LONDON, Sept 20 (Askume) – Climate Asset Management has raised more than $1 billion to invest in natural capital projects such as regenerative agriculture, its chief executive told Askume.
Although still a relatively niche sector, demand from property owners to invest in improving soil health, planting trees and restoring land has increased in recent years after various countries agreed to do more to protect the world’s biodiversity.
The global biodiversity framework, known as the Paris Agreement on Nature, calls for a significant increase in public and private funding – at least $200 billion per year – to address nature-related funding gaps.
CAM, the funds arm of HSBC (HSBA.L) and a partner in advisory firm Pollination, said it had seen demand from a number of financial investors and companies and that its Natural Capital Fund and Natural Carbon Fund had stopped accepting new funds.
The recovery fund designed by CAM and technology company Apple (AAPL.O) is open with about $280 million in funding. The remainder of the company’s assets is roughly divided between two closed funds.
Supporters of the natural capital fund include German insurer Gothaer Asset Management, which has contributed $100 million, CAM said.
Nature-based carbon funds, which aim to generate carbon credits by investing in large-scale landscape restoration and conservation projects and will pay out those credits to investors, have seen strong demand from investments such as GSK.L.
Chief Executive Martin Berger, who joined the company last year, said nature was transforming from a very new asset class to one that was attracting more attention from institutional investors.
Nature-related reporting requirements, such as the Task Force on Nature-related Financial Disclosures (TNFD), which requires companies to report their impacts on the natural world, are also driving interest in the asset class, he added.
“Initially, disclosure obligations focused on risks, but soon investment opportunities opened up, turning challenges into opportunities,” Berg said.
Berg said the funds had allocated a significant portion of the capital raised and were performing “in line with expectations”.
CAM says it will begin fundraising again in 2025.
