Virtus: Leveraging Private Capital for Global Equality
Gordian Knot Strategies
We are Igniting Climate Solutions: Mobilizing $1 Billion Per Year in Impact Investment by 2030!
Welcome to our June edition of Virtus!
As summer begins to heat up we continue our efforts to mobilize climate finance.
This month, we dive into innovations and financial strategies designed to help us move toward a more sustainable future. In “Our Take,” we write about private capital flows to disadvantaged communities by examining mechanisms and markets such as impact investing, microfinance, social enterprises, and the voluntary carbon market.
Our latest episode of “Untangling Climate Finance” features a conversation with Henry Rowlands, CEO of Soil in Formation (SIF). The discussion focused on how SIF is revolutionizing soil health measurement across the world, and is a must-listen for anyone interested in new approaches to improving agriculture.
In “What We’re Absorbing,” we highlight several significant reports. The first reveals how some major banks are funding the destruction of the Amazon. Another report explores natural capital and innovative strategies for debt-distressed Low- and Middle-Income Countries (LMICs) to leverage their renewable natural capital to enhance creditworthiness and socio-economic development. We also recommend podcast episodes from The ParAqua Podcast and Outrage + Optimism.
As always, we share major climate finance deals, spanning carbon markets, bonds, and biodiversity protection, featuring activities from the World Bank and Microsoft.
Finally, we feature an announcement for the “100&Change” grant from the MacArthur Foundation.
Happy reading and listening!
All the best,
We are Igniting Climate Solutions: Mobilizing $1 Billion Per Year in Impact Investment by 2030!
Global inequality is a pressing and challenging issue that is being greatly compounded by wars, inflation, and a climate that has become more extreme and unpredictable. Unfortunately, there is no one quick fix for this problem. Money, however, does help. The flow of private capital to disadvantaged communities around the globe is fundamental for improving living standards, creating employment opportunities, fostering economic development, and driving the world toward a more just and balanced future.
Disadvantaged communities are often marginalized due to socioeconomic barriers and geographic location, but they can also benefit immensely from targeted private capital investments. This essay explores three mechanisms that are driving capital deployment – impact investing, microfinance, and social enterprises. We also look at the role of the voluntary carbon market.
To read the rest of this article, click here.?
MacArthur announced the launch of a new round of its?100&Change?competition for a single $100 million grant to help solve one of the world's most critical social challenges.?The third round of?100&Change?remains open to organizations and collaborations working in any field, anywhere in the world. Proposals must identify a problem and offer a solution that promises significant and durable change; applications will be accepted online only.
Interested organizations must?register to apply?before 5 p.m. U.S. Central Time on Thursday, August 15, 2024.
Complete applications are due before 5 p.m. U.S. Central Time on Thursday, September 5, 2024.
To learn more, click here.
Client Served in the United States
A global sustainability consulting firm that partners with corporations, governments, and municipalities to accelerate their sustainability transformation and decarbonization efforts engaged Gordian Knot Strategies to develop its?go-to-market strategy that encompassed both carbon removal and carbon sequestration. The work included the development of an?assessment methodology that was applicable and executable for both the client’s internal needs and client-facing needs. We concluded the engagement with an assembly of a prioritized and value-weighted portfolio of removal and sequestration sectors, initiatives, activities, projects, and stakeholders weighed against a set of indicators that included carbon mitigation potential, cost, co-benefits, size of addressable market, enabling and limiting policy regimes, and core competencies.
“Gordian Knot Strategies brought clarity to what was previously difficult for us to define on our own. The goals and vision that we created will serve this program well beyond the next fiscal year, it helped us lay the foundation for a truly innovative program.”
Spencer Plumb – Conservation Finance Program Manager, National Forest Foundation
??? In our June episode, Jay connects with?Henry Rowlands, the Co-Founder, CEO, and Director of?Soil in Formation?(SIF), a U.S. public benefit corporation dedicated to restoring soil health worldwide through advanced soil health measurement technology and a contextual data platform.
They cover Henry’s extensive background in agriculture and soil management, his journey to co-founding SIF, the company’s core objectives, the challenges SIF aims to address with its remote soil sensor and actionable soil health metrics database, SIF’s efforts to integrate their technology into agriculture and soil carbon credit methodologies under the major carbon credit standards, and much more.
Click any of the links below to listen!
