Singapore’s status as a regional hub for environmental, sustainable and governance (ESG) issues has been growing rapidly over recent years.

The city state has drawn a number of businesses focused on decarbonisation, green finance, and sustainability. This has been complimented by a plethora of new family offices whose principals are keen on doing well by doing good.  

Global environmental non-profit organization The Nature Conservancy (TNC), recently announced its official expansion into Singapore, supported by the Singapore Economic Development Board.  

The newly established office will serve as a strategic global centre for partnerships, innovation and scientific research, focused on addressing the interconnected crises of climate change and biodiversity loss. However, TNC also has a proven track record of putting together innovative debt conversion instruments.

The Asset (TA) recently met with TNC’s Singapore country director Tom Brzostowski (TB), who expanded on the organization’s plans for the new Asian hub.

TA: The Nature Conservancy has an impressive track record of constructing debt conversion instruments, especially in marine conservation, typically how do these projects work?

TB: In their most simple form, our debt conversion for nature transactions work like this. We help restructure a portion of a nation’s debt under more favourable terms, in exchange for commitments to protect nature and allocate savings to fund ongoing conservation or climate adaptation activities. TNC then brings the policy, stakeholder engagement, science and planning to help governments create protected areas and support climate mitigation and adaptation. The result is more funding and durable, inclusive climate and biodiversity protection without increasing – and at times reducing – the country’s debt burden.

Funding ocean conservation and climate change adaptation activities is difficult for most countries, but the challenge is particularly acute for those that are highly dependent on vulnerable marine resources. What we see is that many of these countries experience high debt burdens, which when coupled with reduced access to financing due to high interest rates and increasingly constrained development funding, means that conservation work takes the back seat. This, in turn, perpetuates their vulnerability to natural disasters.

TNC completed its first project under this strategy in the Seychelles in 2016. Since then, we have closed three similar projects, in Belize, Barbados and most recently Gabon. To date, the Blue Bonds programme has helped refinance more than US$1.2 billion of debt globally and is expected to generate over US$400 million of new funding for conservation in support of national commitments to protect and improve management of more than 176 million hectares (or 1.8 million square kilometres) of ocean, an area larger than the Gulf of Mexico.

Innovative financial mechanisms

TA: Are there any debt conversion projects in the pipeline within Asia-Pacific? Will we see the Nature Conservancy working with “local” Asian banks to develop debt conversion solutions?

TB: TNC has a deep-rooted dedication to safeguarding the rich and diverse ecosystems in the Asia-Pacific region.

As for debt conversion projects, their suitability and applicability in the Asia-Pacific hinge on the unique circumstances and priorities of each country. While we've achieved success with such projects elsewhere, we maintain an open-minded approach to innovative financial mechanisms that can propel our conservation objectives and tackle environmental and climate challenges effectively.

Our pledge to the Asia-Pacific extends to our ongoing assessment of opportunities and our collaborative efforts with partners. Our overarching goal is to unearth impactful solutions for conservation and climate concerns, thereby playing our part in preserving the invaluable natural resources of this region and enhancing the well-being of its communities.

TA: Across Asia, there is an immense generational transfer of wealth taking place that could see as much as US$2 trillion handed to the next generation. Is The Nature Conservancy in tune with the beneficiaries? And how do you attract their potential donations?

TB: At TNC, we recognise the importance of engaging with the next generation who stand to inherit substantial wealth. We recognize that their values and approaches to wealth, philanthropy and investing might differ from those of their predecessors. To connect with these future stewards of the Earth we start by actively seeking to understand their values and motivations. We align with their values and aspirations, recognizing their desire to create meaningful change, particularly in areas like climate change and biodiversity conservation.

We emphasise the tangible impact of their philanthropy, showing how their support directly advances positive environmental change. We engage personally, provide educational resources, and opportunities to visit and experience projects in the field and to meet with our partners and beneficiaries to showcase the real-world impact of their contributions on people and nature.

Lastly, the next generation often seeks to combine their investment activities with positive social and environmental impacts. Through NatureVest, the impact investment unit of TNC, we can offer individuals and family offices opportunities for impact investing, where investors can contribute to deals or projects that not only yield financial returns but also generate measurable environmental and social benefits.

Growth versus natural resources

TA: As Asia’s middle class expands there is an increasing need for power but that in turn places a huge demand on the region’s natural resources, how does the Nature Conservancy tackle this?

