Anna Rudgard

As the summer holidays come to an end, I thought now would be a good opportunity to share some nature/biodiversity finance stories from over the last few weeks that people might have missed. 1. Major carbon credit standard setter Verra sanctioned carbon projects for the first time over concerns that the 37 projects had "serious issues". https://lnkd.in/dBcwUFFs 2. The first biodiversity credit methodology has been approved by Cercarbono for use within its credit programme. https://lnkd.in/d6TYJ9aD 3. BNP Paribas has raised €150 million for its Solar Impulse Venture Fund, which will target companies in the energy and ecological transition sectors. It aims to reach €200 million by the end of the year https://lnkd.in/dWvUysWk 4. In other news, yesterday the Institutional Investors Group on Climate Change (IIGCC) and FSDA has published a 'first-of-its-kind' set of expectations for banks on eliminating deforestation https://lnkd.in/dRAEkY26 5. And as we all ramp up for the manic conference season at the end of the year, an advisor to the Colombian government has revealed that COP16 will look to prioritise innovative financial mechanisms and get the finance sector to make "permanent change" with their action. He warned however that the private sector “cannot continue just putting small amounts of money in and hoping that this will compound and build something bigger”. Read more here: https://lnkd.in/dYpH7hKb

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The UK’s Climate Change Committee yesterday published its 2024 progress report on the UK’s path to Net Zero. Lots to digest as always, but some key takeaways for me are: 📉There was a significant fall in emissions in 2023, driven mainly by low demand for gas due in part to high prices. 🛑However, we are off-track for our 2030 and longer-term targets. Just a third of the emissions reductions required by 2030 are covered by credible policies. ⚡️Front-and-centre of the CCC’s recommended actions is to reinstate policies on domestic heating and electric vehicles rolled-back by the previous government, and to tackle planning barriers for heat pumps, electric charge points and onshore wind. Another prominent proposal is to remove levies from electricity prices to encourage a greater shift to electrification. 📣 The new government has committed to action on planning and electric vehicles, but in my view clear gaps remain on domestic heating, and rebalancing electricity prices. 🔋As ever, modelling technology and policy pathways is difficult, and based particularly on assumptions about future costs. Thankfully, costs often come down more quickly than hoped as deployment scales – as the chart below illustrates for EV battery packs. Where this happens, transitions can be easier and quicker to achieve. CCC Report: https://lnkd.in/eWS_NVui

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This important report seeks to provide support and impetus to help pension schemes engage with nature reporting, including through the TNFD framework, and provides examples of best practice. Great work by George Dollner and team.

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A significant governance loophole exists in the current implementation of on-site Biodiversity Net Gain (BNG). While the policy aims to mitigate and offset the impacts of development on biodiversity, the lack of robust tracking and verification mechanisms for on-site biodiversity gains creates a potential for underreporting or even complete omission of the mandatory requirement to protect natural habitats through BNG. For the legislation to achieve its goal of protecting biodiversity this loophole need to be corrected, and it is great to see Natalie Duffus & Sophus zu Ermgassen, with other, highlighting these issues.

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Great overview of biodiversity markets by Pollination and the members of the working group that provided inputs. The report reflects the increasing financial value of impact contribution claims rather than ownership rights in the form of credits. So what is verified is the contribution to biodiversity. This is a welcome difference to carbon credits. https://lnkd.in/egDTue9A

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The UK government should take four steps to reclaim its climate finance leadership position, argues Climate Bonds Initiative CEO Sean Kidney in an op-ed for Sustainable Views. These include expanding sovereign green bonds and leading on green trade. “Early announcements suggest the government is embracing the net zero transition as the massive opportunity — and imperative — that it is,” he says. “There are some simple steps it needs to prioritise to create the sustainable finance ecosystem that is needed to accelerate transition.” Read more below https://lnkd.in/e4xz-Bqs #climatefinance #climateaction #greenbonds

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🌍🌱 #Biodiversity is increasingly in the spotlight for investors—its essential connection to climate change and supply chain resilience makes it a key factor across sectors. With $44 trillion of global GDP dependent on nature, and 🐝pollination in the UK alone valued at £690 million, the economic stakes are high. My colleague, Benjamin S., has just published the first paper in a series focused on biodiversity. Please take a look here (https://lnkd.in/e5EFNqCz) and stay tuned for more insights to come. A cartoon from the pandemic comes to mind, emphasizing the magnitude of the biodiversity challenge we face. Now is the time for action to reverse impacts and mitigate biodiversity loss. #biodiversity #sustainability #esginvesting #responsibleinvestment

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Passive daytime radiative cooling (PDRC) materials could be a game changer for the most vulnerable in the developing world. Whilst this article suggests that voluntary carbon markets could help finance their development, experience tells us that VCMs struggle with all pathways where MRV (Measuring Reporting Verification) draws on assumptions/counterfactuals. It’s more likely that philanthropic funding of research and installations would succeed - in a pure “contribution model”.

