Investing in nature-based solutions
The Intergovernmental Panel on Climate Change (IPCC) made it clear that meeting the goals of the Paris Agreement will require large-scale protection and restoration of natural eco-systems. We believe that nature-based solutions have an important role to play.
Offsetting the carbon emissions of our equities
To demonstrate our commitment to supporting the Net Zero initiative, in what we believe is an industry first, we have combined our low-carbon sustainable investment approach with the intention to offset the scope 1 and scope 2 carbon emissions generated by the equities in our sustainable funds.
We intend to do this by investing in nature-based solutions. The costs of funding these “carbon offset” projects will be captured by Cazenove Capital and not passed onto investors.
Nature-based solutions could reduce emissions by 11.3 billion tonnes per year by 2030
Source: The Nature Conservancy
SCOPE 1: These are all the direct emissions under the company’s control, for example their delivery van fleets or company cars.
SCOPE 2: These are all the indirect emissions under the company’s control, such as the electricity they purchase and use to run their business.
What are nature-based solutions?
Nature-based solutions are projects which protect, transform or restore land and biodiversity. In this way, nature absorbs more CO2 emissions from the atmosphere. We believe that nature-based solutions play a complementary and critical role alongside the decarbonisation of the economy. Nature-based solutions are not an excuse for business as usual – and we are actively using our influence to encourage large, international companies to adopt sustainable practices. We recognise, however, that there are certain sectors such as aviation, shipping and steel where the technology does not yet exist to decarbonise. Nature-based solutions can therefore play a role in offsetting the unavoidable emissions that companies cannot yet eliminate.
As well as drawing down carbon from the atmosphere, nature-based solutions provide many benefits, such as conserving wildlife habitats, protecting biodiversity, improving water quality and reducing flood risk.
They can also potentially save lives and improve outcomes for communities around the world – but only if executed properly and with high levels of integrity.
What is carbon offsetting?
Carbon offsetting allows individuals and companies to invest in environmental projects in order to balance out their own carbon footprints. The projects are usually based in developing countries and most commonly are designed to reduce future emissions. This might involve rolling out clean energy technologies or soaking up CO2 directly from the air through the planting of trees.
Given we already allocate a significant amount of investment towards clean and renewable technologies our chosen projects are therefore focused on the protection of biodiversity and reforestation around the world.
Our partnership with Ecologi
Implementing nature-based solutions with integrity and transparency
The market for carbon offsets can be complex and has a chequered history. As a result, it is important to pick projects that are accredited in accordance with strict global standards. Understanding this complexity requires deep expertise and dedication. We therefore partnered with Bristol-based social enterprise Ecologi to source and monitor projects on our behalf. Ecologi, only launched in June 2019, has already experienced huge growth. As at the end of December 2021 their customers had funded the planting of over 30 million trees.
Verified by leading global standards and harnessing the latest AI technology
The projects we are investing in are all certified by either Gold Standard, Verra, or the Climate Community and Biodiversity Standard (CCBS). In addition, projects are monitored by Pachama, which is backed by The Climate Pledge Fund. Pachama uses machine learning with satellite imaging to measure carbon captured in forests. This technology is used for remote verification and monitoring, providing us with a new standard of assurance on the impact of our carbon offsets. We have provided examples of the types of projects we will be supporting below.
Example projects
Protecting and restoring the Pacific Coast of Colombia
This "avoided deforestation" project is based within the biologically diverse Chocó-Darién bioregion of Colombia. It sets out to address the issue of deforestation and illegal logging at a local level and to protect and restore 83,452 hectares of land.
The project’s objectives are threefold: to mitigate climate change by reducing deforestation and forest degradation; to contribute to biodiversity conservation; and to foster sustainable development of local communities.
Uruguay forest plantation
Located in the heart of Uruguay, this project will turn 21,298 hectares of land that have been used for beef cattle grazing for over 300 years, into sustainably managed forests. The project will convert this land into forest plantations, for obtaining high-value, long-lived timber products and for absorbing large amounts of carbon dioxide.
You can offset your own carbon footprint with our partner Ecologi.
This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.
This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.
All data contained within this document is sourced from Cazenove Capital unless otherwise stated.
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