Public Consultation on the LDN Fund Environmental and Social Standards (ESS)

2 billion hectares of productive land are degraded worldwide while a further 12 million hectares are degraded every year. This has severe consequences for the livelihoods of land users, both at social and environmental levels. Stopping land degradation is critical in mitigating climate change: soil is the second largest carbon sink after the ocean, but degraded land stores much less carbon. Sustainably managed land plays a crucial role in helping the world address other global sustainability issues, e.g. food security, poverty, gender equality, water availability, and biodiversity.

Not enough capital is currently channeled into land-based projects that contribute to sustainable land management (SLM) and/or land restoration, particularly in developing countries. The private sector has a big role to play: public and philanthropic financing is not sufficient to support the amount of SLM and restoration investments required.

For this reason, Decision 3/COP12 mandated the Global Mechanism to assist in the creation of an independent Land Degradation Neutrality (LDN) fund to be made available for the full realization of LDN initiatives. The LDN Fund is being designed as a public private partnership (PPP) for blended finance to be invested in sustainable land management (SLM) and land restoration projects worldwide, within a strict environmental and social safeguard framework.

The LDN Fund Environmental and Social Standards (ESS) define the framework upon which all projects that will be financed by the Fund must adhere to. Once finalized, the ESS will be integrated into all aspects of the LDN Fund’s project investment cycle, and become part of the LDN Fund’s overall risk management and due diligence approach to ensure the responsible handling of social and environmental risk. In particular, the ESS will be integrated into the investment policy of the LDN, and the Fund Manager will have responsibility for conducting a detailed E&S assessment of each project before investment. Other Fund governance bodies will support and regulate the Fund Manager’s work on E&S issues. Committees will be established to have a consultative role on E&S, providing advice and expertise when required. Other Fund governance bodies, responsible for the establishment of the investment guideline (e.g. Board of Directors), will be responsible for the supervision of the Fund Manager to ensure compliance with the ESS, and has the authority to request an investigation from a third party consultant to verify that the Fund is in compliance.

The document has been drafted by Mirova, an affiliate of Natixis Investment Managers dedicated to responsible investing, on the basis of expert advice commissioned by the UNCCD Global Mechanism, and has been reviewed by the LDN Fund Advisory Group.

The consultation process on this document has started on Monday 17 October 2016 and closed on Monday 7 November 2016. 

We would like to sincerely thank everyone who has submitted their input and feedback.

Best regards,

LDN Fund Project Team