Global asset management firm AXA Investment Managers (AXA IM) announced today the acquisition of carbon offsetting platform ClimateSeed from BNP Paribas Securities Services, through AXA’s alternative investment arm AXA IM Alts, as part of its Impact Investing Strategy.
Launched in 2018, ClimateSeed connects businesses seeking to offset their carbon emissions with developers offering carbon reduction projects with high environmental and social benefits. Currently, the company’s portfolio includes 36 global projects in 24 countries with an aggregated capacity of over four million verified carbon credits.
Marco Morelli, Executive Chairman of AXA IM and a Member of AXA’s Management Committee, said:
“This acquisition enhances AXA IM’s capacity to bring solutions to perfectly align our investments with AXA’s strategy and goals as well as answer the needs of our third-party clients. As corporates and governments globally embark on net-zero transition plans, the market for carbon credits is expected to significantly expand. Our investment in ClimateSeed is further evidence of our commitment to expand and scale up the range of activities that combat climate change and preserve biodiversity.”
The transaction comes as the market for carbon offsets and credits heats up and is expected to increase significantly over the next few years with businesses launching net-zero ambitions, and turning to offsets as a bridge to their own absolute emissions reduction efforts, or to balance difficult to avoid emissions. According to a recent report from Fitch Ratings, increasing demand driven by tightening climate policies will cause demand for carbon offsets will exceed supply within the next five years. Similarly, research by climate-focused Startup Sylvera forecasts a significant increase in the price of carbon as the inventory of voluntary carbon credits drops.
Last month J.P. Morgan Asset Management significantly boosted its presence in the carbon offset market with the acquisition of timberland investment and natural resource management company Campbell Global.
AXA IM stated that the acquisition builds upon its Impact Investment Strategy’s mission to fight climate change and preserve biodiversity. The firm will seek to broaden ClimateSeed’s project portfolio with additional investments, fund its operating activities, and support its growth.
Sebastien Nunes, CEO of ClimateSeed, said:
“We recognize the importance of carbon reduction projects as a key role in fighting climate change in line with the IPCC ambitions and reaching global carbon neutrality. We are honoured to take part in this new development phase for ClimateSeed with AXA IM and are very thankful to BNP Paribas for believing in us as well as their continued support. We have the ambition to generate the maximum number of positive social, environmental impacts that can benefit the climate, biodiversity, and local communities. This decade is crucial to restore the planet and reverse climate change.”
BNP Paribas Securities Services will continue to support ClimateSeed, offering the platform to its clients through its distribution network.
Antoine Sire, Head of Company Engagement at BNP Paribas, said:
“We are very proud to have developed strong and innovative platforms for the voluntary carbon offsetting markets. AXA IM will now support ClimateSeed through the next stage of its development. BNP Paribas is as engaged as ever in its fight against climate change and continues to propose ClimateSeed through its network while developing its first-class carbon offsetting solutions for its corporate and institutional clients.”