Schroders and Conservation International are working together to increase global investment in natural climate solutions
Through this partnership, Akaria Natural Capital has become one of Singapore's first impact investment managers with a specific focus on natural capital.
Today, Schroders and Conservation International announced a groundbreaking collaboration to accelerate investment in natural climate solutions in South East Asia. The partnership has established Akaria Natural Capital as one of Singapore's first dedicated natural capital impact investment managers.
Clients of Schroders are increasingly concerned with maximising impact while also benefiting from strong returns. According to Schroders' Institutional Investor Study 2022, impact investing is now regarded as one of the key pillars of sustainable investing, alongside integration and positive screening.
Over the first five years, Akaria Natural Capital will invest in 15 to 20 high-quality natural climate solutions projects across South East Asia. It intends to manage a series of funds that will invest in natural capital solutions projects in the region and will apply to the Monetary Authority of Singapore for a fund management licence.
These projects will aim to provide both long-term returns and positive environmental benefits. They will also seek to have a positive impact on local communities.
According to Conservation International, nature could account for more than 30% of the climate action required to avoid the worst effects of climate change. Natural climate solutions, on the other hand, currently receive less than 3% of total global climate finance.
Aside from carbon capture and storage, natural climate solutions provide a variety of other benefits, such as filtering fresh water and providing breathable air.
This collaboration also aims to improve understanding of how to allocate capital to nature and to support the development of a natural capital investment market.
Gary Addison, Chief Executive Officer, and Simon Chadwick, Chief Impact Investment Officer, will lead Akaria Natural Capital. Both have extensive backgrounds in private equity investment and have actively participated in its creation as co-founders.
Today's announcement is part of Schroders' larger focus on natural capital investment. Schroders announced a strategic partnership with Natural Capital Research (NCR) and Oxford Sciences Innovation last year (OSI).
Schroders announced its membership in the Natural Capital Investment Alliance (NCIA) at the UN climate summit COP26 last year. The NCIA aims to accelerate natural capital as a mainstream investment theme. As part of an influential speaking slot at the COP26 Leaders event Action on Forests and Land-use, Schroders' Chair, Dame Elizabeth Corley, stated Schroders' commitment to investing in natural capital. Schroders joined more than 30 other major financial institutions in pledging to combat agricultural and commodity-driven deforestation.
As part of its award-winning Engagement Blueprint, it has also made natural capital and biodiversity a priority for active engagement with companies.
Peter Harrison, Group Chief Executive of Schroders, commented:
“Large scale investment is needed fast to halt and reverse nature loss. Nature-based solutions should be part of the solution to tackle climate change – and they can bring good returns. But the devil is in the detail. They must be high quality, and they must put local communities and the people who live there at the heart of any action. That’s why we’re working with Conservation International to do this right. Our ambition is high: we want to harness the power of investment to accelerate a nature positive future, by creating opportunities for impact beyond returns.”
Dr M Sanjayan, Chief Executive, Conservation International, commented:
“When we invest in the health of earth’s vital ecosystems, we not only keep planet-warming carbon in the ground, we also keep at-risk species out of harm’s way, support livelihoods and quality-of-life in rural communities, improve food, water, and resource security, and reduce the risk of disease spillover. Nature-based solutions hold exceptional promise, but it will take sustained investment to unleash that potential at scale. This initiative sends a powerful message to the financial services industry. Generating healthy returns, protecting nature, and supporting community development need not be mutually exclusive goals. We’re grateful to Schroders for their commitment to building a replicable model for others to adopt.”
Conservation International has more than three decades of technical and scientific expertise working alongside communities while raising and deploying conservation capital at scale.
Where appropriate, Schroders will seek to align its engagement expectations with those of major collaborative initiatives such as the Taskforce on Nature-related Financial Disclosures, Science-Based Targets for Nature and NA100+.
It is working to build a robust picture of its impact on nature and as well as being a founding member of the Natural Capital Investment Alliance, it is a member of the Net Zero Asset Managers' Initiative, RE100, the Terra Carta and Climate Action 100+. Source: Schroders news