To get a sense of how global nature finance is evolving, we asked a range of institutional investors about their experiences investing in nature. We uncovered their motivations, ambitions, and what they consider to be the greatest risks and opportunities in the nature space – forming the backbone of the inaugural Pollination Nature Finance Focus report.
Climate Asset Management, the specialist “natural capital” investment manager formed by HSBC Asset Management (HSBA.L) and climate change advisory firm Pollination Group, said it has raised $650 million for projects which aim to protect the environment.
Its investors are corporates, ranging from some of the top global 100 companies to smaller niche players, Martin Berg, CAM’s chief investment officer, said. Rather than financial returns, these investors will receive carbon credits.
“We thought the main target (for the funds) would be institutional investors but we now recognise corporates are key players … they are really becoming (big) investors in this,” he said.
Through its Natural Capital Strategy’s flagship 15-year Natural Capital Fund, CAM is targeting a 10% return on investment before fees on projects in regenerative agriculture and forestry in developed markets. CAM’s second strategy, its Nature Based Carbon Strategy, taps into increasing corporate demand for verifiable carbon offsets and will finance nature-based carbon projects in developing economies.
WATCH: The White House ‘Knowledge in Nature’ event
21 May 2022 / WORDS BY Pollination
Today is UN International Day for Biological Diversity, which aims to increase understanding and awareness of biodiversity issues. Momentum is building for greater action as the global community is called to re-examine our relationship to the natural world. In line with this The White House Office of Science and Technology Policy recently brought together multi-disciplinary experts to discuss how to protect nature and highlight that biodiversity is the answer to several sustainable development challenges.
Pollination Executive Director Carter Ingram participated in the virtual White House Office roundtable titled “Knowledge in Nature: How Nature Can Help Grow a Better Future”. The discussion brought together experts in economics, the environment, and infrastructure, with business, Tribal, governmental, and non-profit leaders to discuss what more we can do so that we and nature thrive and ensure that US Government policies reflect the foundational role of nature in achieving goals for climate, equity, and the economy.
The event also unveiled new Biden-Harris Administration initiatives for assessing, accounting for, and finding solutions in nature which was the fruit of several years’ of research by a panel of experts including Dr Ingram.
The first U.S. National Nature Assessment which will build on the wealth of existing data, scientific evidence, and Indigenous Knowledge to create a holistic picture of America’s lands, waters, wildlife, ecosystems and the benefits they provide to the economy, health, the climate, environmental justice, and national security. The assessment takes stock of the USA’s current natural assets, as well as looking ahead to anticipate how nature and its benefits might change in the future. This information is crucial to identify opportunities for nature to help achieve societal and economic goals. The National Nature Assessment will provide information to guide decisions about how ecosystem restoration funds could protect species in decline, support economic recovery, and overcome injustices done to communities with limited nature access. The assessment will provide a clear idea of which nature investments could make infrastructure more resilient—like using living shorelines to buffer rebuilt roads from storms and erosion, or pairing bridge-building with watershed management to help the bridge last longer. The Assessment will also indicate how effectively natural investments to combat climate change are working.
The launch of a Natural Capital Account initiative to connect changes in nature with changes in economic performance. These accounts will work with standard national accounting to measure the economic value that natural assets provide to society — from forests and reefs, to fish stocks and urban parks, to the quality of air and water. Natural assets will finally be reflected on the nation’s balance sheet, where they will reveal how future opportunities are changing — just like a balance sheet helps assess a business’s creditworthiness. This information fills important economic gaps and will help improve federal regulations and private business decisions. By connecting nature to the core economic statistics system, there will be a better understanding of who has access to nature’s economic benefits and who does not, reporting on several aspects of inequality that are currently difficult to measure. If it is possible to see how economic progress depends on nature, then it will be clear what’s at risk when if it is lost — and what’s to gain from investing in it.
Accelerating nature-based solutions to protect, conserve, restore, sustainably use, and manage terrestrial, freshwater, coastal, and marine ecosystems to improve nature and quality of life. Investments in nature-based solutions are already being catalyzed inside and outside of government, but much more can –and must—be done. Communities are clamouring for marsh restoration to protect coasts, shade trees to cool homes and reduce energy costs, green spaces to revive communities and improve health, wetlands and forests to filter water and reduce sewerage needs and pollution, and native plants to protect food supplies.
Watch the conversation:
16 February 2022
Cutting through complexity: Making informed policy decisions in engaging with international carbon markets post-Paris Agreement
11 December 2023 / WORDS BY Veda FitzSimons, Maggie Comstock and William Acworth
The future of the international carbon market hinges on the domestic implementation of the rulebook for cooperation laid out in the Paris Agreement, known as Article 6. Yet frameworks to implement Article 6 are complex and continue to evolve.
We are delighted to have partnered with the Asian Development Bank on a new report that sets out the key strategic questions countries must consider in determining whether and how they engage with carbon markets in the post-Paris Agreement era.
Pollination launches inaugural Nature Finance Focus report to track global investment in nature
21 September 2023 / WORDS BY Zoe Whitton
At Pollination we spend a lot of our time working on nature with corporates and with investors, and also finding ways to invest in nature-related opportunities and solutions. We find that many corporate leaders are still unsure of how to build their knowledge and begin developing their approach. We also see our clients and counterparties across industry engaging with nature for a variety of reasons – some are focussed on opportunities, and others on risk.
We wanted to understand more about how investors specifically are engaging with nature, as this is relevant not only for how we expect capital markets to develop but also for what will be asked of the companies we support. In a survey for our new Nature Finance Focus report, we asked 557 global investors who are working on and thinking about nature for their view on risks, opportunities, and challenges. We asked them what they were doing, why they were doing it, and where they were doing it. We also asked about some of the challenges and barriers they are facing.
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