business models, including:
Direct conservation and restoration:
- preserving ecosystems through ecotourism operations and agroforestry systems;
- establishing biological corridors on working lands;
- eliminating deforestation due to increased productivity and partnership with communities.
Conversion from traditional to regenerative practices:
- supporting farmers in transition to regenerative practices;
- upcycling food waste;
- composting, recycling and reducing resource use along supply chains.
Increasing local capacity and innovation:
- providing alternative livelihoods to harmful practices such as mining and logging;
- linking rural communities with new markets;
- improving productivity and supply chain traceability through ag-tech and product developments.
We recognise the importance of each component within an ecosystem, and we have invested in biodiversity at every level: from soil microorganisms to scarlet macaws, the Amazon rainforest to the Galapagos Islands. Our nuanced and adaptive impact management approach allows us to identify how each company contributes to biodiversity conservation and highlight context-driven opportunities for further action.
One of our priority areas is to provide additional financial and capacity-building support to help companies formalise their environmental impact practices and enhance their biodiversity conservation. Companies achieve these goals by adopting certification schemes, applying regenerative agriculture and sustainable harvesting techniques and implementing biodiversity monitoring studies and management plans. Our impact legacy is derived from a deep understanding that to succeed, entrepreneurs need support beyond investment capital. Our first fund pioneered the blending of risk growth capital together with business support – and this “secret sauce” has been the foundation of our investment strategy ever since. By supplementing the fund’s tailored investment instruments with targeted technical assistance, we have maximised both environmental and social impacts and business outcomes to help our portfolio businesses thrive, contributing to the vibrancy and leadership of sustainable businesses in the region.
Beginning in late 2023, we worked with a local expert organisation to develop a biodiversity baseline and build a Biodiversity Action Plan for a Colombian portfolio company. The plan will serve as a strategic roadmap to guide in the conservation and sustainable use of biodiversity, while mitigating risks and communicating results. The biodiversity baseline assessment has produced incredible wildlife visuals from a nature-cam, confirming the natural capital value of the forests preserved by the company and serving to reaffirm its commitment to conserving and improving them through the further development of biological corridors. Guided by the biodiversity expert’s recommendations, this organic lime producer is already working to reproduce local endangered plant species in its in-house nursery. These species will be used to create biological corridors that connect sections of preserved forest throughout the company’s lime orchards.
Building upon the platform of investing over three prior funds in 50 deals, and with more than 50 limited partners across the funds, this year we are launching our fourth fund, EcoEnterprises Partners IV, LP, poised to take our unparalleled impact results and nature-related outcomes to the next level. Fund IV will continue our investment and stewardship efforts which, throughout the years and funds, have led our portfolio companies to support the protection or sustainable management of over 16 million acres, benefiting over 600,000 local people, while generating over US$2bn in sales.
The measures to ensure transparency and generate outcomes
Since inception, we have provided an Annual Environmental and Social Report to our investors, illustrating the results and progress of our companies’ sustainability efforts, collected through our comprehensive environmental and social management system. We have a LinkedIn profile where we highlight EcoEnterprises Fund’s and our portfolio companies’ achievements.
Additionally, we have also published two books filled with the valuable lessons learned from our two decades in the impact investing space, Portfolio for the Planet: Lessons from 10 Years of Impact Investing and Impact Investing for a Sustainable Planet: Insights from EcoEnterprises Fund.
As signatories to the Operating Principles for Impact Management and the PRI, we bolster transparency through public disclosure of our practices. In 2022 we published our first public disclosure statement on our alignment with the Impact Principles and we have been updating it yearly ever since. In 2023, we conducted and published our first external verification of this alignment. In 2023 we provided our first voluntary report to the PRI and this year we are preparing the first public report. Finally, we also publish a public impact report on our website.
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