By Simon Jessop and Virginia Furness
LONDON (Reuters) – Climate Asset Management has raised more than $1 billion to invest in natural capital projects such as regenerative agriculture, its chief executive told Reuters.
While still a relatively niche area, demand from asset owners to invest in improving soil health, planting trees and rehabilitating land has increased in recent years after countries agreed to do more to protect the world’s biodiversity.
The Global Biodiversity Framework, known as the Paris Agreement for nature, calls for a substantial increase in public and private finance – by at least $200 billion annually – towards addressing the nature-related funding gap.
CAM, a tie up between HSBC’s fund arm and advisory firm Pollination, said it had seen demand from a range of financial investors and companies, and that its Natural Capital Fund and Nature Based Carbon Fund had closed to new money.
The Restore Fund, designed by CAM and tech company Apple, remains open and has around $280 million. The balance of the firm’s assets are split roughly across the two closed funds.
Backers of the Natural Capital Fund included German insurer Gothaer Asset Management, which contributed $100 million, CAM said.
The Nature Based Carbon Fund, which aims to generate carbon credits by investing in large-scale landscape restoration and conservation projects and will pay investors in these credits, had seen strong demand from companies like GSK.
Chief Executive Martin Berg, who joined the firm last year, said nature was moving from a very nascent asset class to something which was attracting more attention from institutional investors.
He said nature-related reporting requirements like the Taskforce for Nature-related Financial Disclosures (TNFD), which asks companies to report on the impacts they have on the natural world, were also driving interest in the asset class.
“At first the disclosure obligation was focused on risk, but soon opened up opportunities to invest, which transferred a challenge into an opportunity,” Berg said.
Berg said the funds have already allocated a significant portion of the capital raised and that performance was “inline with expectations.”
CAM said it will start fundraising again in 2025.
(Reporting by Simon Jessop; Virginia Furness)
