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AXA IM Alts commits €500 million to Natural Capital strategy

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AXA IM Alts announced the launch of a new Natural Capital strategy complementing its drive to invest in natural ecosystems to combat climate change. This €500 million fund is part of the €1.5 billion already committed to support sustainable forest management.

  • AXA IM Alts announced the launch of a new Natural Capital strategy designed to support nature-based solutions. It further fills the Group’s pre announced €1.5 billion commitment to projects reversing climate change and biodiversity loss.
  • Much of the money will be funnelled into forest and natural voluntary carbon credits lifting the supply of credits in this area that has previously suffered from doubts over verification and management but now has keen interest from investors.
  • AXA IM Alts is also seeking to do direct financing and strategic equity investments in project developers with local market access boosting activity in conservation and carbon financing with potential multiplier effects.

The investment pool will initially be reserved for AXA Group investors who have provided the initial €500m commitment.

The company said that “the Natural Capital Strategy will focus on financing activity that ensures that vulnerable or high value natural habitats are protected from deforestation, including both financing to address the drivers of deforestation and to improve forest conservation efforts, quantified through the issuance of voluntary carbon credits.”

The move is in line with AXA IM Alt’s Impact and Biodiversity Strategy, which it launched in 2019, that has c €350m invested in forest restoration and conservation projects and companies globally such as FUNCDAECO in Central America and Forest Carbon in Indonesia.

Jean-Baptiste Tricot, Group Chief Investment Officer, AXA Group (Euronext:CS) , commented, “Forests represent 80% of the Earth’s biodiversity and play an essential role in the fight against climate change. At AXA Group, we are committed to using our capital to help preserve our planet’s natural ecosystems and address climate risk.”

He said that the €500 million was mainly for reforestation projects in emerging countries, enabling a total of 25 megatons of carbon dioxide to be captured or avoided each year, and for meeting part of the Group’s net zero commitments.

In July 2021, AXA IM Alts also announced the acquisition of ClimateSeed, the voluntary carbon off-setting platform, through its Impact Strategy. ClimateSeed connects businesses seeking to offset their carbon emissions with project developers offering carbon reduction projects with high environmental and social benefit

Hiring of experts in natural capital 

AXA IM Alts has recruited a team of experts of natural capital solutions to join the platform; Adam Gibbon, Edoardo Cavallo and Camila Alva Estabridis.

Adam Gibbon has over 17 years of experience designing and implementing investment solutions to address climate change and biodiversity loss.

Edoardo Cavallo is a specialist in emerging markets and has extensive expertise working with investors and entrepreneurs to provide nature-based solutions to climate change. 

Camila Alva Estabridis is a development and environmental economist. She joins having spent more than 10 years in public policy, working with governments and development institutions including the World Bank and the International Food Policy Research Institute.

Local partnership essential

Working with local communities is imperative in these kinds of projects as highlighted by Alexandre Martin Min, CIO, Structured Finance and Impact Private Equity at AXA IM Alts: “People and local market relationships are key to identifying and accessing investment solutions, particularly in such a complex environment.”

He added that “there is an urgent need to grow scalable investment solutions to protect and manage sustainably natural capital, which are relatively nascent in today’s market.”

Technology aids scaling of natural capital markets

Developments are emerging using technology to support the growth of natural capital markets. This week, Singapore based Centre for Nature-based Climate Solutions launched a tool in association with ST Engineering Geo-Insights launched an interactive service to assess the carbon mitigation potential and natural capital in forest areas with geo-spatial mapping and data provision.

Also recently a new partnership between the International Finance Corporation (IFC), Cultivo, Aspiration, and Chia Network, was launched intended to catalyse new investment in nature-based carbon projects and provide traceability via blockchain.

AXA IM Alts is a global leader in alternative investments with over €190 billion of assets under management comprising c. €88 billion of primarily private real estate, over €84 billion of private debt and alternative credit, as well as over €18 billion in Infrastructure, private equity and hedge funds.

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