Virtus: Financial Tools to Fight Climate Change
Welcome to our February edition of Virtus! As we navigate through the shortest month of the year, our focus on climate finance and carbon markets remains steadfast and more critical than ever.
In this issue, we explore the intersection of philanthropy and impact investing in “Our Take”, offering ideas for why joining these types of initiatives, when possible, can offer greater influence and resource management.
This month we also released our seventh episode of Untangling Climate Finance! Jay hosts two executives from Mast Reforestation to discuss stream financing, Mast’s recent deals, and how they are working to reshape landscapes after unfortunate wildfire destruction.
Join us this month as we illustrate how different financial mechanisms can drive meaningful change in our fight against climate change.
Happy reading and listening!
All the best,
Gordian Knot Strategies
We are Igniting Climate Solutions: Mobilizing $1 Billion Per Year in Impact Investment by 2030!
In the face of a massive climate finance shortage to address the rapidly growing climate crisis, the role of impactful financial tools to trigger positive change grows more critical.
There is a spectrum of financial instruments available to help manage the multifaceted challenges of global warming, environmental protection, and biodiversity loss. Chief among these is philanthropic capital and impact investing.
The strategic deployment of philanthropic funds and impact investments can catalyze significant environmental actions, support innovative solutions, and foster a collaborative approach toward achieving sustainable outcomes. To go a step further, when possible, blending philanthropy and impact investing strategies can be a powerful way to achieve even greater outcomes.
By examining the synergy between philanthropy and impact investment, we can better understand how these financial mechanisms can be optimized to propel the global environmental agenda forward, highlighting the potential for these tools to drive change and contribute to a more resilient and equitable planet.
To continue reading, click here.
Client Served in the United States
Over the course of a year-long engagement, we had the pleasure of serving a well regarded entity in the US that has the prime focus of reforesting America. The client needed an effective go-to-market strategy that would position reforestation favorably for landowners, investors, and other project developers. We facilitated an extensive working group over the course of several months that included science, forestry, commercialization, policy, and demand-side expertise. This informed the final go-to-market strategy assembled for the client, now engaged in providing access to financial and technical resources needed to design and implement climate-adapted reforestation projects that meet landowner-specific social, cultural and ecological goals across the country.
“It’s been fantastic working with GKS. The IFNF grant program has benefitted from GKS’ big-picture strategic thinking, and ability to connect strategy to less exciting but equally as important tactical decisions. Of the many positives, I’ve most appreciated GKS’ willingness to re-think assumptions, respond to group feedback and/or research takeaways, and adapt accordingly. They recognize the importance of problem identification, take time to vet assumptions with a range of experts, and are constantly brainstorming new ideas and connecting dots across sectors. GKS brought subject matter expertise, open and questioning minds, and intellectual enthusiasm for big questions and solutions to their work with the IFNF team – it was fun!”
Nathalie Woolworth – Conservation Finance Program Manager, U. S. Forest Service
🎙️ In our February episode, Jay speaks with Grant Canary (Founder & CEO) and Jonathan Loevner (VP, Carbon Markets & Policy) of Mast Reforestation to discuss the post-wildfire reforestation work their company is doing.
They discuss a recent stream financing agreement they made which is allowing them to expand their carbon credit projects. They share their insights on scaling, carbon credit generation, the issues they face, and their company goals in helping with reforestation.
Click any of the links below to listen!
📺 For the past few years, youth around the world have been at the forefront of the climate change battle. “YOUTH v. GOV” on Netflix captures one of those stories. The film chronicles the groundbreaking lawsuit Juliana vs. United States, filed by 21 young activists in 2015. They accuse the U.S. government of deliberately violating their constitutional rights by contributing to the climate crisis. This film follows their historic fight to alter the future by holding the government accountable for its inaction on climate change. It is directed by Christi Cooper.
🎙️ “Carbon Removal Newsroom” by Nori hosts a discussion for both skeptics and proponents of ambitious Carbon Dioxide Removal (CDR) goals. There have been a slew of recent studies that highlight the risks of extensive CDR, questioning the sustainability of removing 10 gigatons of CO2 per year. This leads to debates among the Policy Panel over achievable targets, ranging from 1 to 28 gigatons, considering land and energy constraints. The panelists dive into the challenges and necessity of large-scale CDR amidst ongoing emissions exceeding 40 gigatons annually.
✍️ With the impacts of global warming becoming more and more obvious, many of us find ourselves wondering what we can do to help. Well, Bloomberg Green answers this with their recent article “One Simple Change to Reduce Your Climate Impact? Swap Out Beef.” The article offers evidence that by switching from beef to an alternative protein for even a single meal, an individual can reduce their daily dietary emissions by up to 50%. That is because the environmental impact of beef production is particularly significant, with around 1.5 billion cows globally. Approximately 13 million square kilometers (3.2 billion acres) of land, or one-quarter of all agricultural land, is dedicated to rearing these cattle and buffalo and growing their feed. So cutting down on beef consumption to help Mother Earth? Hmm…that’s not too difficult of a task!
Below is a snapshot of some of the most interesting climate finance deals and commitments over the past month.
Catona Climate to Deliver Microsoft 350,000 Tonnes of Carbon Removal through Agroforestry Project
Microsoft is at it again! The world’s leader in carbon removal credit purchases announced a six-year deal with Catona Climate for 350,000 tonnes of credits from an agroforestry project in Kenya, in partnership with Trees for the Future. This initiative aligns with Microsoft’s aim for carbon negativity by 2030 and involves 15,000 farmers in Homa Bay creating forest gardens for sustainable agriculture, enhancing yields, conserving biodiversity, and improving food security without harmful chemicals.
Deputy Secretary of Agriculture Xochitl Torres Small revealed a $20 million investment by the Biden-Harris Administration to aid federally recognized Tribes and Alaska Native entities, aligning with President Biden’s Investing in America initiative. Funded by the Inflation Reduction Act, these competitive grants from the USDA Forest Service are intended to enhance forest resilience, climate mitigation, water quality, and carbon sequestration among other environmental benefits.
EC Approves €6.9 Billion State Aid for H2 Infrastructure
The European Commission approved €6.9 billion ($7.4 billion) in state aid for hydrogen infrastructure projects across seven EU countries. The IPCEI Hy2Infra initiative, involving France, Germany, Italy, the Netherlands, Poland, Portugal, and Slovakia, will benefit 32 companies, including five SMEs, across 33 projects focusing on electrolysis, pipelines, storage, and handling terminals. This funding is anticipated to leverage an additional €5.4 billion in private investments, supporting the creation of 3.2 gigawatts of electrolyzer capacity, 2,700 kilometers of pipelines, 370 gigawatt-hours of hydrogen storage, and infrastructure to manage 6,000 tonnes/year of liquid organic hydrogen carriers.
Japan to Donate to the Amazon Fund for the First Time
Japan will contribute US $2.61 million to the Amazon Fund. This marks Japan’s first donation to the fund, which supports the Amazon’s protection and sustainable development. This follows significant contributions from the US ($500 million), the UK ($100 million), Norway ($50 million), Germany ($21 million), and Switzerland ($5 million).
d.light and Chapel Hill Denham Ink $7.4M Deal for Solar Projects in Nigeria
d.light and Chapel Hill Denham secured $7.4 million in securitized financing to boost off-grid solar projects in Nigeria. The investment from Chapel Hill Denham’s Nigeria Infrastructure Debt Fund will expand d.light’s affordable solar products for low-income families. The deal is a key step in Nigeria’s sustainable infrastructure development.
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