Climate Asset Management, the dedicated natural capital investment manager formed as a joint venture between HSBC Asset Management and climate change investment and advisory firm Pollination, has achieved commitments of more than USD $650 million across its two Natural Capital strategies.
Commitments have been raised from a geographically diverse range of global financial institutions and corporations from Europe, the US, Asia-Pacific and the UK, with HSBC acting as anchor investor for both strategies. This investor mix underlines the increasing awareness of the benefits an investment into this important asset class can deliver to a range of institutional investors, including insurers and corporates with net zero / carbon neutral targets.
The two investment strategies are particularly relevant given the recent inclusion of nature based solutions for the first time in the cover text at COP27 and ongoing discussions around financing for biodiversity and biodiversity-credits at COP15. Respectively, they offer investors the choice of investing in nature for a financial return or to receive high-quality carbon credits.
Climate Asset Management continues to raise funds across both strategies and expects to make further announcements during 2023.
The Natural Capital Strategy (NCS) aims to deliver long-term financial returns alongside improved environmental outcomes from regenerative landscape management in agriculture, forestry and environmental assets.
To support the deployment of capital committed, NCS has developed a pipeline of natural capital investment opportunities, building on an initial investment into a land development project in Extremadura, Spain. The project aims to transform 400 hectares of traditionally flood-irrigated farmland to regenerative high-value almond production, with specific areas allocated towards enhanced biodiversity.
The Nature Based Carbon Strategy (NBCS) targets landscape restoration in developing economies to deliver biodiversity improvements at scale for climate resilience, community benefits, and high-quality carbon credits with a view to enabling global corporations to achieve their decarbonisation targets.
NBCS finances nature-based carbon projects, particularly in their early stage of development, whilst looking to ensure that meaningful benefits flow to the local communities. Its first publicly announced investment, the Restore Africa Programme (the Programme), is a key example of this. The Programme, led by the Global EverGreening Alliance, aims to restore nearly two million hectares of land and directly support 1.5 million smallholder farming families, across six African countries – Kenya, Ethiopia, Malawi, Tanzania, Uganda, and Zambia. It has already progressed to implementation in three of those countries (Uganda, Kenya and Malawi) in less than 12 months after the collaboration between Climate Asset Management and Global EverGreening Alliance was first announced at COP 26, evidencing the momentum generated so far. NBCF will continue to scale this traction with the commitments announced today.
The commitments to date and the ongoing capital raising demonstrate Climate Asset Management’s continued contribution to the goals of the Natural Capital Investment Alliance, of which Climate Asset Management is a Founding Member.
Christof Kutscher, Chief Executive Officer of Climate Asset Management, commented: “We are delighted to have secured these commitments from a diverse global institutional investor-base for our Natural Capital and Nature Based Carbon strategies. Both investment strategies are grounded in nature-based assets and we find they are increasingly attractive to forward-thinking organisations 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.”
The joint venture between Pollination and HSBC Asset Management offers significant benefits in accessing, originating and analysing deal pipeline, understanding and anticipating regulatory change in natural capital and nature-based carbon markets to enable investible propositions, and unlocking built-up demand for natural capital and nature-based carbon investment on a global scale.
Photos of the project in Extremadura, Spain and the Restore Africa Programme available upon request
Kate Rayson – Head of Marketing & Communications, Pollination
+61 439 959 034
Ben Thompson – Marketing and Communications, Climate Asset Management
+44 7837 408 421
Mat Barling – Senior External Communications Manager, HSBC
+44 7384 794295