HSBC and UK-based climate investor and advisor Pollination launched Climate Asset Management in 2020 to prove out the institutional investment case for protecting and restoring natural resources.
The funds attracted backing from a diverse group of global financial institutions and corporations, which CAM’s Martin Berg called “a huge vote of confidence for this new and emerging asset class.”
Last year, CAM co-launched a separate nature-based carbon removal fund with Apple as a follow-on to the tech giant’s Restore Fund, with roughly $280 million from the tech giant and two of its suppliers (see, “How Big Tech can restore forests – and credibility in voluntary carbon markets”).
Institutional impact
The Natural Capital Fund invests in regenerative agriculture, sustainable forestry and other nature-based real assets in developed markets. The fund is backed mainly by pensions and insurers, such as Germany’s Gothaer Group, which committed $100 million through its asset management arm.
The Nature Based Carbon Fund invests in carbon projects in emerging markets that generate nature-based carbon credits for its corporate LPs, like UK-based pharmaceutical giant GSK. Both the Natural Capital Fund and Nature Based Carbon Fund are anchored by HSBC.
Natural capital
CAM says projects that are backed with capital from its funds have potential to boost positive environmental outcomes on more than five million acres of land.
CAM’s portfolio includes 20,000 acres of sustainable forestry in New Zealand; and a cluster of agroforestry projects with smallholder farmers in Kenya, Uganda and Malawi, focused on improving food security and driving economic mobility for local farming communities.
While the funds have climate, biodiversity and other environmentally-positive targets, CAM aims to generate returns for investors from land appreciation and revenues from their productive uses. The asset manager plans to go on another fundraising haul next year.
