The Livelihoods Fund is an investment Fund, not a foundation. As such it provides its investors with a return, albeit not a financial return per se, under the form of high quality carbon offsets. The Fund invests in three families of projects during an investment period of 3 to 4 years, and then co-manages the projects with its local partners over a period of up to 20 years. The three families of project should each represent at closing of the investment period around one third of invested amounts:
When a promising and experienced NGO or local entrepreneur is selected, after a rigorous due diligence process, the Fund provides its local partners with technical and financial support to implement high scale, high impact undertakings. The Fund generally invests after a pilot project has proven both the local partner’s capabilities and potential and the project’s up-scalability. At that stage a larger and inclusive project is designed, in close cooperation between the Fund, the local partner and local communities. All project costs and investments are covered by the Fund which is delivered in exchange high quality carbon offsets as they are generated and which are passed-onto the investors as a return. Importantly, all local benefits (flood protection, crop, timber, fish etc…) induced by the projects are the exclusive and unchallenged property of local communities.
What kind of return exactly for the local communities?
Livelihoods Fund agrees to finance and support NGOs that have proven their ability to conduct large-scale projects. All Livelihoods Projects are designed, in close cooperation between the Fund, the local partner (NGO) and Local Communities.
Livelihoods Fund does not own land, does not appropriate the trees. The Fund participates only help and support of project in both financing the conduct of the project, in the valuation of it for better and greater revenues for local people.
Populations are owners and beneficiaries of immediate returns of projects. Their ecosystem of life is renewed and can produce for some wood, fruits, crops, for other fish, crabs, oysters, honey, etc... All these products belong to people who can use it as they wish: to eat directly or sell them by organizing themselves into small cooperatives. Small organizations that Livelihoods Fund can also support and help organize with the local NGO leading the project.
What kind of return exactly for the investors?
Projects supported by the Fund generate a wide spectrum of benefits focused on local livelihood enhancement. The primary target is to put a degraded ecosystem back on track and make it functional and productive for local communities. This target is always complied with under the constraint that the project activities must result in significant quantities of CO2 being sequestered by the ecosystem the partners are working on.
This sequestration of CO2 is controlled and verified against third party carbon offset standards such as UN’s Clean Development Mechanism, the Verified Carbon Standard or the Gold Standard. The Fund’s carbon offsets have an outstanding quality for they do not only contribute to the fight against climate change, but also to poverty reduction and environment protection. Upon delivery of the Livelihoods carbon offsets as a return for their investment, investors are free to use them for their own offsetting strategy or to sell them on the market.
Beyond the mere carbon return, there is also a wealth of takeaways for corporate investors. Offsetting is not just a window on one’s CSR strategy. When carried on with an approach such that of the Livelihoods Fund, it also helps structure the very social and environmental strategy, creates goodwill with staff as well as customers, and may generate genuine business opportunities. If you wish to know more about carbon economy and carbon offsets, click here.
The livelihoods Fund in Figures and quick Facts:
- Operational since December 2011
- Target size: €30m to €40m – current size: €26.3m
- Number of active projects in portfolio: 5 (two in India, one in Indonesia, one in DRC and one in Senegal) plus one under implementation in Kenya
- Target of restored area*: more than 35,000 hectares
- Target of carbon offset generated*: more than 7 million
- Number of people positively impacted*: more than 300,000
For questions and comments please contact Guillaume Bouculat at gbouculat (at) livelihoods-venture.com.
* Figures for a €30m Fund size.