Can Financialization Save Nature? The Case of Endangered Species*

Abstract

The current biodiversity loss is dramatic. Over the past 50 years, more than 68% of the mammals, birds, amphibians, reptiles, and fish on Earth have disappeared, putting the planet's survival and its inhabitants—including human beings—at risk. Financialization, or the transformation of nature into financial assets, is increasingly proposed as a solution to the biodiversity crisis. Proponents of financialization believe that assigning a monetary value to nature will incentivize human beings to protect habitats and their species. This article offers a four‐mechanism model of nature's financialization, explaining why it is virtually impossible to financialize nature. We collected data through a unique two‐stage data collection process, including a single case study and additional interviews with conservationists and conservation finance specialists. We analyzed the development of a calculative device, the “Index,” designed to assess the impact of conservation efforts on the survival of endangered species. Conservationists hoped to use the Index to calculate the financial return of a conservation impact bond, a financial instrument designed to finance conservation projects. However, they did not achieve their goal. We discuss the implications for the financialization and conservation literature and the role of accounting therein. We notably question previous accounts of financialization, including the need for financial numbers or financial actors. We ultimately show that a financialization project can transform practices toward financialization, even if the financialization process is not complete.

Partnering for Grand Challenges: A Review of Organizational Design Considerations in Public–Private Collaborations

“…For example, the Conservation Impact Bond (CIB) launched in Ontario, Canada, in 2021 to attract new investment into sustainable practices and for reconciliation in regions that are home to indigenous populations. The project was supported by the Canadian government and developed via a network of actors including indigenous communities, farmers, nonprofits, and impact investors-with clear outcome metrics identified to guide performance-based payments (Arjaliès & Gibassier, 2022).…”

The Time is Ripe: New Financial Tools for the City of Toronto’s Parkland Dedication Rate

“…Financialization is defined as processes that involve introducing a financial rationale into fields previously outside the economic sphere. (Arjaliès & Gibassier, 2022) In their article exploring a conservation organization's attempt at issuing a conservation impact bond (CIB), Arjaliès and Gibassier unpack the distinction between financialization processes and projects. The former refers to the implementation of financialization project while the latter refers to the individual or collaborative enterprise planned and undertaken to achieve financialization.…”

The uncomfortable relationship between business and biodiversity: Advancing research on business strategies for biodiversity protection

“…Scholars in such diverse fields as business and management (Gibassier et al, 2019; Reade et al, 2015; Whiteman et al, 2013; Winn & Pogutz, 2013), conservation biology (Klein et al, 2008), ecology (Rose, 2000), ecological economics (Houdet et al, 2012), political science (Smith et al, 2019), development studies (Visseren‐Hamakers et al, 2012), and international affairs (Rubino, 2000) have articulated the critical role of business in protecting biodiversity. A number of studies (e.g., Boiral et al, 2018; Opdam & Steingrover, 2018) have provided descriptive analyses of biodiversity protection initiatives taken by individual companies; other studies have elucidated advances in biodiversity accounting and corporate biodiversity disclosures (e.g., Atkins & Maroun, 2018; Boiral, 2016; Gibassier & Arjaliès, 2019; Houdet et al, 2020; Schaltegger et al, 2013).…”

“…have provided descriptive analyses of biodiversity protection initiatives taken by individual companies; other studies have elucidated advances in biodiversity accounting and corporate biodiversity disclosures (e.g., Atkins & Maroun, 2018;Boiral, 2016;Gibassier & Arjaliès, 2019;Houdet et al, 2020;Schaltegger et al, 2013). This growing academic interest in understanding and enhancing corporate engagement in protecting biodiversity is indeed encouraging, but it has not expanded beyond a very small subset of corporate sustainability scholars.…”