Financing Regeneration at Bioregional scales

Introduction

Late last year I completed a research project for the South Devon Bioregion, likely to become the first UK bioregion to set up its own financing facility to fund regenerative work. By way of preparation, the team at Bioregional Learning Centre (BLC) were curious to find out about financing facilities elsewhere across the world that were supporting the building of capacity for regenerative work at local scales. Below I summarise the findings .

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The architect and veteran regenerative practitioner Bill Reed once quipped about the scale at which we should think about our regenerative work. “We might not be able to save the planet”, he said, “but perhaps we can save our places, one at a time.” Our imperilled ecological processes are of course woven together at local scales, and at that level it is easier to relate to and care for them. Connecting to our landscapes and life’s diversity around us, clearly comprises a part of our identity. We encounter it regularly in our rivers, plants, wildlife, our soils, the air we breathe in common. This care for locale goes for ruptures in our social fabric too. So, how to participate in lifting our places to an end state, a state from which they have the capacity to healthily regenerate and evolve themselves? And how are people across localities already working to direct financial resources in this direction?

The questions we asked

We were interested if finance and funding was conscious of this notion of end states. We were curious about the sources of finance: did care for places translate into local people investing in them? Scale too: was investment flowing at a level that could be transformative? And learning. Did resources also address climate adaptation, and the capacity to learn how to continue to adapt. And finally, governance. Who was in control, and where was any resulting wealth ending up?

Investors next door

We started from the hypothesis that there is financial wealth in any community for this work. This brought us quickly into contact with the local investment clubs springing up across the United States, brought to prominence by the local investment champion Michael Schuman.

One example. Pioneer Valley Grows  in western Massachusetts is a community Investment fund set up within the local County Community Development Corporation (CCDC). The CCDC provides due diligence and financing. Local resident investors are drawn by the potential for a local, and viable food system. Together they have created a pool of ‘social impact notes’ returning 0-2% per annum, with loan amounts ranging from $1,000 to $250,000 for all types of local farm and food businesses. Other U.S. clubs work at an even smaller scale where investors and investees meet regularly face to face in their communities. Members of these clubs report that they value the meaningful relationships – the social capital – that grow through creating these networks. Examples abound in the Main Street Journal.

Over here in the UK, a more remote approach relationally speaking, yet still effective, is local crowdfunding. An example. Crowdfunder Foundation, the charitable arm of the UK's leading crowdfunding platform supports the Sussex Bay project which plans to generate a £50million fund by 2050, and engage 1 million people to restore nature to thriving along 100 miles of Sussex coastline. Each crowdfunded donation receives a live match from the matching pool that doubles the donation in real time. This appears to incentivise participation, boost visibility of the project, and tends to increase the size of the pot.

While both these approaches mobilise money, the capacity for learning to adapt to a changing world is effectively privatised – within a business, or within a project team – if it is thought about at all. The belief at BLC, on the contrary, is that growing this capacity needs to be a broad- based public endeavour, a community-wide engagement and commitment, unique to each bioregion and its story.

Funding as acupuncture

In South Devon, the Bioregional Learning Centre has been asked to commit the next 18 months to taking a lead role in moving the region towards climate adaptation, in partnership with local bodies across all sectors voluntary, community and public. The plan is to build on the outcomes of a ‘Learning Journey for Climate Adaptation’ led by BLC in June 2024 which explored with farmers, communities, town councils, and all those already innovating (in agriculture, horticulture, energy, health and social care) how to adapt to what BLC are calling the Long Emergency. To understand what is needed to grow future resilience over time. This Journey demonstrated even more clearly the need for funding mechanisms to think in ‘wholes’; to address interconnections rather than single ‘controllable’ projects. To see in other words, the entire interconnected landscape as dynamic, interacting, on the move. And to ask where best, at what points where energies cluster the most should funding focus, like acupuncture, to lift the vitality, viability and capacity of the whole bioregion to evolve?

With this dynamic picture, and the limitations of the two approaches above in mind, we sought inspiration closer to home. We found it in our own UK bioregioning community, in one of our sister initiatives Bioregioning Tayside, in Scotland.

Scotland, famous for its once salmon-rich rivers has launched the Riverwoods Blueprint Project, led by the Scottish Wildlife Trust with an ambition to regenerate riparian habitats. Salmon struggle in water temperatures above 20°C, and adults can't leap falls when the water is above 23°C. Shade from trees helps keep rivers cool. As a keystone species, salmon returning to the rivers – given their numbers are in steep decline – would be a clear indicator of recovery to health of the whole watershed. The Riverwoods project on Tayside, is on the River Ericht one of the most important spawning grounds for Atlantic salmon in Europe. This is a 30-40 year community-led project, designed together with the specialist social impact investors Palladium who were guided by a community wealth-building approach. The Tayside community’s ambition, a decision that local landowners and the broader community reached together, is that the community development anchor organisation should not only govern the project, but over time, learn the necessary project skills to run it for themselves.

The scale of the work, and the intention for there to be benefits both to landowners and to the wider  community means there is a need to unlock private finance, and not rely solely on the National Lottery Heritage Fund and the Esmee Fairburn Foundation, the main grant funders behind Riverwoods.

