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Measuring the impact of investments remains a main challenge for sustainable finance professionals and, together with Climate Change, an overarching theme at TBLI. Sixteen related workshops offer ...

Measuring the impact of investments remains a main challenge for sustainable finance professionals and, together with Climate Change, an overarching theme at TBLI. Sixteen related workshops offer debate on ESG and Impact Investing trends, private equity, portfolio strategy, food production, emerging markets, sustainable energy or philanthropy investing.

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Sascha lafeld Sascha lafeld Presentation Transcript

  • Public Private Partnership “Water Benefit Partners“ Introduction to Water Benefit Certificates (WBCs) Dr. Sascha Lafeld | CEO, First Climate Markets AG | 14/11/2013 | Zurich, Switzerland 1
  • Water Benefit Certificates – How and Why? Water Benefit Partners (WBP) is a Public Private Partnership (PPP) that aims to develop an innovative financing mechanism to support additional water projects in regions particularly affected by water related problems. Water Benefit Certificates (WBCs) Water Benefit Certificates Revenue from WBC sales Each credit certifies that specific volume of clean freshwater has been supplied, purified or saved by the project activity during a specific period of time. Market development We create a market place for companies and individuals to allow for credible and transparent water stewardship engagement beyond public regulation. (Voluntary carbon market is comparable) 2
  • PPP Structure & Partners 3
  • Positioning the WBP PPP Corporate Water Management Core Review Manage, Reduce, Engage Water Stewardship/ Replenishment Investments Based on own water use and sites Not necessarily directly related to own water use and locations Benefits: Improved efficiency, improved quality, improved community relations, reduced corporate risk Benefits: Improved CSR management, improved supply chain management, improved water-related know how 4
  • WBC Certification Process 8. 1. 2. 7. Independent Auditor (e.g. TÜV, SGS, DNV) 3. 6. 5. 4. 5
  • Long-Term Financing with WBCs  Learning from carbon markets: often long-term off-take agreements with retailers/end-clients  WBCs are issued and sold on a yearly basis providing a regular revenue stream  Annual verification requirement provides incentives for sustainable project operation  Usually many WBC buyers per project  reduces risk of income loss  Multiple year crediting period  issuance and sale of credits over a long period of time 8. 1. 2. 7. 3. 6. 5. 4. Clear difference to ODA: WBC mechanism is designed to provide recurring payments over a long period of time instead of one-off donations 6
  • Four Basic WBS Project Type Categories Water Efficiency Water Supply  Water Efficient Shower Heads  Rainwater Harvesting  Alternate Wetting and Drying (AWD)  Construction of covers for water reservoirs/canals  ...  Construction of Freshwater Wells  Construction of Water Supply Infrastructure  Fog Harvesting  ... Water Treatment Water Productivity  Industrial Wastewater Treatment  Drip irrigation  Municipal Wastewater Treatment  ...  Direct Rice Seeding  Distribution of End User Water Purification Devices  ... The WBC mechanism is open to any kind of technology or project type as long as it addresses one or more water related issues! 7
  • WBC Technical Advisory Committee at GSF The Gold Standard Foundation‘s Water Technical Advisory Committee (Water TAC) started its monthly meetings in August 2013 Members include: Anna Forslund Stockholm Water Institute James Dalton IUCN Jamie Pittock Australian National University, Water Stewardship Australia Todd Gartner World Resources Institute Scott Harder Environmental Financial Group Biksham Gujja AgSri Agricultural Services Samuel Bryan Nexus Sascha Lafeld First Climate * The TAC needs to review and approve the Standard and WBC methodologies 8
  • Forecasting the Market for WBCs • A functioning market for WBCs does not yet exist, however the voluntary carbon market gives us a strong corollary Historical Offset Demand by Transacted Volume, All Voluntary Carbon Markets • Characterized by steady growth since 2006 • 101 million tons of carbon offsets contracted in 2012 – 4% more than in 2011 • Market value of $523 million • 90% of offset volumes were contracted by the private sector • Natural market for buyers with a high exposure to water risk! 9
  • Motivations of Potential WBC Buyers 1. Buyers facing indirect water risks through their business operations Service providers, e.g. financial institutions, that do not have a large direct water footprint, but that still have a business interest in addressing water risk E.g. MunichRe, HSBC, Google 2. Buyers for whom water becomes a limiting factor in their production processes and supply chains Buyers that already do a great deal to address their direct water footprint, and need/want to demonstrate their commitment to water stewardship E.g. Coca Cola, Olam, Nestle, Carlsberg, Danone, SAB Miller „The scarcity of clean drinking water has become one of the most pressing problems faced by societies worldwide. With the WBC mechanism, we can attach a value to the provision of quality drinking water in order to avoid wasteful distribution practices and direct it where it is most urgently needed.” Dr. Astrid Zwick, Head of Corporate Social Responsibility, Munich RE 10
  • Dr. Sascha Lafeld CEO First Climate Marktets AG Industriestrasse 10 61118 Bad Vilbel/Frankfurt Germany Email: sascha.lafeld@firstclimate.com Phone: +49 (0)6101 55658-11 Fax: +49 (0)6101 55658-77 www.firstclimate.com 11