Image by Rudy and Peter Skitterians
Fall is the time of transformation, and in the spirit of this, we’ve introduced some updates to our Virtus newsletter, including new sections. We trust you’ll find them interesting!
Our latest Sliced essays have sparked intriguing discussions among our readers. We’re delighted to welcome new clients and projects to our ever-growing roster and portfolio. We’re excited to kick off these fresh collaborations and put climate finance into action.
Remember, we’re just a message away via email or LinkedIn if you ever want to connect.
Gordian Knot Strategies
We are Igniting Climate Solutions: Mobilizing $1 Billion in Impact Investment by 2030!
“Net-zero” is one of the most crucial terms in modern times, and it might ultimately go down as the most pivotal in human history.
In the context of a company, net-zero refers to reducing the greenhouse gas emissions (GHG) emitted via business activities to as close to zero as possible. Any residual emissions that cannot be reduced by the company can be “offset” through a variety of ways. One method includes purchasing carbon credits from projects that remove GHG from the air e.g., biochar or direct air capture (DAC).
For example, SBTi – the current leader of corporate net-zero strategies – requires that a company must first reduce their business activity emissions by over 90%. Then the company can use permanent carbon removal and storage methods to offset the remaining 10%. According toSBTi, once a company accomplishes its science-based reduction target and effectively neutralizes any lingering emissions, it can then claim to be net-zero.
The Importance of Achieving Net-Zero
An excess of GHG in the atmosphere leads to global warming, throwing off the delicate balance of our planetary systems and making Earth significantly less suitable for life.
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Image by Mohamed Hassan
We feel privileged to work with awesome clients who dedicate their time, energy, and resources to a wide range of meaningful projects worldwide. Because of that we’ve chosen to start highlighting both our clients and the collaborative efforts we’ve engaged in to assist them in achieving their goals.
Client Served in Africa:
GKS was engaged by a multi-national corporation to provide advisory services on how best to develop a carbon offset portfolio that would support the company’s science-aligned carbon neutrality goals and help address their hard-to-abate emissions. Guiding principles included prioritization of: 1) nature-based, carbon removal opportunities, 2) activities that aligned with the company’s values and had strong co-benefits for the landscapes and communities in which it operated, and 3) practicality for building the portfolio within the established budget and timeframe. To serve these goals, GKS developed an offset screening framework, conducted a market assessment to evaluate near-term acquisition opportunities, and analyzed the potential for direct carbon offset development under existing, credible methodologies. This work resulted in a set of strategic recommendations on how to balance offset acquisition and direct development and the appropriate roles and structures given the company’s internal resources and expertise. GKS provided a 10-year roadmap, including milestones for re-assessment, for implementing the recommended strategy. We were subsequently re-engaged and are guiding the company through the first step in the process.
The two connected in August to discuss her new book Pricing the Priceless: The Financial Transformation to Value the Planet, Solve the Climate Crisis, and Protect Our Most Precious Assets. They also talk about her work on both the voluntary and regulatory carbon markets, and how she thinks carbon markets are key to decarbonization.
📚 Our Fragile Moment: How Lessons from Earth’s Past Can Help Us Survive the Climate Crisis is the new book from legendary climatologist Dr. Michael E. Mann. This remarkable literary voyage endeavors to guide readers in comprehending the exquisite and finely tuned nature of our singular home, and how human conduct has disrupted its perfection. Dr. Mann issues a call to action for everyone to take heed before our once-immaculate home loses its luster for us.
📚 Multi-talented climate voice, Akshat Rathi, recently published his new book Climate Capitalism: Winning the Race to Zero Emissions and Solving the Crisis of Our Age. Amidst prevailing climate pessimism, Rathi brings forth a much-needed ray of optimism by illustrating examples of how the world already possesses the capitalist tools required to combat the climate crisis while forging a greener and more prosperous future for all.
🎙️ Let’s continue riding the Dr. Michael E. Mann train! Last month, Dr. Mann was a guest on Vox’s podcast “Today Explained.” He presented “the six D-words of climate change” to help listeners better understand the past, present, and future conversations about climate change.
Photo by Skyler Ewing
While climate finance deals in October didn’t match the level of those in September, there were still some excellent transactions worth highlighting.
IFC made a strategic investment in CRDB Bank Plc’s inaugural green bond. This investment in Tanzania’s largest commercial bank, representing 29.3% of the bond, will play a pivotal role in curbing greenhouse gas emissions and strengthening climate change adaptation efforts. The bond’s issuance on the Dar es Salaam Stock Exchange successfully raised $68.3 million, demonstrating an impressive oversubscription rate of 429%. These funds will be channeled towards initiatives promoting sustainable development, such as climate-smart agriculture and various eco-friendly projects in water, forestry, renewable energy, and green building sectors.
Switzerland and the United States jointly donated $8.4 million to Brazil’s Amazon Fund for rainforest preservation. Switzerland gave 5 million Swiss francs ($5.4 million), and the U.S. provided $3 million, part of President Biden’s $500 million commitment over five years to combat deforestation, as pledged by Brazil’s President Luiz Inacio Lula da Silva for zero deforestation by 2030.
Finland plans to enhance biodiversity with EU funding, aiming to make projects financially sustainable. They will launch a €50 million biodiversity project, with €30 million funded by the EU’s LIFE program. The project also seeks to support regional biodiversity efforts, restoration activities, and the green economy through job creation.
The World Bank has broadened its focus to incorporate climate change and is moving forward with reforms that may unlock more funding and lower-cost loans for environmental initiatives. President Ajay Banga highlighted measures aimed at expanding the bank’s lending capacity by up to $15.7 billion annually. This additional funding will facilitate the realization of the bank’s newly endorsed vision statement.
Bloomberg Philanthropies introduced a $50 million initiative, the Bloomberg Cities Ideas Exchange, to aid cities in addressing global challenges like climate change. This program will provide grants for startup costs, technical support, and knowledge-sharing through trips and webinars, leveraging effective strategies from other cities worldwide.
As part of President Biden’s Investing in America agenda, the Biden-Harris administration announced $3.46 billion for 58 projects in 44 states to enhance electric grid resilience. Funded by the Bipartisan Infrastructure Law, these projects will attract over $8 billion in investments, ensuring reliable and clean electricity nationwide while addressing climate-related challenges. These initiatives, supporting the Justice40 Initiative, will add 35 gigawatts of renewable energy, fund 400 micro-grids, and create union jobs in partnership with the International Brotherhood of Electrical Workers (IBEW).