Toronto, 11 November, 2019 – Today, RS Group, a Hong Kong family office focused on sustainability, and Convergence have launched a US$3 million design funding window for innovative and catalytic blended finance solutions focused on natural capital in Asia. Grants will be awarded in amounts ranging from US$50,000 to US$500,000.
The Asia Natural Capital Design Funding Window (the Window) aims to support practitioners who are finding new ways to enhance and protect the world’s stocks of natural assets, including water, land, soil, air, plants, and animals. The Window will support the design and launch of blended finance solutions focused on natural capital, which attract private investment at scale. These solutions will directly support the United Nations Sustainable Development Goals and could contribute to protecting biodiversity, reducing the degradation of ecosystems (e.g. deforestation), mitigating and adapting to climate change, reducing unsustainable use of land and oceans, and providing a fair and sustainable living to local communities.
Asia’s enormous economic growth in the last few decades has come at a high cost to its environment, leading to deterioration of land, freshwater, and marine ecosystems and exacerbating water and food insecurity and climate vulnerability. Globally, it is estimated that there is a US$200-300 billion gap per year to preserve the world’s last healthy ecosystems. Business as usual will mean irreparable damage to some of our most valuable natural assets.
“This significant funding gap for the preservation of ecosystems is both a challenge and an opportunity for the economy, society, and investors,” says Annie Chen, Founder of RS Group. “Capital investment and behavior change are needed today to ensure we have a chance at survival, before we reach the tipping point and lose any possibility of a ‘tomorrow’. Through supporting the Window, we aim to use our capital to catalyze exponential investment into preserving the ecosystems that sustain our lives, and foster the development of the natural capital space in Asia.”
Blended finance uses catalytic capital, such as grants from private or official sources, to attract commercial capital into products that would traditionally not be considered commercially attractive. By supporting the design of new blended finance solutions targeting natural capital, the Window will draw new investors into this critical, but underfunded development area. The US$3 million window is expected to catalyze an exponential amount of capital from private, public, and philanthropic investors.
“Based on Convergence’s data, Asia has presented itself as the next frontier for blended finance, with 31% of blended finance transactions targeting Asia in 2016-2018,” says Joan Larrea, CEO of Convergence. “This partnership is another example of the rising use of blended finance in the region to support the Global Goals. We are grateful to RS Group for partnering with us to see how blended finance can advance the field of natural capital in such a critical region.”
Knowledge and lessons learned derived from the solutions funded by the Window will also be shared with the wider field, to inform and build the blended finance and natural capital investment ecosystem.
The Window is open to co-funding opportunities. Organizations interested in supporting this window and the design and launch of new blended finance vehicles that aim to catalyze private investment for natural capital are encouraged to contact Convergence at: [email protected]
The Window is currently accepting applications for funding. Practitioners with on the ground presence or partnerships in Asia are encouraged to apply. Apply here.
About Convergence
Convergence is the global network for blended finance. We generate blended finance data, intelligence, and deal flow to increase private sector investment in developing countries. Convergence has an impressive track record of supporting early-stage blended finance solutions that will attract private sector funding at scale and make long-term impact. Now in its fourth year of operation, Convergence’s existing Design Funding Facility, which is funded by the Government of Canada, is delivering strong results. It has awarded over US$6 million in funding to 18 solutions, which have catalyzed over US$400 million in capital for critical development sectors.
About RS Group
RS Group is a mid-sized Hong Kong-based family office. Our mission is to create a paradigm shift in people’s values and priorities so that economic growth will support, instead of jeopardize, human development and environmental sustainability. In the face of pressing challenges presented by climate change, we feel even greater urgency to put our capital into protecting “the commons”, and to foster multi-sector collaboration focused on addressing issues relating to climate and the environment in HK and Asia.
Our portfolio of investments and philanthropic activities are managed with a “Total Portfolio Management” approach, and our value creation is measured on a “blended value” basis across the portfolio. A report summarizing our mission, history, investment and philanthropic activities can be downloaded here.
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