This post is part of the capital markets open letter project by MBA students at Presidio Graduate School.
By Crystal Arvigo, Miranda Leonard, and Lara Perlof
Mary Anne Rodgers, General Counsel
Susan Phinney Silver, Program Related Investment Officer
Dear Ms. Rodgers and Ms. Silver,
We are MBA students studying the interconnections of sustainability and business at the Presidio Graduate School. As part of our curriculum, we are developing a capital markets mechanism to monetize ecosystem services that would incentivize communities to preserve and/or rehabilitate vital local ecosystems, such as watersheds. This is a letter of inquiry to engage the Packard Foundation (the Foundation) as an investor in a proof of concept pilot project for the above model.
As you may know, healthy watersheds are critical to supporting various functions within a community. In 2004, the United Nations Millennium Ecosystem Assessment defined watershed functions in the following four categories:
While precedents have been established by municipalities receiving infrastructure-related benefits from ecosystem services (New York City, City of Arcata, Sonoma County), there has yet been no organized investment model that would enable such a mechanism to be scaled and replicated. Proving this concept as a successful model would enable investor money to flow to local communities while providing a means of preserving local ecosystems. By investing in this pilot program, the Foundation would create a precedent for the future scalability of the model. If the model proves successful, the Foundation would receive a return on its investment.
We would very much appreciate your feedback on this proposal. Upon concept acceptance by your organization, we would coordinate with an applicable nonprofit, like Earth Island Institute to identify a municipality to participate, as well as determine the amount of financing that would be needed to secure the land. At this stage, a formal proposal would be submitted to you outlining project details, including project cost and estimated return on investment. Thank you for your time and consideration.
Crystal Arvigo, Miranda Leonard, and Lara Perlof