Patient capital and no net loss: Applying institutional theory to understand publicly‐owned mitigation banking in an urban context at a United States port

As urban areas grow, ecosystem extent and condition continue to decline. Some countries have adopted “no net loss” policies that require compensatory actions for unavoidable ecosystem losses. In the US, mitigation banking has emerged as a means of offsetting losses, but the system remains dominated by private commercial banks and mitigation outside of an urban context. With this in mind, we seek to understand the institutional drivers of innovative finance for urban mitigation projects at the public agency level. Applying institutional logics and institutional isomorphisms as theoretical foundations, we conducted a qualitative case study of innovative finance for habitat restoration at the Port of Seattle, a public port in Seattle, Washington (USA). Findings from interviews, focus groups, and document analysis suggest that hybrid institutional logics, unique organizational characteristics, and coercive and normative isomorphisms drive organizational change in this context, but significant barriers exist to establishing similar systems in the US.