What is Livelihoods?
Livelihoods is a new type of « hybrid » vehicle, which leverages the carbon finance to deliver long term social value to communities. For Livelihoods, carbon finance is a mean and an opportunity, not an end. Livelihoods want to collect money which is directly invested in community programs to generate long term sustainability. In return, carbon credits are the payment for investors on risky investment with long term, limited return.
Livelihoods focuses on 3 areas:
- restoration of natural ecosystems (mangroves, reforestation, REDD, etc)
- agroforestry, agriculture and grasslands
- rural energy
Today, very little private investment goes to projects centered on livelihoods. Private investors in carbon offset programs prefer large projects in the industry or energy which are less risky and on a shorter term basis. The result is the limitation of financial resources for large scale projects: only philanthropic money or public funding fuel those projects.
A few carbon funds invest in community programs but they do not invest up-front in the projects. To limit their risks, they commit to buy the carbon credits later on, when the trees are grown-up and the carbon credits delivered. This business model does not work for local NGOs which have very limited access to bank loans.
Livelihoods Fund provides upfront investments to the local entrepreneurs and NGOs in order to finance each phase of the project. In Senegal for example, 2.5 million Euros have been invested in 2009 and 2010.
Through this investment, the local NGO Oceanium supports 450 villages to plant 100 million mangrove trees on 7000 Ha. The project will restore biodiversity and provide very significant amount of fish, wood, and other livelihood resources to the communities. With the plantations in 2011, the project will sequestrate globally 900 000 T CO2.
Livelihoods : A shared governance
Principles of governance are described through the charter
The Charter is a fundamental document. It defines the vision, values, principles and guidelines of Livelihood. It is common to all 3 Livelihoods entities, 3 legal entities with clear roles and responsibilities. All organizations (companies, NGOs, support organizations, experts, etc) which are part of Livelihoods Fund, Venture and Network, have to sign and respect the charter
Investment monitoring is based on three entities
Livelihoods Fund which is the financial investment vehicle where investment decisions are made by the Board of the Fund.
Livelihoods Venture which is a services company to identify and monitor the projects.
Livelihoods Network which is a capacity building not-for-profit NGO has no responsibility in the invest of projects for the Fund.
An advisory board for orientation and impact assessment
The Advisory Board supervises the Livelihoods activities of the 3 entities, to look at the alignment with the Livelihoods Charter, to evaluate the projects, to explore and discuss new opportunities.
The Advisory Board is independent regarding investment decisions or operational decisions without any direct responsibility individually or collectively in Livelihoods.
The creation of Livelihoods Fund on the 4th of July was the occasion for a meeting of the Advisory Board attended by :
Jean-Paul Chifflet, CEO of Credit Agricole-SA
Emmanuel Faber, Vice Chairman of the Board and COO
Luc Guyau, Farmer, Chairman of the Orientation Council of FAO
Gary Hirshberg, Founder and CEO of Stonyfield (USA)
Manoj Kumar, CEO of Naandi Foundation (India)
Julia Marton-Lefèvre, General Director of the International Union for Conservation of Nature-IUCN (Switzerland)
Olivier Mushiete, CEO of Novacel (RD Congo);
Christian de Perthuis, Economist, Director of the Climate Economics Chair Paris-Dauphine University (France);
Franck Riboud, Chairman and CEO of Danone (France) ;
Tony Simons, CEO of ICRAF. World Agroforestry Center, (Kenya);
Anada Tiega, General secretary of the Ramsar Convention on wetlands (Switzerland)
Jean-Pascal Tricoire, Chairman CEO of Schneider Electric
Some members of the board expressed their commitment to livelihoods