1. Connecting Markets to conservation
LESTARI CAPITAL
Connecting Markets to conservation

2. Team Lestari Capital Impact Enterprise with conservation roots
Forest Carbon (joint venture):
10 years in SE Asia providing technical forest conservation and restoration project services
Boots on the ground in South Sumatra with 22,000 ha peatland restoration project
Daemeter (joint venture):
15 years providing sustainability solutions for corporates, institutions and policy makers
Strong business development connections bring in demand from commodity supply chain actors in Southeast Asia
Inclusion of Capital Partners (financial sector advisers):
Veteran Credit Suisse executives
Connects impact enterprises to capital markets, provides TA

3. Purpose & Vision Founded in Singapore, 2017
Conservation and restoration projects are undercapitalized
Opportunity to generate new demand, deliver efficiency and secure private sector capital in the conservation space
Vision
Build a diverse, internationally certified project partnership portfolio
Develop innovative, systemic demand sources beyond CSR
Provide a concrete, transparent solution for companies to act upon sustainability commitments and certifications
Support an adaptation of market systems, by advocating that companies more fully account for environmental impacts in their area of operations

4. Vision: Sustainable Commodities Conservation Mechanism (SCCM)
Market Demand
Environmental Commitment Financing
Supply
Environmental Asset Project Portfolio
Commodity Growers (RSPO)
Example:
RaCP Compliance
10,000 ha RSPO Compensation
Restoration Project
50,000 ha
Forest Restoration
SCCM
Retailer
Example:
NDPE Commitment Safeguarding:
3,000 ha Forest Restoration in Supply Chain
Peat Rewetting Project
500,000 tCO2/Year
Peat Restoration and Reforestation
Energy Sector Actors
Example:
Insetting Sustainability Commitment:
500,000 tCO2/Year Emission Reduction
Village Forest Project
20,000 ha
Village Forest Protection
Impact Capital
Examples:
& Green
Althelia
Conservation Project
30,000 ha
Ecosystem Protection Concession

5. Proof of Concept: Palm Oil Sector
First mover client in 2018
Proof of concept: Roundtable on Sustainable Palm Oil (RSPO)
Cargill as first client, providing 25 years of financing for a community forest project in the Indonesian Heart of Borneo
Payments linked to RSPO certification compliance
Funding and partnerships
$2m in grants for proof of concept from Partnerships for Forests Incubator (DFID) and Packard foundation
Partnership with Indonesia’s Peatland Restoration Agency (BRG)
Offices now open in Singapore and Jakarta
Team size expanded from 3 to 11 in 2018

6. First Market: RSPO Context
The RSPO Compensation Framework:
The Roundtable on Sustainable Palm Oil’s (RSPO) sustainability certification system now requires members to compensate for past land clearance (HCV) since 2005
Certification schemes hold greater influence, now that a growing number of import markets, including the EU, have passed regulations that require palm oil to be certified sustainable (CSPO) by 2020.
The RSPO currently has over 60 members with liability, spread over 250 non-compliant units.
Requirements in place since 2017, which are actively creating pressures on members to identify and finance suitable conservation projects.

7. Addressing RSPO Company Challenges
For RSPO Members:
Robust, 25-year projects are difficult to identify, especially by growers with little conservation expertise
Likelihood of project failure over 25 years is high, and robust checks prior to implementation are not conducted
Many compensation options are non-standardized
Companies face reputational and market risks when faced with potential project failure
Process of concept note, proposal development, and annual monitoring is costly for companies
The RSPO compensation system (RaCP) is difficult and expensive for growers to navigate

8. Benefits for CONSERVATION Projects
For projects:
SCCM portfolio is open for any project to apply with clear and transparent application guidelines
Field-level due diligence is undertaken on all projects by Lestari
Projects are certified and monitored under international standards (VCS/CCBS/Plan Vivo)
Or, have a roadmap to certification to reach the same level of best practice.
25-year finance is provided to the project, based on performance and delivery of agreed conservation outcomes
Technical support is provided to projects to build capacity
Projects can, and are encouraged to, pursue other avenues of funding

9. SCCM: complimenting RSPO’s Framework
Efficient
Portfolio approach delivers economic and implementing efficiencies
Can engage a whole supply chain across multiple commodities
Supports existing and emerging agro-commodity certification standards
Robust
Professional project selection and due diligence
Agreements are standardized and legally binding, linked to performance
Transparent
Standardizes monitoring, reporting and transparency on project outcomes
Independent and professionally managed financial vehicle
Leverages internationally recognized and audited conservation standards and safeguards

10. SCCM Supporting Frameworks
Governance
Multi-stakeholder governance structure, includes:
Board of Directors (majority independent directors)
Board of Advisors (multi-stakeholder)
Registered in Singapore, with legal and financial frameworks in place
Project pipeline support
Donor support includes parallel funding to build capacity and support certification for partner projects
Safeguards
Environmental and Social Governance Policy (ESGs)
Field-level Project Due Diligence Process
Exit strategies, disaster scenarios and bankruptcy safeguards in place to protect all parties
Annual fiduciary and operational audits start in 2019 by independent agency.

11. Next Steps: Build on Proof of Concept
Scale up market-linked conservation finance
Business Development: Diversification
Build out alternative sources of demand beyond initial proof of concept market (RSPO)
Diversify beyond reliance on industry certification bodies by directly engaging supply chain actors
Establish proof of concept for landscape-level approaches to conservation and restoration (2019 objective)
Projects: Leverage the SPV for blended finance
Impact investors can tap into a proven and certified project pipeline
Grant funds can support certification and capacity building for next group of projects
Link offline SPV infrastructure to Ethereum blockchain

12. Potential Markets: Scaling Access to Conservation
RSPO
(Sustainable Palm Oil)
SCCM for RSPO members
Today
…future markets…
New models for emerging sustainability markets
Other Commodities
Compensation mechanism for other sustainable commodities sectors
SCCM
Project Portfolio
Peer-to-Peer
Leveraging blockchain for consumer participation
No Deforestation Commitments
Backstopping no-deforestation supply chain linked commitments
----- Meeting Notes (10/9/15 09:17) -----
Carbon Fund does all three
Energy Sector
Mechanisms innovated for carbon and ecosystem service management in the energy sector
Landscape Scale Commitments
Scaling up supply chain linked commitments through shared and collective responsibility
(ICAO)
Transport Sector
Mechanism for International Civil Aviation Industry Offsetting

13. Contact us: