Financing Conservation in the Carolinian Zone, Part 1: The Deshkan Ziibi Conservation Impact Bond

7 min readApr 23, 2021


Stretching from Toronto to Windsor, the Carolinian Zone is the most fragile and diverse ecosystem in Canada with the least habitat, for the most biodiversity, with the highest population density in the nation. Extreme weather events and 85 per cent habitat loss create urgency for protecting wildlife, water and a way of life.

Carolinian Canada’s Conservation Impact Bond (CIB) is a place-based and multi-regional initiative to rehabilitate 1,000 hectares of land and to bolster social, environmental and economic benefits in southern Ontario. In this blog series, we are highlighting the Carolinian CIB, the development of its phase two bond, and results from a community design session in May. In part one of three, we will provide context on the issue, as well as background on the Carolinian bond itself.

What is happening in the Carolinian Zone?

The Carolinian Zone is the most biodiverse and threatened ecoregion in Canada. This region is home to one-third of Canada’s species at risk, protects drinking water for 11 million people, and holds a fifth of the world’s freshwater. It has been described as Canada’s most endangered major ecosystem, and many of its flora and fauna are found nowhere else in the nation. This is largely because many southern species are at their northern limits here, and because of the high population density in the area. Twenty five per cent of Canada’s population lives in the Carolinian Zone or its immediate vicinity, yet it covers only 0.25 per cent of Canada’s area. This high population density and development mean most natural habitats have been lost to human uses over the past three centuries.

How can innovative finance respond to this issue?

A growing body of research shows that high quality natural infrastructure can protect wildlife, water, air, soil, community health, recreation and climate resiliency. The added benefit of natural infrastructure is that, unlike traditional infrastructure, it grows in value over time, with demonstrated cost savings for agriculture and other land uses. It provides critical resources for our youth and their future.

The CIB model provides financing for natural infrastructure using a scalable, catalytic social finance mechanism. This model was developed out of a recognition by the conservation community that traditional funding models can’t keep pace with the need for conservation capital. At a time of modest public funding and limited philanthropic dollars, innovative funding and financing strategies are necessary to narrow the gap between the financial resources that are available and the scale of the conservation need.

What is the conservation impact bond (CIB) model?

Conservation Impact Bonds (CIBs) fit broadly within a category of social finance approaches known as outcomes-based financing. Outcomes-based models cover a broad range of funding and structures that involve payment for the achievement of predetermined social or environmental outcomes. In conservation finance, outcome-based models include pay-for-performance, payment-for ecosystem-services, avoided-cost and other models. These models are based on a premise that one or more entities believe there is a tangible, monetary value associated with a service provided by nature and they are willing to pay to ensure nature continues providing this service.

While this type of bond may sound complex, they are being developed to access new sources of capital which may also be able to move faster, such as private investment capital, to make up for the financing gap from government and philanthropic sources.


There are other examples of similar outcomes-based offerings including:

  • DC Water Environmental Impact Bond. In September 2016, the DC Water and Sewer Authority issued a $25M tax exempt EIB, the first of its kind in the United States. Proceeds of the bond will be used to fund green infrastructure projects (rain gardens, permeable pavements, green roofs, rain barrels).
  • The Forest Resilience Bond (FRB). A private partnership between Blue Forest Conservation, Encourage Capital, World Resource Institute and numerous agencies and research partners to finance forest restoration in the western U.S.

Key Players

There are a number of key players in a conservation impact bond, including:

  • Lead Service Providers are typically a leading entity that facilitates the partnerships and management of the bond.
  • Service Delivery Partners / Habitat Growers: Network of partners and landowners to equitably scale-up high-quality habitat projects using standards-based approach to achieve outcomes with significant in-kind match.
  • Outcome payers agree to pay for complete delivery of healthy landscape improvements after outcomes are proven to be achieved. Through the CIB, they can access proven ecosystem services to address UN Sustainable Development Goals (SDG’s) such as healthy water, wildlife, way of life, climate resilience, green jobs, reduced weather risk, human health and connection, nature-based climate solutions.
  • Impact investors provide the up-front capital that is needed to execute and accelerate the landscape improvements and are paid back with interest at the end of the contract period. It should be noted that the investors bear the risk that the habitat work will be completed effectively in order to deliver the outcomes. For this reason, an investor’s due diligence efforts will seek to ensure the organizations performing the habitat work have the capacity and capabilities to achieve the outcomes.
  • Independent evaluators and third party verification assesses whether outcomes are met. Evaluators are guided by predetermined standards and systems, including international business standards.
  • Bond developers, or specialized social finance intermediaries, may be involved to help facilitate the development of the bond.
Ken Lund from Reno, Nevada, USA, CC BY-SA 2.0 <>, via Wikimedia Commons

What is the Carolinian CIB?

