For over 5 years we’ve been striving for more green in cities. This year we see it really picking up. Bottom-up initiatives have traction; more and more corporates and investors are looking for ways to adapt more green; green companies look for innovative ways to meet changing market demands.
From municipalities however we would like to see some more action. Despite some individual innovators within the municipalities, the overall picture is that many green departments stick to old school habits.
Scientific research and publications show more and more evidence of the values of green. The biggest challenge we see — and what has been our focus — is to turn these values of green into working business models that tap into the cash flows of validated green values. We know green has effect on real estate values, on the health of people, higher expenditure in retail, productivity etc.. But how do we get real estate investors to pay for green? How can health insurance companies invest in healthy green environments?
For the next year (or years) we will keep our eyes on this ball. I would like to share some inspiring thoughts and experiments:
With our green tech lab TreeCollective we create experiments to find new business models that should ultimately lead to trees going from cost to benefit.
One of the experiments we are exploring is tokenizing trees. Tokenizing is rapidly going from underground to upper ground as cryptocurrency and NFT’s are increasing rapidly.
However the possibilities and risks with green tokens are not well-known. Tokenizing can be a means to enable distributed ownership (for example, a crowd of people that want to buy and maintain trees) and find new ways of funding (people who want to invest in green via tokens). But it also raises questions about ownership. Shouldn’t trees be a common?
Together with tech pioneers, experts, investors-entrepreneurs we are exploring the possibilities (if you want to join, let us know!) and aim to launch the first project in 2022.
Tokenizing green — examples in the world:
Trees become commons: https://terra0.org/ (a classic!)
The Stock Exchange of Nature: https://www.single.earth/
A climate positive blockchain: with the Cardano Forest: https://ito.veritree.com/
Community Ownership’ to fight deforestation: https://reasonstobecheerful.world/community-forest-ownership-prevent-deforestation/
Distributed finance for urban green projects
In our LinkedIn post of October, we asked our community for thoughts and cases to solve the situation wherein profit owners are not the ones who pay the bill, for instance: real estate owners who profit from a higher real estate value without contributing to the costs.
Our take-out from the responses:
1/ In case of a new development: make a deal with real estate investors to contribute to the green infrastructure. This should be unconditional (then it also creates a level playing when in competition).
2/ In case of adding green to an existing area: start talks with owners and stakeholders in the direct environment with the aim to have more stakeholders finance the green infrastructure, in line with their benefits. In due time this can lead to norms (but you’ll have to find the broadband of the norms with the market) and regulations. A starting point can be to calculate a total or joint business case for the entire area.
3/ Around the globe you can find some examples, but they seem rather scarce. Suggestions were a BID (Business Improvement District, UK), the High Line in NYC, and Union Square Partnership in NYC.
4/ Pricing models of green should be changed: look at benefits rather than costs to create a level playing field in the trade-off between green and grey (for grey we have models that calculate the upside, for green we don’t).
5/ In 2022 we will launch two experiments: finding new financial instruments to transform business parks from grey to green*; the second is financing trees with tokens**. To be continued..
6/ We are looking for a municipality that is prepared to start a research project to find solutions for having real estate investors pay for urban green.
Business model experiments
To give more room to our business model experiments, we’ve created a new website for our green tech lab TreeCollective: check treecollective.nl (in Dutch).
If you want to contribute or put a business case forward, bring it on!
Author: Mark Bode, Business Design Agency, firstname.lastname@example.org, november 2021
- For the Province of South Holland, together with our partners of IVN (nature education), we are about to launch a temporary studio to find and develop financial instruments that enable the transition of grey business parks into green and sustainable ‘working landscapes of the future’.
- **At the Floating Farm we are collecting data to show the influence of green on a better living environment for cows (ultimately resulting in higher milk production). The insights will be used to find funding to plant more trees at the Floating Farm. You can follow this project on TreeCollective.