Financing Conservation in the Carolinian Zone, Part 2: The Long Point Walsingham Forest Conservation Impact Bond

8 min readMay 18, 2021


Grand River Conservation Authority, Carolinian Forest, CC BY-NC-ND 2.0 <>, via Flickr

The Carolinian Canada Conservation Impact Bond (CIB) is an ambitious social finance initiative harnessing a combination of impact investment and philanthropic grants to finance positive landscape renewals and improvements in the Carolinian Zone of Southern Ontario. The two-phase initiative seeks to improve a combined 1,000 acres of habitat in this ecologically significant region of Ontario, protecting the region’s fragile biodiversity and freshwater reserves. 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 two of three, we will describe the Phase II bond — an even more ambitious investment to scale up conservation efforts in southern Ontario.

In our first blog post in the series, we described Phase I of the Carolinian Canada CIB, which got underway in 2020 with the release of the Deshkan Ziibi CIB. The Deshkan Ziibi CIB is a financing initiative that has successfully raised $130,000 in investment capital from VERGE Capital, alongside $300,000 in outcomes payments provided equally from government and corporate partners, to finance the restoration and renewal of 150 acres of land around London, Ontario including the traditional territories of the Chippewas of the Thames First Nation.

Following the success of Phase I’s capital raise, we’re excited to announce the proposed Phase II Long Point Walsingham Forest CIB. Phase II marks a significant expansion of the initiative from Phase I, and will be focused on raising capital to finance the habitat improvement of 250 acres of land in the Long Point Walsingham Forest Priority Place. This habitat renewal initiative will be focused principally on protecting the habitats of the 30 designated Species-at-Risk which call the Carolinian Zone home.

This post will provide background on the next phase of the bond offering as well as outline six key questions and initial responses for consideration by both Carolinian Canada and potential partners. We hope that this will be helpful for other organizations considering or developing similar initiatives, as most of this kind of work is often very black box.

What is the opportunity with the Long Point Walsingham Forest CIB?

Image Source: Long Point Walsingham Forest

The Long Point Walsingham Forest Priority Place is one of 11 regions across Canada that have been designated as a natural priority place by Environment and Climate Change Canada in 2017, and the only federally designated priority place in Ontario. A priority place is defined as being “an area of high biodiversity value that is seen as a distinct place with a common ecological theme by the people who live and work there.”

The region, which spans between Norfolk, Halton, and Niagara in southern Ontario, was selected as a priority place as it contains a high level of biodiversity, significant numbers of species at risk, and a concentration of mobilized and engaged conservation organizations. The unique circumstances of the Long Point Walsingham Forest Priority Place present intriguing possibilities and opportunities for restoration and growth of natural capital.

Like the Phase I Deshkan Ziibi CIB, the Long Point Walsingham Forest CIB will engage with impact investors, local service delivery partners, and outcomes payers to facilitate the renewal of identified habitat within the Carolinian Zone.

How does the Phase II bond differ from the Phase I bond?

While the Phase II Long Point Walsingham Forest CIB resembles the Phase II Deshkan Ziibi bond in principal, there are a number of structural elements about the Phase II CIB which are distinct and are the subject of ongoing research and development from the team at SVX and the initiative’s partners. These elements include:

1. Investors: Whereas the Phase I CIB’s impact capital raise was financed solely by VERGE Capital, we presently anticipate that the Phase II CIB will have multiple investors, and is actively exploring including opportunities to engage with retail investors.

2. Outcomes Payers: The Phase I CIB had a single outcomes payer (3M). It is possible that the Phase II CIB will be backed by multiple outcomes payers.

3. Investment Scale: While the Phase I CIB sought to raise $130,000 in investment capital, the Phase II CIB is seeking to raise $410,000, a substantially larger capital raise.

Matt MacGillivray from Toronto, Canada, CC BY 2.0 <>, via Wikimedia Commons

Six Key Questions

Considering the goal of scaling the Phase II bond from the Phase I bond, the Board of Directors and management of Carolinian Canada, as well as partners on the Conservation Impact Bond (CIB) will need to consider the following questions and related decisions to appropriately fulfill and manage their fiduciary responsibilities:

  1. Development Process: What process should be followed to develop the Phase II bond?
  2. Agreements: What legal agreements will need to be in place for the conservation impact bond, particularly agreements beyond traditional investment documentation?
  3. Investment Structure and Exemptions: What investment structure(s) can be used to facilitate the investment? What securities exemption will be used to offer the investment opportunity to investors? Who will be eligible to invest in this opportunity?
  4. Financial Model and Return: What is the potential financial return of the investment, and the underlying financial model?
  5. Impact management: How can Carolinian Canada manage and integrate impact into the offering?
  6. Summary: What are the basic terms of the offering?

Although some answers to these questions will emerge from our Conservation Finance Showcase and Design Session, some parameters of the CIB have been set, starting with the development process.

What is the development process for the Phase II bond?

