Key Impact Points:

• 8 million credits: Microsoft acquires 8 million carbon removal credits from BTG Pactual’s reforestation strategy.
• $1 billion initiative: The credits stem from a $1 billion reforestation and restoration strategy in Latin America.
• Climate and community benefits: The strategy supports climate impact, biodiversity, and community development.

Executive Summary:

BTG Pactual Timberland Investment Group (TIG) will provide Microsoft with 8 million carbon removal credits, marking the largest carbon dioxide removal transaction to date. This is part of a $1 billion reforestation and restoration strategy in Latin America, with Conservation International as Impact Adviser. The initiative aims to restore 135,000 hectares of natural forests and plant millions of trees, offering significant climate, biodiversity, and community benefits.

BTG Pactual Timberland Investment Group (TIG) has announced a landmark carbon offset credit transaction with Microsoft. Under the agreement, TIG will supply Microsoft with up to 8 million nature-based carbon removal credits through 2043. According to MSCI Carbon Markets data, this transaction is the largest known of its kind.

Transaction Details

• Strategy Scope: The credits originate from TIG’s $1 billion reforestation and restoration strategy in Latin America, with Conservation International advising to ensure environmental, climate, and social impacts.
• Restoration Focus: The strategy targets conservation and restoration of deforested regions, including Brazil’s Cerrado biome, aiming to protect and restore approximately 135,000 hectares of natural forests and establish sustainable commercial tree farms on another 135,000 hectares.
• Progress: TIG has already invested in 37,000 hectares, planted over 7 million seedlings, and initiated restoration of 2,600 hectares of natural forest.

“From its inception, we have aimed to break new ground with this strategy, both in terms of scale and impact. We are proud to work with industry leaders like Microsoft, who are committed to purchasing high-quality removal credits and retiring them as part of a comprehensive corporate decarbonization strategy. Microsoft’s leadership has helped build the high-integrity carbon offset market. They are blazing a trail that other companies can follow,” said Mark Wishnie, Chief Sustainability Officer of TIG.

“Institutional investors have a critical role to play in delivering nature-based solutions at a scale that matters for climate and biodiversity. The scale of the native forest restoration and sustainable timber production that TIG seeks to deliver with our reforestation strategy is what enables a carbon removal credit transaction of this size,” said Gerrity Lansing, Head of TIG.

Conservation and Community Benefits

“This commitment from Microsoft is proof positive that we don’t have to compromise our future for our balance sheets. We can restore degraded tropical forests and remove carbon at scale; we can mobilize private capital; and we can protect nature without abandoning economic production — enhancing our biodiversity, livelihoods, and climate all at once,” stated Dr. M. Sanjayan, CEO of Conservation International.

Microsoft’s Carbon Commitment

This transaction aligns with Microsoft’s goal to be carbon negative by 2030 and to remove all historical emissions by 2050. “Advancement towards Microsoft’s carbon negative goals necessitates innovative projects that can swiftly and sustainably scale carbon removal. This project exemplifies how reforestation and restoration can deliver carbon removal at scale while supporting local communities and restoring vital ecosystems. This approach will attract investment to the conservation space and help scale carbon removal in line with what climate science demands,” said Brian Marrs, Senior Director for Energy & Carbon Removal at Microsoft.

Broader Implications

“The scale of this undertaking demonstrates the potential that exists in Brazil and other Latin American countries to deliver significant climate benefits, while also supporting vibrant rural economies,” added Mark Wishnie.

TIG and Conservation International ensure that their strategy enhances biodiversity and supports inclusive community development. Over 297 species have been identified on the first property, with efforts to create extensive natural habitat corridors and conduct research on restoration techniques.

Related Article: Microsoft Purchases 970,000 Forest Carbon Removal Credits from Anew Climate

Community Training

TIG collaborates with local communities for seed collection, providing new income sources and supporting restoration markets. This comprehensive approach combines ecological restoration with economic benefits, promoting sustainable development in the region.