Innovation in environmental funding in the UK Overseas Territories

The UKOTs are home to unique landscapes and species, and are at the forefront of the biodiversity and climate crises. Despite being part of the UK and being home to 94% of its endemic species, they receive an extremely low proportion of environmental philanthropic funding – less than 0.1%.

This is why we at EFN, in partnership with John Ellerman Foundation, have been hosting a UKOTs funder learning series across 2024. We hope to raise awareness of the rich diversity of life and habitats in the UKOTs, and radically improve the system of support for the people and environmental organisations working there.

At our latest event in October we heard from two people closely involved in financing vital environmental work in the UKOTs in new ways, in response to a lack of availability of long term, unrestricted funding.

Alizee Zimmermann, Executive Director of the Turks and Caicos Reef Fund: Coral Biobank Project

Sitting around 80 miles north of the Dominican Republic and Haiti in the Caribbean, the Turks and Caicos islands are part of one of the largest reef systems in the world. They host close to 240 miles of barrier reef that is integral to protecting the low-lying islands from increasing and ever stronger storms and hurricanes.

Coral is already under huge pressure as a result of ocean warming, leading to bleaching and eventually death. In 2019, stony coral tissue loss disease arrived in the Turks and Caicos. This devastating disease is now found in 30 countries across the Caribbean Atlantic and has a shocking 60 to 100% colony mortality rate. Since early 2023 some 62% of coral has been lost in the Turks and Caicos Islands.

In an attempt to preserve vulnerable coral species and ultimately the reef protection of the islands, the Turks and Caicos Reef Fund secured a feasibility study grant from John Ellerman Foundation to pilot a small-scale coral biobank. Nearly 200 coral colonies are housed in this lab, preserving some of the most vulnerable reef-building species at-risk of extinction due to climate change and disease in the Atlantic Ocean and the Caribbean. The hope is that the offspring of these colonies can one day be reintroduced into the ocean, if a way of eliminating stony coral tissue death can be found.

Partnering with the tourism & research sectors

Until recently the Reef Fund’s sole source of funding was through donations and philanthropic grants, including the UK Government Darwin local programme. While this is vital support, Alizee needed to look for ways of supplementing this funding with more long-term and self-sustaining sources of finance. This led to the development of the ‘Reef Keeper’s’ programme. Working with hotels in Turks and Caicos, the Reef Keepers’ programme offers guests the option to contribute $2 per night of their stay to support the Reef Fund’s conservation efforts. So far, the programme has already generated over $40,000 from just one hotel, with very low opt-out rates from guests. Given the size of Turks and Caicos’ tourism sector, this is a large potential source of funding.

Alizee also sees a large opportunity to generate sustainable funding via the growing interest and investment in marine coastal research and opportunities for people to get involved in ‘citizen science’. For the last three years she has run an annual research trip on a live-aboard boat – a ‘floating dive hotel.’ 

To get started, she secured funding from several local rum companies to donate money towards the cost of the vessel, and then offered paid places on the boat to avid divers who wanted to learn some basic survey methodology from the researchers on the trip. While the trips don’t make a surplus, it covers the costs conducting vital research.

Beyond this, Alizee has a five-year plan to build a small but state-of-the-art research lab with affordable accommodation (which is very scarce in Turks and Caicos) for visiting researchers and scientists to use. The Reef Fund would apply for the necessary scientific research permissions needed by the visitors (which can take months to secure). And, by doing so, it would help alleviate the problem of parachute science, whereby people collect research and then take it away to analyse, with no benefit to the local area. Instead, valuable knowledge exchange can take place.

However, the Reef Fund has just three employees and a huge proportion of Alizee’s time is spent on fundraising. There are very scarce avenues for longer term unrestricted funding, as is the case for most environmental organisations in the UKOTs. While not every UKOT has a tourism sector to draw on for funding, some initiatives – such as the opportunities to generate income from environmental research – could be replicated and provide a small but steady core income to local organisations. 

_{^{Left photo: Alizee treats stony coral tissue loss disease on Rumpowered research trip, Turks & Caicos Reef Fund, Credit: Patricia Guardiola Slattery. Right: ‘Turtle Reef’ built using 79x 3m reef balls, part of a mitigation site and artificial reef, Turks & Caicos Reef Fund, Credit: Kaja Ewa.}}

Alicia Gibson, Advisory Director of Finance Earth

Alicia shared how Finance Earth has been working with the Blue Belt Programme, the UK Government’s international marine conservation programme. They’ve been supporting environmental organisations in the UKOTs to build capacity to access new sources of diversified sustainable finance. Many local organisations rely solely on relatively short term government and philanthropic grants, which severely limits their ability to develop and implement the long term strategies needed for effective conservation work. 

Long term funding for Marine Protected Areas

Endowment funds are a financing mechanism being used to support the creation of Marine Protected Areas (MPA). Protection of this kind is vital to preserve ocean life but can have negative consequences for islanders who would lose the income generated from fishing licenses and potentially be responsible for the cost of monitoring and enforcement. In 2019 a community trust endowment fund was created in Ascension Island to support the creation of nearly 500,000 square kilometres of protected ocean and generate a source of income to fund community facilities that had been previously supported via fishing license revenues.

The fund was created through a one-off capital donation, providing a long term income stream, mainly through investments in the stock market. Similar approaches are being used in Tristan da Cunha, another UKOT.

Alicia shared how a similar approach is now being trialled in Anguilla in the Atlantic Ocean, through an environmental trust fund. Unlike UKOTs in the Caribbean, it does not have a large tourism industry that could be a source of ongoing funding. The plan is to shift away from conservation being solely funded through UK Government grants, and to funnel diverse sources of income into the environmental trust fund. This could include revenue from entrance fees and fishing licenses collected by the Government of Anguilla, as well as other taxes, UK Government, corporate and philanthropic funding.

Ocean conservation commitments

In Niue, a small island country of about 1500 people, affiliated with New Zealand (not a UKOT), “ocean conservation commitments” are being used to fund the long term protection of its marine national park. These are tradable commitments to fund the long-term protection of specific areas of the marine national park, aiming to engage both local and international buyers.

Each commitment is a share of the funding needed to protect one square kilometre of the marine national park over the next 20 years, calculated to be $250 per commitment. A trust fund with multi stakeholder governance is sourcing buyers for 127,000 tradable ocean conservation commitments, creating a total of up to $31,750,000. The Niue Government has purchased a commitment on behalf of every single resident on the island. 

This approach could work for the UKOTs that have very high quality biodiversity that needs to be protected. It is often hard to secure funding from the corporate sector because payments for ecosystem services models often focus on compensating for the loss of biodiversity due to development, often from a low quality baseline, rather than conserving what is already there. 

What is clear from the discussion was that philanthropic and government funding are vital for UK Overseas Territories to face the severe range of environmental challenges they face. Across all the different territories, people are innovating to create more diverse sources of income. Philanthropic support is vital to provide a stable base for further fundraising, and to give local organisations the best chance of weathering the climate and nature emergency.

If you would like to catch up on the events of this series, you can read our other blog posts and watch the recordings below. This blog was written by Sarah Tulej (Independent) with the input of Sophia Cooke (EFN) and James Goodman (Independent).