Advancing Conservation and Reconciliation through Outcomes-Based Finance

In brief

• Outcomes-based finance can mobilize funds to advance conservation and Indigenous reconciliation in Canada.
• Pairing Indigenous leadership with OBF creates ethical, sustainable solutions for social and environmental priorities.
• Our report outlines 10 key actions to challenge the status quo and drive measurable impact through innovative finance models.

Ten key ways outcomes-based finance could further Indigenous reconciliation

Outcomes-based finance (OBF) mechanisms can mobilize public and private funds to help progress social and environmental priorities. Here in Canada, that holds significant potential for furthering reconciliation with Indigenous Peoples.

To deliver on that promise, we must challenge the status quo and bring Indigenous worldviews to the forefront. That shift requires us all to take bold steps, embrace innovative approaches, cultivate trust and ensure Indigenous Peoples have ownership over outcomes.

What is OBF and how can it advance Canadian priorities?

Also known as “pay for success” models, these financial tools link returns to specific outcomes. For example, after achieving predetermined targets, outcome payers — like public agencies, foundations and companies that benefit from social or green infrastructure — compensate bondholders.

While OBF mechanisms are particularly effective for delivering verifiable results within defined timeframes, there are important considerations regarding their application. OBFs’ emphasis on quantifiable, defined-term metrics has led some to question whether these models can fully capture the full impact of capital deployment for ecological, economic and social outcomes. Additionally, increased scrutiny around greenwashing and the consolidation of nonfinancial assurance methodologies and standards have narrowed the scope of OBF instruments.

To address these challenges and effectively apply OBF approaches in supporting Indigenous reconciliation, it’s essential to foster authentic relationships within ethical space and prioritize Indigenous leadership. It requires a willingness to reexamine established approaches to program design, capital deployment and outcome validation. Doing so can help advance sustainable, positive change.

Together with the Carolinian Canada Coalition and the Ivey Sustainable Finance Lab, our research explores OBF’s potential to further both conservation and reconciliation in Canada and beyond. Drawing on this work, we’ve identified 10 key actions that reflect our collective learning and commitment to progress.

Meaningful advancement will require collaboration and shared responsibility. With that in mind, explore our findings and consider: how can your organization get involved?