6 months old: learning so far

In January 2025, we sat on a veranda, above the upper reaches of the Sabie River, and imagined a new way to fund the stewardship of ecosystems that did not rely upon the state, eco-tourism, hunting, or philanthropy, and Sibyllina was born.

Over the first half of this year, our toddler has taken the first steps of its journey through a rather Socratic testing of our idea in conversation with friends and acquaintances in science, business, farming, property, financial services, and ESG advisory (Thanks folks - your insights have been invaluable).

We have learned a few things.

Sibyllina was established to accelerate land stewardship to protect important biodiversity and ecosystems.

To achieve this, more money must be directed towards land stewardship and protection. The challenge is huge. More than 100 countries have committed to protecting 30% of the world’s land and sea mass by 2030.

The world is not on track to reach this target.

Today, we want to share some of our lessons with you all.

Our first lesson was validation of a need. Negative natural impacts are restricting business’ access to funding

Our conversations with finance and industry experts have validated our belief that access to capital, whether for capital expenditures or insurance, is becoming increasingly restricted due to regulatory pressures and the perceived risk for companies as a result of their impacts on nature.

A company's environmental footprint, particularly its carbon and natural capital impacts, now acts as a significant barrier to raising funds and organisations are facing mounting pressure to demonstrate responsibility for these impacts.

While this may not yet be a direct regulatory mandate, it's a consequence of financial markets responding to regulatory trends. For instance, mining companies are finding it increasingly difficult to secure financing for projects or obtain insurance coverage due to environmental concerns, and funders are actively requiring them to present a proactive approach to addressing these issues.

Our second lesson was that there is a mismatch between academic science-based approaches to natural capital and prevailing business practice. Natural capital accounting approaches don’t map easily to established market dynamics that establish prices.

There are enormous barriers to converting current approaches to natural capital accounting into financial metrics understood by the markets today.

Our discussion in the finance and economics spheres show us that there are clear differences to how markets work (largely based on supply and demand) and how natural capital impacts are accounted for at present. Ecosystem service accounting is one approach that was particularly challenging – we find it implausible that a theoretical aggregation of economic contributions of ecosystems will successfully be integrated into business practice. We don’t think this negates the value of the broader economic understanding of ecosystem services – that remains essential work. However there is a clear need for some models that align much more closely to business decision-making frameworks as they are today as part of a plurality of approaches to meet 30by30.

One barrier, for instance, is that using eco-system services accounting across a value chain and recognising balance sheet liability for nature-harm would make most businesses on the planet instantly insolvent. This would present a problem, and probably a barrier to adoption.

Our proposed model of leases in the aggregate providing a clear signal of market value has not been foundationally challenged. The rights attached to right-of-use assets and leases are well understood, transparent and legally enforceable. There is also a flexibility to bilateral agreements between landowners and lessee stewards that is not available through other approaches.

Our third lesson is that there is a real desire to conserve, but the mechanisms for funding are clunky. Landowners care deeply for their land but cannot secure the additional funding to support the stewardship that it demands.

The supply of land with important ecosystems will not be a challenge. Additional income streams that supplement existing activities will incentivise ongoing stewardship of valuable ecosystems.

However, there were several important things to recognise on the supply side: arrangements must be able to be aligned with existing activities on landscapes, the ease of establishing an agreement must be simple and cost effective, and the tenure must be adaptable to the needs of different landowners – we cannot rely only on multi-decade deals.

The first part of our journey has shown us some big things that we still don’t yet know.

Our search for a pilot economic buyer continues.

We have not resolved whether the transfer of natural capital onto the financial balance sheet of an organisation assists it in addressing its fundraising challenges more effectively than philanthropic or certificate purchases, which largely drive reputational gains.

Does it make a difference whether a company can point to a right of use asset on its financial balance sheet, compared to a certificate that it has funded activities?

We also do not yet know the degree of discount between the costs to a business of effective ecosystem stewardship compared to the costs of not taking action, whether access to capital, cost of capital, insurability or litigation liability.

This means our insight into likely market pricing remains immature.

Through our conversations, we’ve also noticed some patterns in the industry.

There is an overwhelming focus on methodology.

Practitioners are hyper-focused on the rightness or wrongness of a particular solution without attending to the ease with which the mechanism can be implemented. The methodology of accounting dominates discussions rather than the outcome of how to get money into landscapes and high-value ecosystems

We’ve also noticed how the prioritisation of ecosystem restoration additionality drives a perverse outcome in which valuable ecosystems that need to be protected are ignored because they already exist or are not under imminent threat.

These land pockets still contribute to 30by30 and just because they are currently secured does not mean there is a guarantee to their protection going forward. Stewardship costs money, and whilst landowners may intend to look after their land in the long-term, shifting financial pressures may undermine this.

Support through simple means such as funds for chemicals and teams for alien invasive removal would make a fundamental difference to landowners

Our view is that having financial markets recognise important ecosystems as having value, and establishing mechanisms to fund their stewardship, is a major step forward and additional in and of itself.

We have also come to the view that we don’t need to price every aspect of an ecosystem to justify conserving it.

Matching demand for ecosystem protection/restoration with its supply is in our view, considerably more important than 100% pricing granularity. That will inevitably shape as markets mature and products become more differentiated. If we fully price negative impacts immediately, businesses will have to report themselves as being insolvent. They will resist doing so. And this undermines implementation of solutions.

Where to next?

As our concept refines through continued engagement, our horizon one priorities are crystallizing.

Our search for an economic buyer remains the most critical first step. Specifically, we want to test the strength of our concept with the accounting and legal teams of potential buyers. Our engagement in advance of a pilot deal is shifting towards the accounting and legal worlds, instead of science and ESG.

What has also become clear is that the platform on which we keep account of natural capital transfers is a critical piece of infrastructure that must be built.

We are exploring options to build a good ledger.

Our horizon two priorities are better pricing, and the establishment of a functional market mechanism with enough of a portfolio to offer choice.

Our horizon three goals are undimmed – scale and speed to bring capital to landowners for the purpose of stewardship, with clear accountability and audit over large ecosystems and many diverse landowners.

- Ross, Rich, and Fi