The Carolinian CIB model was developed over 15 months through research and consultation with over 300 stakeholders and finance experts. It centers First Nations and other communities in the spirit of the Indigenous tradition of One Dish One Spoon agreements — to share and care for the land, together. The Carolinian CIB is a unique investment offering that combines a financial return for the investors with impacts created by healthy landscape improvements in the Carolinian Zone. Carolinian Canada intends to mobilize $2 million by 2023 to meet its target of restoring 1,000 acres of land in the zone.

The Carolinian CIB will be rolled out in phases, with two pilot phases already underway. The first pilot phase, the Deshkan Ziibi Conservation Impact Bond, was launched in March 2020. It has raised $300,000 in philanthropic funding from 3M and $130,000 in investment capital to restore 150 acres. The second pilot phase, Long Point Walsingham Forest CIB, is in the planning and design stages with the aim of launching in 2021.

How was the Deshkan Ziibi CIB structured?

The Deshkan Ziibi CIB was structured as a loan through the VERGE Breakthrough Fund, as the single investor in the offering. The legally binding loan includes an interest rate and schedule for repayment. It is a simple and common way to structure a debt agreement.

Figure Source: Financing Conservation by Rally Assets and Nature Conservancy of Canada, November 2020.

Who are the partners in this work?

The lead partners in the initial phase of the conservation impact bond have included:

  • Carolinian Canada is a network of leaders growing healthy landscapes for a green future. We bring together 300+ groups and thousands of leaders in grassroots, government, science, community and business for innovative, effective and targeted solutions for complex environmental challenges.
  • VERGE Capital, a program of Pillar Nonprofit Network, is southwestern Ontario’s social finance intermediary that connects caring investors with impactful investments. It mobilizes financial resources to address pressing social and/or environmental needs through its loan funds and shared learning about social finance models.
  • The Chippewas of the Thames First Nation also known as Deshkan Ziibiing, is an Anishinaabe community that has called the watersheds of southwestern Ontario home for millennia. As a governing body, Deshkan Ziibiing has lengthy experience in developing relations with other communities interested in lands and waters within their treaty and traditional territory. Today Deshkan Ziibiing is actively involved in several environmental projects and strives to be a leader in environmental stewardship.
  • Thames Talbot Land Trust (TTLT) is a not-for-profit corporation, dedicated to protecting environmentally significant lands through acquisition, conservation easements, landscape restoration and education. We currently protect and manage more than 1600 acres of land and 30 species-at-risk in our focal area of Middlesex, Elgin, Perth and Oxford Counties.
  • Diane-Laure Arjaliès, PhD, Assistant Professor, Ivey Business School is a specialist of impact assessment and conservation finance. She is a member of the expert network of the United Nations Global Compact and of the academic advisory of the Principles for Responsible Investment. She has just co-written a report for the French Ministry for Economics and Finance on the impact assessment of responsible investing mutual funds. Diane-Laure is teaching the impact assessment and sustainable finance classes at the Ivey Business School.

Other leaders joining the cross-sector collaboration include: Oneida Nation of the Thames, 3M, Pollinator Partnership, Lower Thames Valley Conservation Authority, ALUS Middlesex, and Camp Kee-Mo-Kee.

What’s next?

Following the successful launch of the Deshkan Ziibi pilot bond, the Carolinian CIB is now in the planning stages of the Long Point Walsingham Forest CIB — an even more ambitious investment to scale up conservation efforts and draw in multiple investors. The Long Point Walsingham Forest CIB is expected to raise $500,000 to restore 250 acres in the Norfolk, Halton, and Niagara regions.

If you are interested in learning more about this innovative financing approach, please join us for a Conservation Finance Showcase on Thursday, May 27th from 9:30 to 11 am EDT.

Part Two in this series will dive deeper into the next phase of this innovative initiative, including the development process, community considerations when it comes to scaling, and the bond design. Stay tuned!




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