Erica Allis United Nations Environment Programme Eleventh Caribbean Conference on Sustainable Tourism Development May 9 th -13 th St. Michael, Barbados Opportunities for Sustainable Investment and Financing in Tourism: The SIFT Network

How investment is often done 2 So they build this People want this

Two Faces of Tourism When well managed, can be very, very, good Profitability, local jobs, foreign exchange, infrastructure development, and cultural exchange. Natural and cultural attractions enhanced. Sustained return on investment. When mismanaged it can be horrid! Local poverty, pollution, declining destination. Natural and cultural attractions damaged. ROI declines in the long-term. 3

Sustainability and investment applies to all forms of tourism, at all scales, everywhere. means that natural and cultural resources, the fabric of society, and the generation of wealth can continue indefinitely. Sustainability Impacts of investment and finance decline steadily over-time Destinations may ultimately no longer attract targeted consumers. Unsustainable

Tourism is a key sector for the shift to a Green Economy >5% of GDP of all countries 2-12% in Advanced Diversified Economies up to 40% in Small Island Economies and Developing Economies (UNCTAD, 2010) GDP Contribution 33% of global “trade in services” Virtually all LDCs are tourism net exporters Unusual in trade in services - the consumer comes to the supplier (WTO, 2010) Trade Caribbean tourism was 22% of total investment for the region (WTTC, 2009) Investment 5

Why most tourism investment is not sustainable Short-term investment does not look at financial impact of unsustainable practices. Short-term vision Investors and developers are unclear about the return on investment (ROI) from sustainable tourism. Business case Lack of policy framework to provide incentives. Lack of incentives The Sustainable Investment and Finance in Tourism (SIFT) Network is intended to resolve these problems

Investment and finance challenges on sustainability Public Sector Private Sector Lack of awareness and capacity Integrating sustainability as a relevant factor for tourism investors Difficulties in integrating environmental, social, and governance issues Delivering projects and investments on smaller scales Challenges in driving innovationDemonstrating of positive influence of sustainability on tourism ROI Lack of policies and guidelinesLack of transparency in claimed sustainable development Lack of informationAvailability, knowledge, and acceptance of standard criteria or guidelines Fragmentation of the tourism industryDevelopers lack incentives to adopt sustainable criteria Lack of inter-donor coordinationInvestment focus on established companies, developers, and providers

The Sustainable Investment and Finance in Tourism (SIFT) Network To become the leading creator and facilitator of investments in sustainable tourism development Vision

Sustainable Investment and Finance in Tourism (SIFT) Network SIFT aims to become the leading creator and facilitator of investments in sustainable tourism development. Investment Tourism investment can be an effective tool for  generating sustainable economic returns,  conserving natural areas and its biodiversity,  creating employment opportunities for local communities. Impact

What is SIFT? A network to enable investors, financiers, and destinations to share knowledge and encourage investments in tourism development that is financially, environmentally, and socially sustainable.

What will SIFT do? Match sustainable projects in developing countries with existing funds. Pilot projects Facilitate sustainable investments Benchmarking environmental and social impacts of investment Voluntary initiatives to screen investments for sustainability Practical research, training, publications Business opportunity forums, joint venture workshops Facilitate sustainable investments Tools to mainstream Sustainability Disseminate information

SIFT Stakeholders Information on opportunities for sustainable investment and finance. Capacity building for sustainable investment policy. Securing investment for sustainable destinations. Governments Platform to engage like-minded organizations and countries in joint project activities. Learning network – dissemination of best practices and lessons learned. NGOs Strengthening living cultures and conserving biodiversity. Increase local jobs and local revenues. Poverty alleviation. Local communities

SIFT Stakeholders Tools for screening projects for sustainability before financing Platform to enable development organizations to identify and support projects that maintain natural and cultural capital. Multilateral financial institutions Performance benchmarking, including social and environmental cost and benefits Environmental and social management planning Identifying existing sources of sustainable financing Private sector companies Benchmarking financial returns on investment The business case for financing sustainable projects Identifying sustainable destinations and projects Private investors & banks

SIFT Network Planned three steps: Step 1 Bring institutions together Step 2 Select common standards Step 3 Match investors with investment

Roadmap for SIFT Investment tool to pilot phase Scorecard to be adapted and tested Database of finance and investment organizations and companies Concept paper & business plan ( ) Public launch & formal establishment Bring in private sector banks and investors Staffing Fundraising Launch (2010) Housed in UNEP for months, Aligned with GSTC as part of the Partnership Establishing platform to profile tools, lessons learned Functioning network for information exchange Pilot projects Incubation ( ) TSC can be used to identify sustainable enterprises and products Capacity building & promoting sustainability standards Research & tools development Expanding and maintaining connections between financial institutions, governments, developers and tourism operators Operations ( )

$$ Projects Local knowledge Specialized knowledge Private sector buy-in Criteria and standards Policies Projects Products Informed consumers SIFT and the Global Sustainable Tourism Partnership Global Partnership for Sustainable Tourism Tourism Sustainability Council (TSC) Sustainable Investment and Finance in Tourism (SIFT) Network Regional Networks United Nations agencies and programs

First tools for SIFT UNEP-WWF Investment Tool Destination scale Calculates social and environmental return on investment (ROI) Benchmarks individual enterprises and destinations Global Sustainable Tourism Criteria (GSTC) Enterprise scale (hotels and tour operators) Unites all existing sustainable tourism criteria Widely accepted and adopted by governments & financial institutions worldwide since 2008 Framework for SIFT investment criteria IDB Tourism Sustainability Scorecard Based on the GSTC Project scale Central tool for financial institutions to screen projects To be adapted for use worldwide by other financial institutions

UNEP-WWF investment tool

UNEP-WWF Investment tool Final stages of development Looking for countries/destinations to pilot the model

Thank you! Erica Allis 23