Attention has therefore turned to the filling the gap with high integrity carbon credits through broadleaf tree planting that offer co-benefits: additional biodiversity uplift, water quality improvements, and of course the social returns. Palladium which has led the way on baseline assessment and financial modelling, is approaching philanthropists and corporate investors. One challenge in this case is that these credits, because they deliver widely for the community, are relatively expensive. We wait to see how this develops. Meanwhile, our Tayside colleagues also champion ‘community science’ as an approach to growing adaptive capacity. The community can choose whether or not to engage with scientific experts - who lead the more commonly known ‘citizen science’. It is characterised by self-organised learning. Governance of learning in other words, belongs to the community.

We found a number of elegant aikido moves like the Tayside one in our research – using the momentum of the existing system (like the appetite for carbon, biodiversity credits, ESG ratings) – to achieve more radical ends. For example, like creating a for-profit company (Highlands Rewilding) which has a board that has credibility with and is investable by, financial institutions. And which buys tracts of land in order to turn them over to community ownership, leasing the land back to manage it for nature recovery and natural capital monetisation. The proceeds are then shared between itself and the community trust that owns the land explicitly and in perpetuity for regenerative ends.

But until we encountered the Deshkan Ziibi Conservation Impact Bond, we hadn’t come across an approach that was truly transforming of the existing system, and that challenged the worldviews of all its partners. This Bond is designed to reverse the trend of habitat loss and to accelerate the growth and long-term stewardship of healthy landscapes on the shores of Lake Erie, in the so-called Carolinian Zone. It is Canada’s southernmost bioregion.

Transforming value return

The Carolinian Zone is home to many Indigenous Nations, some of the country’s most diverse flora and fauna, and approximately 25% of Canada’s human population. The design of the Bond was profoundly influenced by the worldview of the first Nation Deshkan Ziibiing edbendaagzijig  (“those that belong to Antler River”). They brought a fundamental imperative to the Bond’s design: that we must restore our relationships with the land in order for conservation to have long-term success. This perspective also stipulated that human benefit should be taken out of the centre of the Bond’s thinking. That humans be recognised as only one piece in nature’s interconnected web.

The Deshkan Ziibi leadership team comprised not only First Peoples, but also the local Ivey business school (as evaluators), growers and ecologists, as well as local impact investors Verge Capital and the main conservation body Carolinian Canada. On the face of it, a somewhat conventional grouping. But what was radical and therefore inspirational, was the principle the team agreed upon: that building the capacity for adaptation is fundamentally about creating, strengthening, and learning, about relationship.

The leadership team agreed 5 relational outcomes for the Bond:

1. Connecting Healthy Habitats

2. Connecting Knowledge/Circling and Learning;

3. Connecting Opportunities,

4. Connecting our Hearts and Minds

5. Connecting our Bodies.

What also piqued our interest in relation to the South Devon context, because it addresses the vision for for the bioregion to generate and retain more of its income, was the thinking behind Outcome 3: Connecting Opportunities.

Carolinian Canada told us that the relationships they facilitated across the community through the Bond enabled them to kick start a market for native plant garden centres through encouraging landowners to plant native plants on their land, and through community planting events. Carolinian Canada pointed to the clarity of the science: that restoring native plants is the most effective precondition for rebuilding the region’s biodiversity. They also knew that that the greenhouse, floriculture, and nursery markets in Ontario are worth 13% of primary agriculture market. So, it also made economic sense. But Outcome 3 speaks directly to adaptation too. Local planting of seed orchards allows the community to participate in the process of continually updating a region-wide seed bank, based on which local native plant varieties prove most capable to adapting to changes in climate. 

Relating between paradigms

Samantha Power and Leon Seefeld’s book Bioregional Financing Facilities published last year, also sets great store by relationships. Their interest is in how a commitment to building deep relationships and collective deliberation can surface strong and diverse projects and integrate them into investable bundles across a bioregion, eg. in regenerative agriculture, watershed restoration, community-led renewable energy and so on. So that you get mutually reinforcing benefits across all dimensions of the transition to a regenerative economy. But also, how in their structuring, these financing facilities can empower local people directly to make allocation decisions.

The working hypothesis sitting behind this is that these bioregional financing facilities will act as some kind of ‘connective tissue’ between the paradigm of conventional financial institutions and this less conventional, but vital work.

However, the sense we have from our research is that even if it is possible to grow it, this connective tissue will require more intensive relationship building than we may be accounting for. Particularly if its primary intent is to mobilise money. Here’s one UK example. The pioneering Wyre Catchment Natural Flood Management Project  brought together insurance companies, impact investors, government, NGO’s and a bank, and addressed just one principal adaptation issue in the catchment, as the name suggests.

Yet this multi-stakeholder project over 70 hectares which comprised woodland creation, leaky dams, ponds and scrapes, and new hedgerows, required an ‘adaptive management phase’ of five years - to allow the interventions to be altered according to how they performed. But for all the government money and impact finance required, four high-net-worth individuals were still needed, introduced to the project by Triodos Bank, the institution that structured the commercial loan. Imagine the complexities of bundling on top of flooding, cross-bioregional projects in community energy and regenerative agriculture.

