Nature-based solutions need both catalytic and institutional capital to remove carbon from the atmosphere at scale, according to a study by the Forest Investor Club, a network of financial institutions, companies and other organisations investing in forests and nature.
$11 trillion of investment into NBS is needed between 2022 and 2050 for the sector to fully contribute to limiting climate change to 1.5C, the FIC states in its first annual report, released earlier this month. But with the sector still in its infancy, catalytic capital is needed to de-risk NBS strategies and build up an asset management track record. The report identifies seven investment strategies – each managed or supported by a member of the FIC – that are deploying catalytic capital in this sector. The list is not exhaustive.
- The Apple Restore Fund: a $200 million commitment from Apple in partnership with Goldman Sachs and Conservation International. The Restore Fund has also partnered with Climate Asset Management.
- BTG Pactual’s Timberland Investment Group: a long-established timberland investment manager that is now committing 50 percent of its portfolio to forest conservation and restoration. Its latest reforestation strategy has a $1 billion financing target, and has received a $50 million commitment from the IDFC.
- Conservation International Ventures: a venture philanthropy fund that has raised $19 million. It is planning to launch a $50 million-target fund.
- Lombard Odier Investment Managers’ New Food Systems Strategy: an investment platform managed by LOIM that backs “sustainable, regenerative, nature-positive economic systems”, according to the FIC.
- Mirova Land Degradation Neutrality Fund: long term debt and equity financing for agroforestry projects and companies. It has raised $208 million from DFIs and other publicly funded organisations.
- New Forests African Forestry Impact Platform: has raised $200 million from three European DFIs, British International Investment, Norfund and Finnfund. New Forests aims to raise $500 million over the next three years.
- &Green Fund: advised by SAIL Ventures and established in partnership with the Norwegian government and Norway’s International Climate and Forest Initiative. It has raised $180 million so far and aims to reach $1 billion in AUM within the next 10 years.