HSBC Global Asset Management and climate change-focused investment and advisory firm Pollination Group Holdings announced today the formation of a joint venture to create the world’s largest “natural capital” manager, HSBC Pollination Climate Asset Management.
Pollination describes natural capital investing as recognizing the intrinsic value of ecosystems, placing a value on the quality of water, biodiversity, the health of soils and oceans, and the need to prevent climate change. Investing in this theme provides exposure to projects focused on nature including sustainable forestry, regenerative and sustainable agriculture, water supply, blue carbon (carbon captured by oceans and coastal ecosystems), nature based bio-fuels, or nature based projects that generate returns from reducing greenhouse emissions.
HSBC Pollination Climate Asset Management will create private funds that invest in a diverse range of projects that will preserve, protect and enhance nature over the long-term. The funds are intended to offer investors a wide exposure to global natural capital themes in both emerging and developed markets, while also providing stewardship and evaluation of the investments, enabling investors to quantitatively measure impact.
The partners announced that they are targeting launching the first fund mid-2021, aiming to raise $1 billion, followed by a carbon credit fund at up to $2 billion. The partnership is aiming to attract capital from institutional investors, including sovereign wealth funds, pension funds and insurers.
Christof Kutscher will be Executive Chairman of the new venture. Kutscher is a investment industry veteran, having served as Chairman of the Board of both AXA Investment Managers, and Swiss Private Bank Bergos Berenberg, and in leading executive roles at UBS Global Asset Management and LGT Capital Management.
Martijn Wilder AM, Co-founding Partner, Pollination said:
“To reach the goals set in the Paris Agreement we need to originate and fund new approaches that protect nature, at scale. In a global economy that is on a path to rapid decarbonisation, we regularly hear from investors and organisations looking for investment opportunities that will mitigate long-term climate risk. In natural capital, we’re accelerating investment in an asset class that can help combat climate change and build biodiversity, whilst also generating long-term returns for institutional investors. Investing in the resilience of nature is investing in the resilience of the economy. Nature is the most fertile investment we have.”
Nicolas Moreau, Global CEO, HSBC Global Asset Management, said:
“Clients are increasingly focused on environmental matters and this initiative is designed to help them achieve a financial return, while at the same time creating a positive impact on the world’s biodiversity which will be felt for generations to come. Through solutions such as this, we’re helping clients achieve their long-term investment objectives, while meeting their increasing demand to actively contribute to a more sustainable world.”