The development of a CIB is different from a traditional bond offering given the range of partners and type of investment opportunity. But fortunately, there are standard community development processes for impact investment offerings that can be utilized for the development and launch of the CIB. The standard community development process will take place in four stages:

It is important to note that both the structure and agreements developed for these types of investments are really completed at the end of the process, informed by the feedback from partners as well as prospective outcome payers and investors. Engagement with potential investors is recommended early in the process, with the understanding that the final investment terms are dependent on outcomes funding arrangements.

SVX is excited to participate in Phase II as a specialized social finance intermediary assisting Carolinian Canada and its community partners in structuring the Long Point Walsingham Forest CIB as a financing instrument. This work is underway presently, and SVX is exploring a range of structuring options to ensure that the CIB attracts a variety of investors in a cost-efficient manner.

How will the bond be structured?

Carolinian Canada, as a Canadian Registered Charity, added bylaws to allow for borrowing in the Phase I bond. For Phase 2, we intend to pool multiple investors and the optimal structure and exemptions utilized will be dependent on the needs of the ultimate investors and outcomes payers. The following models present potential options for structuring the Phase II CIB in order to allow for the pooling of multiple investors:

1. Carolinian Canada could leverage the non-profit exemption for issuers as outlined in securities regulations of the Ontario Securities Commission, which provides a pathway for Carolinian Canada as a charity/nonprofit to raise capital from the general public and accredited investors without a prospectus. This would maximize the range of investors that could finance the bond, albeit with a likely focus on accredited investors as the main source of capital. The risk-return model used may help determine which exemption should be used, and therefore the investor profile;

2. Carolinian Canada could utilize a Trust model, where investors would invest in units of the Trust, supported by a Declaration of Trust document, and an assigned Trustee. This model is utilized by the VERGE Breakthrough Fund, providing a low-cost solution that could be replicated by Carolinian Canada. Under this model, the accredited investor exemption or the private issuer exemption can be used. In the latter case, the number of investors would be limited to 50.

3. The Carolinian Canada Conservation Impact Bond (CIB) could also leverage a Limited Partnership structure depending on the nature of the agreement with the outcome payers and the costs for set-up and operations, as an alternative to using the Trust structure.

In each option, the Phase II CIB would be employing a securities exemption under the Ontario Securities Act. Generally, securities offered to the public in Ontario must be issued with a prospectus, but there are exceptions referred to as prospectus exemptions. The most common exemption is the accredited investor exemption, which allows issuers to raise capital from wealthy investors and institutions without filing a prospectus. Utilizing securities exemptions such as the accredited investor exemption is a common practice for social finance securities being issued in the exempt market.

In order to ensure that the initiative’s service delivery partners are successful in achieving the initiative’s outcomes goals, independent evaluators and third-party verification will be employed to assess whether outcomes are met. Evaluators are guided by predetermined standards and systems, including internationally accepted business standards. The team has worked closely with First Nations partners, Ivey Business School, Landowners and other partners to establish a robust impact measurement framework. A subset of these impact metrics will be identified as those to be tracked and audited by a third-party evaluator for the purpose of determining if the Outcome Payer contracts are to be paid.

Through the CIB, partners can access proven ecosystem services to address UN Sustainable Development Goals (SDGs) such as healthy water, wildlife, climate resilience, reduced weather risk, human health and connection and nature-based climate solutions.

Who are the partners in the Phase II bond?

The Carolinian CIB relies on leveraging partnerships with Canada’s largest ecosystem recovery network of partners and landowners to equitably scale-up high-quality habitat projects using a standards-based approach to achieve the initiatives habitat renewal objectives. These partners include First Nations, Habitat Growers, Impact Investors, Outcome Payers and Evaluators, as shown in the diagram below:

Figure source: Carolinian Canada

What’s next?

On Thursday, May 27th from 9:30 am to 11 am, Carolinian Canada, VERGE Capital, and SVX will be holding a virtual Conservation Finance Showcase. The session will feature an overview of conservation finance and the conservation impact bond concept and provide an in-depth overview of live case study in Canada, including the successful pilot and the design for the Phase II bond.

If you are interested in learning more about this innovative financing tool for conservation and providing input for the design of the Phase II bond, RSVP here!

In the third and final part of this blog series, we will report back on the outcomes of the Conservation Finance Showcase and our learnings from the session. Stay tuned!

Disclaimer: This Medium post is for informational purposes only. It is not intended as investment advice, or an offer or solicitation for the purchase or sale of any financial instrument. SVX is registered as an Exempt Market Dealer (EMD) under applicable securities legislation in Ontario, Quebec, Alberta, British Columbia, Manitoba, and Saskatchewan; however, no securities regulatory authority has approved or expressed an opinion about the securities offered on this platform. Investing in the exempt market has significant risk. You should be aware of these risks, and as appropriate, consult with appropriate financial professionals to support your decision-making processes.




SVX is a financial services firm & impact investing platform connecting ventures, funds, and investors to catalyze investment capital for impact. #ImpInv#SocEnt