On sustainability goals
When it comes to combatting climate change, there has long been an emphasis on the energy sector and reducing carbon emissions from fossil fuels. While critically important, Jennifer Morris says that’s not enough.
We could stop using all fossil fuels tomorrow and we would still fall short of the goals set by the Paris Agreement on climate change in 2015, Morris, the CEO of the Nature Conservancy, says in a Goldman Sachs Talks session with Anna Skoglund, a partner at Goldman Sachs who is also a Nature Conservancy board member.
“We have to focus on the transition in agriculture and food production now because food systems are responsible for 30% of global emissions,” Morris says. “Agriculture is driving 80% of deforestation around the world and seventy percent of our global water withdrawals are coming from agriculture.”
At this year’s UN General Assembly (UNGA), global leaders were beginning to discuss changes to agriculture and food production in the climate fight, which Morris said is long overdue.
“In the beginning, we were really focused on energy, energy, energy, which is critically important, as it’s actually about 70%-75% of the problem,” she says.
This focus on the transition to cleaner forms of energy has helped to provide a roadmap for reducing agriculture’s carbon footprint as well. When renewable energy efforts began, even many climate experts thought the transition would never happen. Renewables were seen as too expensive, and they would never compete with cheaper, dirtier fuels like coal.
“Now, here we are 10, 15 years later, and we know that renewable energy in some places is cost competitive if not less than some sources of fossil fuels,” Morris says.
The agriculture sector is now embracing similar initiatives as farmers, ranchers, and food producers worldwide are beginning to understand the need, because it doesn’t just affect the climate, it also affects supply chains and livelihoods. Drought and changing rainfall patterns from a warming climate are affecting crop production and yields globally.
“It’s not just about some green issue, it’s about the resiliency of their own business model,” Morris says. “Companies see that and are stepping up, but there’s still a lot more that needs to happen.”
On working with companies to improve the environment
The Nature Conservancy believes in working with companies to find an economically viable path to reform.
“We work with the cattle sector and push them and actually sit at the table and look them in the eye and say, ‘You have to change, but we’re going to help you change,’” Morris says. “We have to engage with them. We need to work with them practically and find smart solutions.”
Morris’ interest in conservation and climate action dates to her time working and volunteering in Namibia, where she saw firsthand public health problems related to environmental distress. She noted that the changes seen in just one lifetime led to increased challenges, often impacting women and children the most. — From the inability to find water to the need to fetch increasingly scarce firewood, these everyday tasks would pull women, and mostly female children away from a path to formal employment to provide basic needs for their families.
Morris previously spent 23 years with Conservation International and started by working with businesses around the world to get products from small communities into international and domestic markets. This led to work across the globe in innovative finance and scaling conservation solutions and eventually a position as the President of the organization in 2017. She joined the Nature Conservancy in 2019 as CEO
The Nature Conservancy has a bold set of goals that it hopes to reach by 2030. Two in particular are to use the power of nature and the strength of policy and markets to reduce emissions, support renewable energy, and store carbon to reach our goal of avoiding or sequestering 3 billion metric tons of carbon dioxide emissions each year. This is the equivalent of removing about 650 million gasoline-powered cars from the roadways annually. In addition, the organization hopes to preserve 650 million hectares of land — basically an area twice the size of India.
On managing global debt
In addition to twin crises of the climate emergency and biodiversity loss, Morris sees a third crisis affecting the efforts to battle climate change: global debt.
“Most developing countries — over 60% — are either in debt distress or nearing debt distress,” she says. “When we say to the country of Belize, for example… ‘Well, climate crisis is here. You need to be investing in resilience and protecting your farmers and your fishermen,’ they say, ‘Well, we’re spending most of our GDP on just repaying our creditors. So how can we actually do that?’”
The Nature Conservancy has developed Nature Bonds, which, working with underwriters and financial development corporations, it helps convert sovereign debt and uses a portion of the refinancing proceeds to fund conservation.
“We realized that we were able to use the power of the markets, the power of fixed income investing, and actually do this in a meaningful way,” Morris says.
Nature Bonds, is an approach TNC piloted with the Seychelles, and more recently, replicated at a much larger scale in Barbados and Gabon. In total, the program has helped refinance $1.2 billion in sovereign debt and is expected to unlock $400 million USD for conservation.
“These are countries that have raised their hand and said, ’we want to protect 30% — which is a global goal — of our land and ocean by 2030,” Morris says. “But then they said, ‘We don’t have the money.’ And we said, ‘Here is a fantastic opportunity to come up with the money, without increasing your debt burden, or even reducing it.’”
In the case of Belize, which was on the brink of default, the program reduced the country’s debt burden by 11% and improved its credit rating.
“We created a way for investors to have a real impact-driven return for their investment that’s a commercially available market-rate return,” Morris says. “It’s working so well that we’re pushing larger institutions like the World Bank and the [International Monetary Fund] to make sure that they’re lending in a way that promotes sustainability. There’s a real interest in trying to create new instruments that work better for countries that are in debt distress and, quite frankly, climate distress.”
This episode was recorded on June 14, 2023.
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