Groundbreaking Rhino Bonds Seek to Save Endangered Species

The world’s two remaining northern white rhinoceros are confined to a Kenyan conservancy, protected round-the-clock by armed guards. To help prevent their sister species, the endangered black rhino, from facing a similar fate, conservationists are trialing a radical new approach to fundraising: rhino impact bonds.  

With black rhino numbers plummeting from 65,000 in 1970 to around 5,500 today, the Rhino Impact Investment (RII) Project seeks to mobilize capital to better protect the species from escalating poaching and habitat loss. Its backers hope the first-of-its-kind conservation finance model will draw strong interest from impact investors and prove replicable for other endangered species. Several prominent wildlife charities, led by the Zoological Society of London (ZSL) and the Royal Foundation, incubated the initiative, which is nearing the end of three years of development and testing. The Global Environment Facility and U.K. government are also backing the $50 million bond, which will launch early in 2020.  

“Creative ideas for generating more efficient, more impactful, success-driven conservation finance must be designed, tried and tested: The RII Project is doing just that,” says Giles Davies, founder of Conservation Capital, the consultancy acting as RII’s Finance Manager. “[The rhino impact bond] holds significant potential for creating an exciting new asset class capable of engaging new and more diversified capital markets into the conservation sector.”

How rhino bonds works

ZSL and its partners seek to tap into the rapidly growing green bond market that has grown in its first decade to surpass $100 billion in value. As with other green bonds, the rhino impact model will function as a debt instrument, unlocking investment capital to (hopefully) drive black rhino gains in five key population areas in South Africa and Kenya. Together, these protected areas house 700 beleaguered black rhinos.

Money raised from impact investors will finance on-the-ground management interventions that support rhino conservation and maximize growth rates. Investors will receive back their original investment, plus or minus a percentage based on whether or not conservation key performance indicators such as “net rhino growth” are met.

A part of Tsavo West National Park in Kenya has served as a testing ground for interventions that are expected to provide effective metrics and deliver positive outcomes for rhinos and investors alike. In collaboration with the Kenya Wildlife Service, the RII Project has supported improvements in security, wildlife monitoring, park operations, community engagement and infrastructure — including replacing a water pipeline that supplies half the local rhino population.

Future potential for outcomes-driven fundraising

Dr. Richard Leakey, chairman of the Kenya Wildlife Service Board, sees immense potential in the outcomes-driven fundraising model. “We’ve seen some incredible progress since the start of the RII Project, and the momentum that is gathering will help restore this landscape to the major wildlife area that it was in the 1950s.”

His optimism is shared by Oliver Withers, ZSL’s head of conservation finance and enterprise, who sees the rhino bond as a first step toward mobilizing markets to protect the world’s dwindling biodiversity. “We see this as a shift in the conservation-funding model,” he told Bloomberg. “There is huge scope for this [model] to be used for other species.”

Whether they are proved right will depend in part on the scale of uptake when the bond launches. Given the surge of interest in impact investing among high-net-worth individuals, and the iconic status of rhinos, their bet may well pay off. (Nearly 80 percent of high-net-worth millennials, and 60 percent of Generation Xers own or are considering impact investments). In which case, rhino impact bonds will join other innovative efforts to sustain Africa’s wildlife — and not a moment too soon.

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