领英推荐
June brought great insights with a report on how banks are destroying the Amazon Rainforest while pretending to be green ??and another on integrating renewable natural capital into sovereign debt instruments. We also tuned into the ParAqua Podcast's episode on sub-glacial microbial ecology and Outrage + Optimism's discussion on collective trauma and climate crisis solutions.
?? Where you put your money really, really matters. Stand.earth’s recent report - Greenwashing the Amazon: How Banks Are Destroying the AmazonRainforest While Pretending to be Green - reveals that only one of the top six banks financing oil and gas extraction in the Amazon has an effective policy to protect the region. The report highlights that, on average, 71% of the Amazon is not adequately protected by the environmental and social risk management frameworks of the top five financiers—Citibank, JPMorgan Chase, Itaú Unibanco, Santander, and Bank of America.
?? This month we stumbled upon an interesting report from 2023 - From Links to Linkages: Integrating Renewable Natural Capital into Sovereign Debt Instruments.” This report explores innovative ways for debt-distressed Low-and Middle-Income Countries (LMICs) to leverage their renewable natural capital to enhance credit worthiness and socio-economic development. Presented by NatureFinance and the Sustainability-linked Sovereign Debt Hub (SSDH) the report invites a broader discussion on this subject within the global ecosystem.
??? The ParAqua Podcast, hosted by Joe Money, highlights the latest research in aquatic and marine ecology by interviewing scientists worldwide about their impactful work. In this episode, Joe talks with Professor Trista Vick-Majors from Michigan Technological University about her research on sub-glacial microbial ecology and her recent expeditions to Antarctica and the Alaskan Arctic.
??? On a recent episode of Outrage + Optimism, the hosts connect with Thomas Hübl, the creator of the Collective Trauma Integration Process,? which addresses individual, ancestral, and collective trauma. The episode explores the necessity of working on solutions while still facing the ongoing trauma of the climate crisis. Thomas Hübl is a renowned teacher, author, and international facilitator who blends the wisdom of ancient traditions and mysticism with modern scientific discoveries to navigate complex systems and cultural change.
The month of June brought a wave of climate finance deals spanning from carbon markets to bonds to biodiversity protection. The World Bank, in particular, has been very active. Below is a snapshot!
The World Bank has partnered with HSBC to create a $200 million outcome bond aimed at reforestation in the Brazilian Amazon. This bond will provide up-front financing for projects by Mombak, a company specializing in large-scale reforestation, with returns linked to carbon credits generated. Instead of traditional coupon payments, funds will finance reforestation, supporting the World Bank's sustainable development and climate goals.
C?te d’Ivoire received $35 million from the World Bank for reducing 7 million tons of carbon emissions under the Emission Reductions Payment Agreement (ERPA) with the Forest Carbon Partnership Facility. This payment benefits local communities involved in forest conservation, reforestation, and agroforestry efforts, and is part of a larger $50 million agreement aiming for a total reduction of 10 million tons of emissions. The transaction highlights the effectiveness of financial incentives in promoting sustainable environmental practices and international cooperation.
BTG Pactual's forestry arm agreed to sell 8 million carbon offset credits to Microsoft, marking the largest-ever sale of such credits. Financial details were not disclosed, but MSCI Carbon Markets confirmed it as the largest known carbon dioxide removal credit transaction to date.
A Stripe Inc.-led group, including companies like Alphabet and Meta, made a $48.6 million deal with Stockholm Exergi AB to capture and store carbon. The Swedish utility will use a carbon capture system at its biomass-burning facility, aiming to trap up to 800,000 tons of CO2 annually starting in 2028. The captured CO2 will be liquefied and stored underground in the North Sea.
The World Bank and Solidaridad West Africa signed a $4 million grant agreement to enhance social inclusion in Ghana's Cocoa Forest REDD+ Program. The project will engage 20,000 farmers from 100 communities, including marginalized groups, to improve their participation in climate action and access to emissions reduction benefits. Funded by the World Bank's EnABLE Trust Fund, this initiative promotes social inclusion and gender equality in climate finance, making Ghana the first recipient of such a grant.
The Global Environmental Facility (GEF) Council approved a $500 million package to address environmental issues, with $170 million dedicated to biodiversity loss. This funding, allocated through the GEF Trust Fund, will support 25 projects across multiple continents, including initiatives in Argentina, Namibia, South Africa, and India. Additional funds will address land degradation, climate change, and waste reduction.
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