The Ecological Company for Ethical Investors

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The Ecological Company for Ethical Investors
Pro-Biodiversity Business An illustration from
the Lower Danube Paul Goriup
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Business Attitude to Environmental Investment
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Net Ecological Benefit

• Net Ecological Benefit is the difference in
  ecological state of a geographically determined
  area from the present time projected forward to a
  specified future date, which can be considered as
  an improvement in ecological conditions and
  functions for habitats and/or species.
• Net Ecological Benefit infers the sustainable use
  of natural resources as an inherent feature of an
  investment proposal.

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PBB Investment Niche
PBBs
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Biodiversity in Business

• Forestry

• Agriculture

• Fisheries

• Pharmaceuticals / cosmetics

• Water / soil conservation

• Green Tourism

• Biomass

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Company Development

• 1996 Private limited company incorporated in
  England, endorsed by UK Ethical Investors Group

• 1999 FIED converted to a Public Limited Company
  to facilitate share offers and first step for
  potential listing

• Since 1996, gt160,000 of share capital
  contributed from individuals, as well as
  preference capital from WWF (1998) and Doen
  Foundation (2002)

• Fieldfare has a subsidiary (Salix) in Odessa,
  Ukraine a JV (Salvinia) in Bulgaria subsidiary
  in Romania closed

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Main Statutory Objects

• To promote ecologically sustainable development
  and the maintenance of ecological processes
  through wise use of natural resources,
  restoration of damaged ecosystems, conservation
  of genetic diversity, and increasing human
  understanding of and capabilities to protect
  global biodiversity

• To adhere to an ethic of environmental care which
  strives to ensure that the operations of the
  company shall not result in unsustainable use of
  natural resources, emission of environmental
  pollutants, wastage of materials, or lead to the
  destruction of the social fabric of local
  communities

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FIED Approach

• to promote ecologically sustainable development
  and wise use of land and natural resources,
  especially in the Lower Danube region

• to foster local employment and develop business
  activities that monetise nature and have a net
  ecological benefit

• to provide a POSITIVE platform for utilising the
  resources of the ethical investment movement,
  with the eventual aim of a public listing

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PBB Cluster Development
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The Lower Danube Region
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Main Investment Locations
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Investment Studies
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Monitoring Net Ecological Benefit

• A proposal for a pro-biodiversity business
  investment should be able to demonstrate with
  independent expert verification that Net
  Ecological Benefit will take place, and that this
  improvement is directly attributable to the
  investment itself, and its operation over time.

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Monitoring Net Ecological Benefit
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Monitoring Net Ecological Benefit

• The selection of appropriate indicators has
• to take account of
• the business activities of the company
• locality of the business and adjacent
  environmental conditions
• whether benefits will be arise from use,
  restoration or set aside
• presence of habitats or species of conservation
  concern
• feasibility of monitoring
• potential for autonomous data collection by the
  company itself.

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Monitoring Net Ecological Benefit selected EEA
SEBI
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Ecotourism Strategy
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Ecotourism Purpose

• FIED works to attract visitors as a market for
  local business partners in sectors such as
  crafts, angling, private accommodation,
  traditional cuisine, biofuel and organic farming

• In return, our business partners help to raise
  environmental awareness, protect valuable
  habitats and maintain local culture

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The Delta ... Europes Tropics
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The Coast ... Secluded Shores
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Eco-Tourism Development
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Eco-Tourism PBB Benefits

• A private hotel owner has leased a nearby Nature
  Reserve to manage it for biodiversity
  conservation ecotourism

• Donations made to improve management /
  communications at three Biosphere Reserves

• Assistance for formulating local Green Tourism
  policies

• Counterweight to mass tourism development

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Relevant Project Work
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EU ProBioPrise Study
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Some Lessons

• Communication

• The FIELDFARE approach is unconventional and much
  communication is required with local stakeholders
  to allay suspicions that the company has some
  hidden agenda that will, in due course, put
  partners at a disadvantage.
• Keeping investments relatively small, and
  engaging NGOs, are helpful in this regard.

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Some Lessons

• Multi-sectoral Approach

Linking investments to ecological benefits (e.g.
wetland restoration) usually require a
multi-sectoral approach for example, tourists
need decent accommodation, clean food, transport,
information, guiding, etc.
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Some Lessons

• Multilateral Investments

It is helpful to work with several partners on a
project to prevent investments being captured, to
forestall corrupt practices, encourage
competition, increase bargaining power, and
facilitate redundancy if any one partner proves
unsatisfactory.
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Some Lessons

• Training and Supervision

In the rural areas where FIELDFARE operates,
there is a virtual absence of qualified personnel
even if entrepreneurial talent is available.
Engaging management staff, training them, and
continuously supervising their work is essential,
and expensive.
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Some Lessons

• Delivering Rapid Results

It is expected that once a decision is made,
results will flow rapidly. This may not always be
possible, but at least some quick, visible
achievements should be planned. FIELDFAREs
purchase of property demonstrated commitment more
effectively than any speeches or documents.
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Some Lessons

• Due Diligence Audits

This is vital when selecting partners in an
economy in transition where accounting practices,
valuation of assets and liabilities,
profitability, depreciation and similar concepts
are poorly developed, if at all.
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Some Lessons

• Legal Backup

The legal situation regarding land ownership,
authorisations, investment and other matters is
often unclear or contradictory. A similar
situation exists with regard to accounting, tax
planning and repatriating profits. Good
professional advice is needed, preferably from
several experts.
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Some Lessons

• Expectation of Change

During the transition period, few officials
remain in post for long. And there can be Orange
revolutions . . .
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Further Information
www.smeforbiodiversity-steppes.com
www.ecnc.org/BiodiversityFinanceC/Index_711.html