TB: Addressing the growing demand for power in Asia's expanding middle class while preserving the region's natural resources is a complex challenge. We approach this issue through a combination of strategies that aim to meet people and countries’ needs for energy and development in the least environmentally impactful way possible.

We encourage, promote and support the development and adoption of sustainable energy sources. This includes renewable energy such as wind and solar, as well as energy efficiency measures - such as modernizing electric grids - to help reduce the ecological footprint of power generation. Another vital part of our work is to ensure new renewable energy development (such as more wind turbines and solar panels) are sited as quickly as possible, with minimal impact to natural habitats and local communities.

TA: Is there a pathway for the Nature Conservancy to partner with Asian conglomerates or Asian Airlines to raise awareness and funding to deliver better outcomes for both people and nature?

TB: Aligning business goals with conservation is critical to addressing the global biodiversity and climate crisis and building a future where both people and nature thrive. TNC recognizes the importance of working with businesses in creating a sustainable future.

The private sector has the potential to create significant changes in how we value, manage, and enhance natural resources. That’s why we’re applying our seven decades of science and place-based expertise to make supply chains more sustainable, reduce carbon footprints and help businesses make better decisions for people and nature.

Here, in the Asia-Pacific region, TNC will identify, test and scale up market solutions that accelerate the development of projects proven to create sustainable development models. We will also use our science to influence sectors that have major impacts on critical ecosystems. And we will work to ensure that economic prosperity is equitable, and that the communities closely tied to the natural resources that are impacted by commerce benefit from sustainable development and improved livelihoods.

TA: Are there any examples from other jurisdictions?

TB: One example I can share with you is our partnership with Bank of America.

Coral reefs are vitally important marine and coastal ecosystems. Healthy coral reefs can break-up as much as 97% of wave energy. During major storms, they can dramatically reduce flooding in the coastal communities that sit behind reefs. As reefs break these waves, they become damaged, reducing ecological function and coastal protection during subsequent storms. Damaged reefs can be repaired via immediate post-storm actions, but funds are needed to finance the work.

With support from Bank of America and other funders, TNC and its partners developed a first-of-its kind reef insurance policy that is now covering a 160-kilometre stretch of the Mesoamerican reef in Quintana Roo, Mexico. If a storm of a predetermined intensity enters an area around the reef, an insurance payout is triggered, providing immediate funding for first response reef brigades, which then deploy to repair the reef. With support from Bank of America, TNC is now working to scale this model beyond Mexico to other Mesoamerican reef countries, across the US and potentially here in the Asia-Pacific region.

Bank of America has also provided funding to TNC’s debt conversion efforts. We recently partnered with Bank of America on our latest debt conversion transaction in Gabon.

Influence of Lee Kuan Yew

TA: Why Singapore for the new office and why at this time?

TB: Well, we actually have an interesting and long history with Singapore. Former minister-mentor Lee Kuan Yew co-founded our Asia-Pacific council right here in Singapore with Hank Paulson, the former US treasury secretary. This group of influential leaders still supports and guides our conservation and climate efforts across the region to this day.

Over the last few years, we’ve been watching Singapore strengthen its status as this regional and global hub for things like climate action (especially around nature-based solutions and carbon markets), green and blended finance, and corporate sustainability. We identified some specific opportunities where we felt TNC could bring our global expertise and resources to support Singapore in achieving its climate and sustainability aspirations and its 2030 Green Plan, especially with respect to establishing Singapore as a regional and global hub for carbon services and green finance.

And, in turn, we recognised how a presence in Singapore would enable us to deliver a greater and accelerated impact toward our own 2030 goals. We know we can’t have a sustainable planet without a sustainable Asia-Pacific, and it’s clear that Singapore has become a critically important piece of the puzzle to help us get there. That’s why this year we’re pleased to have launched TNC’s newest country programme as a global centre for innovation, science and partnerships, with support from Singapore’s Economic Development Board.

There is no question that Asia is the epicentre of the fight to halt and reverse the climate emergency and biodiversity loss. More than 4.3 billion people call this part of the world home. And sadly, Asia is the world’s most disaster-prone region and is warming faster than the global average. But it’s encouraging to see Asia leading the charge in the fight for a cleaner, healthier and more sustainable world – and at the heart of this climate action movement is Singapore. And TNC is honoured to play our role in supporting Singapore and the region.