Consider again the contrast with the Deshkan Ziibi example. In their case, the primacy of relationship-building – with all forms of life and for its own sake – rather than primarily for their utility, seems to be delivering both complex, and synergistic outcomes.

Funding and governance in decentralised spaces

We are aware of a great deal of activity in the decentralised virtual space, in what’s known as web 3.0 along with the use of blockchain to verify carbon and other credits and cryptocurrencies as a means of distributing funding. One initiative is Gitcoin which uses a quadratic funding algorithm so that a project funding pot will always award greater match-funding to projects with broader bases of support.

However, closer to the interest of this research – in relationship weaving – is another virtual initiative called Vivero, an app-enabled community-directed trust for participatory giving and grant making. Community members contribute financially monthly or through one-time gifts. Importantly, non-financial contributions are also recognized. The community collectively nominates and decides which regenerative projects and initiatives the pooled funds will support. Having joined a number of their meetings to explore this, I can testify to Vivero’s commitment to grow a trusting and vibrant community that encourages a growing consciousness around ‘needs’, both personal and project needs, and that the answer to our needs is not always financial support, or in any case financial support from conventional sources.

Nature as an asset class

Throughout the research we have also wondered is it possible in the search for return on investment to escape the financialising of nature? And, as Leon Seefeld points out in addition, the risks therein of further commodification, privatisation, and centralisation of natural assets and wealth. Which, we might argue, inevitably follow if we place human benefit at the centre, reduce nature to its services, and call on the existing financial architecture.

But if we cannot escape this reality for now, then how best to embrace it?

In the Deshkan Ziibi Bond case, the leadership team drew on their ‘story of place’ to address this tension. The two fundamentally different worldviews, those of the European settlers from the 17thcentury onwards, and those of the First Nations whose land they colonised were reconciled at the time into an approach that became known as ‘two-eyed seeing’. For the Bond therefore, Deshkan Ziibi agreed to embrace both Western and Indigenous eyes within the Bond’s metrics, agreeing on one measure from whichever paradigm described a particular concept more holistically.  Thus, five pay-for-performance relational metrics below were linked to the 5 outcomes.

Note the learning metric at no. 2.

1.     The number of Hectares enhanced.

2.     The number of people engaged with learning about the land

3.     The number of intercultural and cross-sectoral economic opportunities generated]

4.     Stories told of Nature connectedness

5.     The quantity and quality of ecocentric sightings

The uplift in carbon sequestration and biodiversity were side benefits of this holistic approach. However, they were a necessary component for enabling the Bond to work for so-called ‘outcome payers’: corporations and government, who capitalised the Bond. But it was how, the social process by which they arrived at their metrics, that they acknowledged was key. It was in tune with their context and their story.

This was true for all the examples we studied that were able to sustain their impact over time.

In the case of Common Land, the successful Dutch public benefit organisation with a vision to regenerate large landscapes (50K acres or more), the social process they embarked on initially before any intervention, was to conduct in-depth research with local farmers across a range of degraded landscapes. The farmers described a pattern of losses: a loss of meaning and pride; a loss of community and jobs; a loss of biodiversity; and a loss of investment capital. Common Land turned these around into 4 key and generic returns that they and their landscape partners now use to measure the impact of their restorative work.  But the potency of these generic measures and the way they are made specific to each context has led to Commonland’s success for over a decade. 

But are these returns granular or responsive enough to support changes of emphasis, or direction given the sheer pace of change in the external environment? Do they invite local actors and local institutions to find, and keep evolving their unique value-adding roles in enabling nature to find stability. And even integrate new energies generated say by climate change, to move landscapes towards higher orders of expression? Will the one-eye of conventional investors be satisfied with ‘simple’ metrics of impact?

In designing our own metrics we have an additional question: can we arrive at metrics which by their nature build the resources, capability, and will to continue evolving over time? We will be mindful of the teachings of the Deshkan Ziibi Bond as we do our own ‘two-eyed’ seeing. We will be holding in mind at least three frameworks in designing the most effective indicators to guide funding for interventions at the acupuncture points in the South Devon Bioregion.  One of these frameworks, the multi-capital framework is discussed in this paper by Josie Plaut, Bill Reed and Jim Newman. It offers useful catalysing questions that could get projects to achieve multi-capital outcomes. At another level of rigour, Regenesis offer two more frameworks both building on the work of Charlie Krone. The first distils a set of six critical success factors that enable living systems to support the evolution of life. The first three deal with the outer landscape of a place – the material structuring needed for life’s processes. And because we humans cannot be separated out from any living system, the next three address the inner developmental landscape. The third framework we’re drawn to is one that Krone called the ‘Four Levels of Work’. It presents us with a live and dynamic picture of the workings of any living system, like a watershed, that has the capacity to sustain its vitality, viability and its capacity to evolve. It begs the question of relevant indicators at each level, reminding us that we have a role of adding value, rather than one of ‘fixing’.