December 14, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Climate Asset Management (CAM) was formed in 2020 as a joint venture between HSBC Asset Management and climate change and advisory firm Pollination with the intention of being the largest natural capital manager in the world, and the first large-scale venture to mainstream natural capital as an asset class. 

At the time, GAI News had the privilege to speak with Martijn Wilder, co-founding partner of Pollination, to learn more about the venture.

“We actually came up with the idea at the start of COVID-19, and we negotiated the entire process on Zoom,” explained Wilder. “So what would normally take a long time, we’ve done in record time, over nine-to-ten weeks.”

“It was a pretty remarkable effort,” continued Wilder, “and it speaks to the strength of the partnership. And what we’ve found with COVID, there’s challenges to the global economy, and I think one of the important lessons that we’ve been finding is that institutional investors, and others, have turned their minds to making things more sustainable, and the realization that what we do needs to be done in a much more sustainable way.”

GAI News was told that the venture was created with HSBC as a cornerstone investor and with the intent of attracting large-scale investment into natural capital assets from sovereign wealth funds, pension funds, institutional investors, and insurers.

Since that conversation, a lot has occurred. The growing awareness of sustainable investing reflects an increasing need that has been demonstrated by the ever-greater capital being committed to the space.

CAM announced that capital commitments of more than $650 million have been raised from a geographically diverse range of financial institutions from Europe, the U.S., Asia-Pacific, and the UK for two of its Natural Capital Strategies. 

For these investors, CAM aims to deliver attractive, long-term risk return outcomes while also creating impact at scale by protecting and restoring critical biodiversity via:

The Natural Capital Strategy (NCS): a vehicle created to deliver long-term financial returns alongside environmental outcomes from regenerative management in agriculture, forestry, and environmental assets. 

To deploy committed capital, NCS has built a pipeline of natural capital investment opportunities beginning with an initial investment in a land development project in Extremadura, Spain. This project intends to transition 400 hectares of historically flood-irrigated farmland to regenerative high-value almond production, with specific areas allocated to biodiversity enhancement.

The Nature Based Carbon Strategy (NBCS): a platform to advance landscape restoration in developing economies with the intent to deliver biodiversity-centric improvements at scale for climate resilience, community benefits, and the generation of high-value carbon credits that will enable global corporations to reach their decarbonization targets. 

NBCS will finance nature-based carbon projects in their early stages of development while ensuring benefit flows to local communities. Its first such investment is in the Restore Africa Programme. Led by the Global EverGreening Alliance, this program aims to restore merely 2 million hectares of land and support 1.5 smallholder farming families across  Kenya, Ethiopia, Malawi, Tanzania, Uganda, and Zambia. In less than 12 months after the collaboration between CAM and Global EverGreening Alliance was first announced at COP26, the program has already progressed to implementation in Uganda, Kenya, and Malawi – reflecting evidence of mounting momentum.

These two strategies carry particular relevance to today’s investor looking for net zero/carbon neutral targets, noted CAM, given the recent inclusion of nature-based solutions in the cover text at COP27 for the first time, and discussions surrounding biodiversity and biodiversity credits at COP15.

“We are delighted to have secured these commitments from a diverse global institutional investor-base for our Natural Capital and Nature Based Carbon strategies,” said Christof Kutscher, CEO, Climate Asset Management.

“Both investment strategies are grounded in nature-based assets and we find they are increasingly attractive to forward-thinking organizations that are themselves committed to the transition to net zero. The commitments will help us to support bold and scalable nature-based investment solutions as we strive to secure a more climate-resilient, nature-positive and inclusive world.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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