Impact Investing and Carbon Finance
Looking for impact investing opportunities in the voluntary carbon market?
Compliance and voluntary carbon markets play an essential role in allowing the international community to limit global warming to 1.5°C. Among various instruments to reach this goal, these two markets have contributed to channeling the necessary capital into low-carbon technologies and business models across the globe.
The compliance market guides the actions of national governments and industrial sectors that must implement legally required reduction pathways, while the voluntary carbon market (VCM) covers climate projects primarily in the Global South that take place on a voluntary basis among companies, project developers, NGOs, investors, and local communities. Both markets operate on separate accounting frameworks and are therefore complementary to each other.
According to Ecosystem Marketplace, the VCM has grown to a size of over USD 2 billion in 2021, based on registered transactions. However, much more capital needs to flow into impactful projects on the ground, to reach effective climate action. Most recent estimates indicate a need for climate investment of USD 1 trillion per year in external finance that will be needed by 2030 for emerging markets and developing countries. To address this enormous gap, more private institutional capital needs to flow into the VCM.
The VCM will likely continue to grow from strength to strength, this growth is strongly underpinned by corporate climate action and market developments, continued adoption of frameworks such as the Science Based Targets Initiative (SBTI), Net Zero pledges, the Task Force on Climate-Related Financial Disclosures (TCFD), and maturing transparency and governance standards e.g., the Taskforce on Scaling Voluntary Carbon Markets (TSVCM) and the Voluntary Carbon Markets Integrity Initiative (VCMI).
Why carbon finance and impact investing opportunities matter
Since the voluntary carbon market (VCM) has been rapidly scaling over recent years, so has the interest of investors to participate in the market, and to develop impact investing activities more broadly. This trend is accelerated by sustainable and green finance regulation in various markets including in the EU, UK, and the USA, requiring the finance sector to publicly report on sustainability, green and impact-related activities. In essence, investors want to engage in the simple fact that impact investing makes sense – financially, socially, and environmentally.
According to the Global Impact Investing Network (GIIN), the worldwide impact investing market has grown to over USD 1.1 trillion in 2022. ClimatePartner Impact applies the approach of the GIIN, as the largest global platform for impact investing to create investment opportunities, set targets, measure outcomes and report on impact.
Our services in carbon finance and impact investing
ClimatePartner Impact offers carbon finance and impact investment opportunities with a focus on price hedging, attractive financial returns, and transparent impact reporting.
- Structured Carbon Finance: We create investment vehicles to secure high-quality verified emission reductions. Such investment vehicles generate a financial return for institutional investors, paired with regular reporting on the generated impact on the ground.
- Carbon and Social Impact Funds: We offer tailor-made vehicles for institutional investors, focusing on social impact projects. Investors benefit from our holistic expertise including risk analysis, an attractive financial return, impact reporting and a guaranteed carbon credit off-take. For this purpose, we collaborate with asset managers who set up and handle the fund vehicles, while we focus on providing and maintaining highest-quality projects.
- Blended Finance and Impact Reporting: We are also seeking to cooperate with public finance institutions, development agencies and development banks to de-risk selected climate actions projects and increase their financial viability and long-term economic success.
Reach out if you are looking for attractive financing and institutional investment opportunities in the voluntary carbon market with real impact.
ClimatePartner and ClimatePartner Impact are members and associated companies to several leading climate action and impact investing initiatives and groups: