February 17, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

In 2020, His Royal Highness, The Prince of Wales, commented, “Building a sustainable future is, in fact, the growth story of our time…”

As part of this narrative, nature-based investing is still finding its feet, but growing awareness of the increasing need is being demonstrated by the ever-greater capital being committed to the space.

The challenge, however, continues to be how to realize return through impact. And as institutional investors take varying approaches, three friends and veterans in the sustainable agriculture, forestry, and carbon finance spaces have joined forces to launch The Shared Wood Company (SWC).

Laurent Valiergue, Juan Carlos Gonzalez Aybar, and Clément Chenost are the driving force behind this new venture, which aims to build nature-based real asset solution (NBS) projects that tackle the loss of biodiversity, climate change, and rural poverty – and in doing so, to leverage the net-zero ambition of its investor and corporate partners to achieve the benchmarks set in the Paris Agreement.

“We have known each other for a very long time and have previously successfully invested and operated such projects,” said Clément Chenost, co-founder and managing partner, SWC. “We think we are particularly well equipped to contribute to tackling this unprecedented challenge through The Shared Wood Company with the support of our sponsors.”

SWC is hitting the ground with funds at-hand, having completed its Series A backed by AXA IM Alts, a world-leading alternative asset manager through its impact investing strategy, and ENGIE, a global force in low-carbon energy and services. This capital has been committed by the sponsors to be used by the management company for the origination and business development of its strategic goals.

Chenost explained to GAI News that the capital secured from AXA IM Alts and ENGIE will be used by SWC to fund the launch and to build-out a series of stand-alone special purpose vehicles (SPV), which will act as operating subsidiaries of SWC for the management of these natural capital strategies. And although future SPVs may one day include additional investors outside of this core group, there is no immediate intention of bringing on new investors. 

“Our planet is overheating,” explained Chenost. “We need to pass from 51 GtCO2eq. /year emissions to net ZERO and the decarbonization of energy and heavy industry, alone, won’t suffice.”

He continued, “Nature Based Solutions are a key leverage to reverse the trend and reach the Paris Agreement target (1.5°C), and the biodiversity and poverty reduction challenges attached to that mandate. Agroforestry, regenerative agriculture, afforestation, reforestation, forest conservation and ecosystem restoration are key “technologies” to be implemented at scale to reach the goals of the Paris Agreement.”

Under its mandate, SWC will control the entire NBS project development cycle – from design to development, financing, building, and operation – eventually into the route-to-market for environmental products and services. To accomplish this, SWC will be partnering with key corporate entities seeking out climate, social, and biodiversity benefits. However, notably, SWC will not only be focused on carbon-based projects, but will also be the creator of sustainable value chains able to address additional factors, such as unsustainable land use, while generating multiple revenue streams to capture market value in an eco-conscious way. 

Through this model, SWC is looking to commit more than $500 million by 2028 through up-front investment and offtakes via NBS field operations with expectations that 40 million certified emission reductions, or removals (measured in tons of CO2), will occur over the span of two decades, ushering in significant environmental and social impacts vis-a-vis the Paris Agreement.

The best advice is always to focus on what you know best, and for Valiergue, Gonzalez Aybar, and Chenost that would mean the geographies of Africa, Latin America, and Europe. Chenost, however, explained to GAI News that eventual expansion into additional markets is never off the table. 

SWC will serve as a long-term investor in these NBS projects designed to deliver carbon emission reductions, agroforestry, and forestry by-products, or green commodities, which will then attain value through off-take agreements with corporate partners. Chenost told GAI News that SWC currently has a strong pipeline of opportunities, however, the group is open to broadening their pipeline for new assets or situations that align with their natural capital investing goals. 

Importantly, what will set SWC apart is how it will operate within this structure – by dedicated local operating entities (OpCos), either alone or through joint ventures with local partners, creating a lasting framework for long-term, hands-on management.

Through its novel approach of combining carbon and value chains, its leveraging of OpCos as a means of patient management, combined with the pioneering expertise in natural capital investment inherent in its three founders through their histories of establishing and managing cutting-edge private and public investment vehicles over the last decade, SWC is well-positioned to secure a significant share of the global voluntary carbon market, estimated to be worth $30 billion by 2030.

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~ Lynda Kiernan-Stone is editor 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 Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.