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Schroders and Conservation International to accelerate global investment in natural climate solutions

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Schroders and Conservation International to accelerate global investment in natural climate solutions

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The collaboration has established Akaria Natural Capital as one of the first dedicated natural capital impact investment managers in Singapore.

Schroders and Conservation International are today announcing a ground-breaking partnership to accelerate investment in natural climate solutions in South East Asia. The collaboration has established Akaria Natural Capital as one of the first dedicated natural capital impact investment managers in Singapore.

Schroders’ clients are increasingly focused on maximising impact while also benefiting from robust returns. Impact investing is now viewed among the key pillars of sustainable investing, alongside integration and positive screening, Schroders’ Institutional Investor Study 2022 has found.

Akaria Natural Capital will initially deploy capital towards a range of 15 to 20 high quality natural climate solutions projects across South East Asia over the first five years. It plans to manage a series of funds that invest in natural capital solutions projects in the region and will apply for a fund management licence from the Monetary Authority of Singapore.

The goal of these projects will be to deliver both long term returns and positive environmental benefits. They will also target positive impacts for local communities.   

Nature could account for more than 30% of the climate action needed to avoid the worst effects of climate change, according to Conservation International. However, natural climate solutions currently receive less than 3% of all global climate finance.

Natural climate solutions also provide a range of additional benefits beyond carbon capture and storage, such as filtering fresh water or providing breathable air.

This partnership also aims to contribute to better understanding how to allocate capital towards nature and supporting the development of a natural capital investment market.

Akaria Natural Capital will be led by Gary Addison, as Chief Executive Officer, and Simon Chadwick, as Chief Impact Investment Officer, who both have extensive backgrounds in private equity investment and have actively participated in its creation as co-founders.

Today’s announcement forms part of an important wider focus for Schroders on natural capital investment. Last year Schroders announced a strategic partnership with Natural Capital Research (NCR), along with Oxford Sciences Innovation (OSI).

At the UN climate summit COP26 last year, Schroders announced it had joined the Natural Capital Investment Alliance (NCIA), which aims to accelerate natural capital as a mainstream investment theme. Schroders’ Chair, Dame Elizabeth Corley, set out Schroders’ commitment to investing in natural capital as part of an influential speaking slot at the COP26 Leaders event Action on Forests and Land-use. Schroders became one of more than 30 leading financial institutions to commit to tackle agricultural, commodity-driven deforestation.

It has also made natural capital and biodiversity a priority for active engagement with companies as part of its award-winning Engagement Blueprint.

See related article: Schroders launches Sustainable European Equity, Digital Infrastructure & Sustainable Bond strategies within UK Fund Range

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

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