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It was pertinent to follow the UK’s NDC announcement at COP29 Azerbaijan yesterday with a really good discussion between former Deputy PM and environment secretary Thérèse Coffey, Head of Labour Together Jonathan Ashworth, and Kate Andrews, Economics editor of The Spectator, on the subject of sustainable futures and the impact of political agendas on #ESG this evening. Things that struck me in conversation included: - Moments of political upheaval present an opportunity to do things differently, and we really ought to make the most of that - #climate change appears in the top 5 concerns of former Conservative voters who voted for The Labour Party at the last election, so for as long as it remains there it’ll remain high on the current government agenda - For all the talk of #InflationReductionAct money going to Republican states in the US, this is outweighed by voters who felt that it actually drove inflation that made life harder for them, even in those states - Staying with the US, promised $2tn of spending cuts across government administrations is going to hit departments like the EPA hard, not just due to the anti-green agenda, but also because of other departments that are due to be protected from cuts. An interesting contradiction from Elon Musk being charged with masterminding such things, yet with an obvious established agenda to promote uptake of #EVs - The government has to prove to investors that the projects they support will actually happen to get the cash flowing in the right direction - no more questionable project finance of schemes with no discernible delivery over a 15 year horizon and an unknown future administration deciding on success etc etc - Tackling the problem of short term stick vs long term carrot is imperative, as well as the conflict of attracting #investment by pushing profits to the private sector and the costs being borne by society - We really ought to have unpegged the cost of energy from gas by now hadn’t we! 😂 Thanks to Jones Day for organising a top panel, Aidan Lawes for ably moderating, and John Crowley for inviting me along! #sustainablefutures #sustainablepolitics https://lnkd.in/dixye8re

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🌲New policy changes set to boost the voluntary carbon offset market which includes credits from forestry investments   In a change of policy the Science Based Targets initiative (SBTi) has stated that it will now allow the use of #carbon offsets to cut Scope 3 emissions. Currently around 4,000 businesses have set emissions reductions targets using SBTi.   Gresham House has been investing in #forestry for over 40 years. Forestry as an asset class continues to deliver strong, stable, and inflation-linked returns. These have been proven through our forestry portfolio’s strong financial track record. However, more recently, the development of voluntary and compliance carbon markets has added the possibility of forestry investment deriving returns from the generation and sale of #carboncredits, as an addition to or replacement of traditional forestry returns.   Key points from SBTi’s statement include:   - SBTi recognises that, when properly supported by policies, standards and procedures based on scientific evidence, the use of environmental attribute certificates for abatement purposes on Scope 3 emissions could function as an additional tool to tackle climate change. - This will entail the definition by SBTi of specific guardrails and thresholds as well as the rules to apply for these certificates and therefore be considered valid for Scope 3 emissions abatement purposes respecting the principles of mitigation hierarchy. - SBTi will not embark in validating carbon credits quality. Other entities are better positioned to deal with this activity. SBTi will enable all validating entities to have clear access and complete understanding of the demand side guardrails and rules established by SBTi for this purpose.

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🌍 COP Highlights for AOSIS: Amplifying the Voices of Small Island Nations 🌊 At this year’s COP, AOSIS has once again been at the forefront, championing the urgent needs of small island developing states (SIDS) in the fight against climate change. Key Takeaways: 1️⃣ Loss & Damage Fund: Progress on operationalizing the fund to support SIDS, recognizing their disproportionate vulnerability to climate impacts. 2️⃣ Renewable Energy Transition: Strong advocacy for scaling up clean energy projects tailored to the unique challenges of islands. 3️⃣ Ocean Resilience: Highlighted the critical role of oceans in climate regulation, calling for greater focus on marine ecosystems and blue economy initiatives. 4️⃣ Financing Adaptation: Emphasized the need for simplified access to climate financing for SIDS, ensuring timely and impactful solutions on the ground. Conclusions: 🔹 AOSIS successfully positioned the Loss and Damage Fund as a lifeline for SIDS, ensuring it remains a top priority. 🔹 Renewed global commitment to fast-track energy transition initiatives and blue economy solutions for island nations. 🔹 Recognition of the need for capacity-building programs to help SIDS better access and implement climate financing. 🔹 Stronger partnerships were forged, with stakeholders committing to collaborative and inclusive climate solutions. This year’s COP also marked a landmark $300 billion pledge from richer nations to help developing countries prepare for and prevent climate change—a significant recognition of the disproportionate burden faced by vulnerable nations like SIDS. Was humbled to participate as IBL Together advocating for the needs of SIDS and global climate justice. A special thank you to Christine MAROT for the support to participate in this amazing conference. AOSIS continues to remind the world that the survival of small islands is a global responsibility. Their leadership is pivotal in pushing for ambitious action, solidarity, and innovative solutions. 💡 “The time to act is now—SIDS cannot wait.” #COP #AOSIS #ClimateAction #SmallIslands #Sustainability #LossAndDamage #BlueEconomy #IBLTogether #COP29 #azerbeijan COP29 Azerbaijan

