Binyamin Ali

As the likes of Nuveen, HSBC and CPP Investments have aligned themselves to make long-term ‘natural capital’ investments, the required offset markets have grown in number too.

The European firm has taken €150m from two Dutch insurance companies for the UN Sustainable Development Goals-aligned vehicle.

A trickle of fund managers choosing to link carried interest to their impact and ESG targets is good news for private markets, showing the industry is serious about its sustainability goals.

The GP says it will not receive 50% of its carried interest if it fails to meet new fund’s impact goals, which will be verified by an independent third party.

The asset will be managed to pursue an impact-first approach and should be able to deliver competitive returns, says chief sustainability officer Brian Kernohan.

Universally recognized authenticity checks, price points created by non-arbitrary forces and a way to reward those already farming sustainably are needed – this is a market with a lot left to prove.

Public market flotations by highly coveted and well-funded ag start-ups have followed in the footsteps of Beyond Meat’s 2019 IPO, adding to the growing signs of industry maturity.

Bamboo Capital Partners’ $500m SDG fund has continued to attract interest because its returns are now closer to what’s available in wider capital markets, says managing partner Florian Kemmerich.

Environmental stakeholders are accustomed to thinking about natural benefits such as pollination as a ‘service’ – investors will need to do the same to grasp the natural capital opportunity.

HSBC Pollination will launch a $1bn fund that will invest in forestry and agriculture as well as a $2bn carbon credit fund that will invest in carbon abatement assets such as rain forests.