Build Less, Measure More: A Fresh Model for Conservation Finance

When you pitch sustainable investing to the finance team in your shop, do you wish they’d lay off the questions about what it does for the bottom line?  Does that line about how it’s a win-win stick in your throat from overuse?
If so, a nonprofit in upstate New York wants to talk. The Restore the Earth Foundation (REF to its friends) teams with public agencies and other nonprofits to acquire land, restrict building on it, and measure the ecological benefits that ensue. It recycles money from partners who buy in to acquire more land, clustered around the Mississippi River- -and it even recruits volunteers from donor corporations to dig and plant. With a staff of six and a board of five, the Restore the Earth Foundation’s raising capital to reforest a million acres of valley around the lower Mississippi. Its model makes a killer slide for any deck:

Investments into the project will bring calculable, positive economic returns. And choosing not to invest means rolling the dice on a livable future for your suppliers, your customers and your employees.

The Restore the Earth Foundation rests on a tripod of claims: it steers companies to invest in land by working with local partners to buy and then restrict development on key parcels. It uses a financial model to track and report how this conservation improves forest health and  how healthier places stoke the flow of clean water and strong culture. And it sets up activities so that business partners’ staff get in on the digging and planting.

Ecosystems stir. Capital health lifts. And morale soars.

That’s the pitch PJ Marshall, who started the organization after decades in marketing, made at Climate Week NYC recently - and has made to players as big as Shell, Entergy and the United States Department of Agriculture. The proposition trades on leverage. Buying lightly used public land, then using a proprietary model called EcoMetrics to show (and verify) positive returns to a company’s resource base, Restore the Earth gives corporate partners both a visible project and a measurable economic gain.

One executive decided to ride this mission alongside the group. Ed Pinero, formerly the chief sustainability officer at civil-engineering company Veolia, is now consulting to the organization. As he puts it, he’s bringing the “business case” he found so engaging to other enterprisesns. And other companies that literally run on natural resources, including ride-hailing firm Lyft and clothier Eileen Fisher, signed on as partners.

The key to the model, on this view, involves the power to “leverage ecosystem services” - the things a healthy ecology does- “for operating benefit.” For Veolia, Pinero continues, a wastewater treatment plant on a coastline becomes a sitting duck amid sea level rise. Protecting coastal resilience, he explains, “is a matter of avoiding a much worse cost.” And with the organization’s EcoMetrics model offering  a third-party-blessed number for the benefits a restoration project brought to a landscape, Veolia got a number to plug into its risk/return forecasts going forward.

The case runs like this: here’s an outfit that can protect the nature on which you and your employees run, with a model called EcoMetrics that calculates the natural benefits and avoided costs your projects allow, and with chances for your staff to volunteer on those projects. Its goal involves reforesting a million acres around what it brands “North America’s Amazon” (the river, not the retail-munching online firm).

You can check off a few managerial boxes with this approach, including the one where you add value to an underused public good. See, a farming or gaming agency sometimes will gladly convey land to another party, who’ll manage it for long-term health under an “easement”- a covenant that limits development. Restore the Earth uses a revolving fund to purchase land, set it up with conservation easements that restrict real-estate development, and declare the value of the reforesting through its proprietary model.

But wait, there’s more. The organization says it steers 94 percent of its donations into program, uses local experts to select and plant trees, and fosters good ground for hunters and recreational fishers. According to Marshall, the US Fish and Wildlife Service advised her to set up a revolving fund for projects. “They and their partners felt that to be able to scale this by getting restoration and putting permanent conservation easements on property, then financing could return to us.”

That insight, she says, drove Restore the Earth to work with advisers to bang out the EcoMetrics valuation model. “There’s a lack in most instances of a metric to monetize the impact of any initiative,” she says.

Pinero says this kind of visibility attracted him to Restore the Earth orbit at his old job. It also attracted VMWare, which specializes in running data centers and other Internet infrastructure more efficiently.  “We were introduced to P.J. Marshall at a sustainability conference in San Francisco,” wrote Nicola Acutt, the firm’s vice president of sustainability, in an online interview. “Because of my background in systems thinking and ecology, Restore the Earth’s EcoMetrics framework immediately resonated and we were intrigued to explore opportunities to collaborate.” .

From a marketing perspective, Restore the Earth banks on this straight-arrow perspective. Since embarking on its mission to restore a million acres of the lower Mississippi valley, according to its website, it’s completed dozens between coastal Louisiana and western Kentucky. Four more are underway. Often, ccording to Marshall, local conservation or hunting groups often participate in buying and managing it.

To Pinero- and within the EcoMetrics model- this land acquisition means Restore the Earth projects are levering public resources for private returns. Of course, these returns don’t translate to profits that companies can invest in other projects. But, says Marshall, they do keep resources like water, minerals and human habitat there for the tilling.

Not coincidentally, says Pinero, many of the firms he now approaches on Restore the Earth’s behalf make their money from the ecosystem. They include electronics firms, food companies, and oil and gas concerns.

But for Marshall, the circle of invested corporations spreads to any company that collects more revenue when customers enjoy sounder health. Here she is describing her appeal to utilities:. “Utilities have been buying carbon offsets,” she observed. Utilities like Entergy welcome the valuation clarity EcoMetrics brings, Marshall claims, adding: “but the bottom line is that healthy communities in their service areas can pay their utility bills.”

The nimble thinking and high concept here can also serve to address companies' internal carbon goals- and, says Pinero, pay off in future markets for carbon or water-nutrient offsets.  . According to Acutt, VMWare hopes to talk with Restore the Earth about countering carbon emissions throughout its supply chain. “We hope to continue the partnership to include innovative and creative offsets as part of our broader portfolio. We like what they’re doing because of the scale.”

Scale leads to scale. Everyone in every meeting understands that.