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A milestone in the development of #biodiversitycredit markets - the International Advisory Panel on Biodiversity Credits has published its framework. The report confirms the consensus around INTEGRITY OF USE I noted yesterday. 'International Offsetting' is not endorsed. Buyers should only use biodiversity credits for: 1. Contribution: Making nature improvements beyond the company's value chain. 2. Compensation: Under strict conditions, including local-for-local and like-for-like, and only in the context of the Science Based Targets initiative mitigation hierarchy - (first avoid, then minimise, restore, and only then compensate for residual negative impacts). Contribution credits allow international funding into a global pool of nature projects. Compensation credits restrict fiunding to projects in close proximity to companies' operations and supply chains. A few other points to note: 👉 There is a role for public and private #naturefinance to develop a pipeline of viable projects generating high integrity credits to satisfy future market demand. 👉 credits can be sold as futures (in advance of issuance or certification) but any impact claims should not be made by the purchaser until after certification (ie. once the impact has been achieved). 👉 Biodiveristy is site-specific rather than "fungible" (tradeable on a like for like basis); the Framework is extremely cautious about secondary markets. Will this approach to self-regulation build trust and foster growth? Interested to hear your views. #environmentalfinance #greenfinance

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𝗔 𝗚𝗹𝗶𝗺𝗺𝗲𝗿 𝗼𝗳 𝗛𝗼𝗽𝗲 𝗔𝗳𝘁𝗲𝗿 𝗖𝗢𝗣𝟭𝟲: 𝗧𝗵𝗲 𝗨𝗞'𝘀 𝟯𝟬 𝗯𝘆 𝟯𝟬 𝗣𝗹𝗲𝗱𝗴𝗲 𝗧𝗮𝗸𝗲𝘀 𝗖𝗲𝗻𝘁𝗲𝗿 𝗦𝘁𝗮𝗴𝗲 While the recent COP16 climate summit might have left many feeling disheartened, there's a positive development worth celebrating: the UK's unwavering commitment to the 30 by 30 target. Steve Reed's staunch support for protecting 30% of land and sea by 2030 demonstrates the UK's leadership on this critical environmental issue. Here's why this is exciting: ● 𝗔𝗰𝘁𝗶𝗼𝗻𝗮𝗯𝗹𝗲 𝗣𝗹𝗮𝗻𝘀: DEFRA's "30 by 30 on land in England" policy paper outlines concrete steps towards the target, including the inclusion of Biodiversity Net Gain (BNG) and elements of the Environmental Land Management Schemes (ELMS). ● 𝗘𝘅𝗽𝗮𝗻𝗱𝗶𝗻𝗴 𝗚𝗿𝗲𝗲𝗻 𝗙𝗶𝗻𝗮𝗻𝗰𝗲: Scotland's "Natural Capital: Market Framework" expands on the financing mechanisms like the Woodland and Peatland Carbon Code, promoting investment in nature. These initiatives showcase the UK's commitment to move beyond pledges and translate vision into action. #30by30 #COP16 #Biodiversity #ClimateAction #UKGovernment #Sustainability #GreenFinance

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🌱 Adaptation and Resilience Finance - What's it all about? 🌱 Climate Bonds' Director of Strategic Programmes, Ujala Qadir joins Climate Proof to talk about our forthcoming Resilience Taxonomy - designed to help companies structure debt instruments supporting adaptation and resilience goals. Ujala discusses why a Resilience Taxonomy is on the Climate Bonds horizon, why it's important, and how it's going to generate huge opportunities for market players in sustainable finance. Check out the podcast on Climate Proof today: https://lnkd.in/exUJ5xNj #resilience #sustainablefinance #greenbonds

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As the momentum to address nature loss accelerates, how should investors begin to assess their portfolio companies' approaches to biodiversity? Join Pensions for Purpose and Joanne Lee, of First Sentier Investors, for an online event to learn about engagement approaches to evaluate water and deforestation risk, at 09:30 BST on 8 May. #Deforestation #Biodiversity #PensionsforPurpose https://ow.ly/bbPT50RiN6I

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As the momentum to address nature loss accelerates, how should investors begin to assess their portfolio companies' approaches to biodiversity? Join Pensions for Purpose and Joanne Lee, of First Sentier Investors, for an online event to learn about engagement approaches to evaluate water and deforestation risk, at 09:30 BST on 8 May. #Deforestation #Biodiversity #PensionsforPurpose https://ow.ly/bbPT50RiN6I

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Really look forward to moderating the PCAF workshop next week at London Climate Action Week. Please join us to learn more about: - the importance and role of Partnership for Carbon Accounting Financials (PCAF) - how it integrates with the wider net zero ecosystem - a signatory disclosure case study - update on the continued development of the PCAF Standard #PCAF #LCAW2024 #rcl24

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Can private finance catalyse global nature conservation and sustainable development? 📈 Jo Anderson, our CEO, recently said in an article with Finance Derivative: 🎙 "Private financing holds immense promise as a catalyst for positive change on a global scale. Only through shared responsibility, sustainable practices, community engagement and integrating IPs and LCs into the global financial system, we can address the complex challenges of biodiversity loss and climate change and pave the way to sustainable global change." Read the full article here 👉 https://lnkd.in/dP8SRsEF #nature #finance #market

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