Virtus: The Pro Forma Playbook – Scaling Climate Finance
Gordian Knot Strategies
We are Igniting Climate Solutions: Mobilizing $1 Billion Per Year in Impact Investment by 2030!
Welcome to the February Virtus newsletter!
Like most in our space, we are still reeling from an unbelievably tumultuous beginning to 2025. I wake up each morning asking myself, is it 2028 yet? Nope, still 2024 and the show must go on.
Bobby, Jay, and Sean were in Boulder, Colorado earlier this month for a convening on the Next Generation of Carbon Markets for Climate and Nature. Amid everything going on in the carbon market space, the conversations and energy at the event was electric. More on this further down.
In Our Take, we examine how pro forma tools can scale climate-smart agriculture to meet our urgent financing needs.
On our Untangling Climate Finance podcast, Natalia Dorfman from Kita explains how insurance is de-risking investments in carbon markets.
In What We’re Absorbing, we dive into three new reports including on peatland protection gaps, the framework behind climate policy enablers, and one that resonates with our team in southern Europe, which shows that global warming poses an existential threat to the EU over the next 15 years.
This month’s Opportunity Showcase spotlights projects from the American Forest Foundation , ReSeed.farm , Savory Institute , and the U.S. Endowment for Forestry and Communities .
Finally, in Climate Finance Deals, we highlight key transactions including GCF’s $686M investment, CIF’s $500M bond debut, Kenya’s debt-for-climate swap, and Mirova’s mobilization of a blended finance coalition.
Buckle your seatbelts because if March is anything like January and February, we are all in for a ride. But don’t worry, we’ll still be here!
All the best,
We are Igniting Climate Solutions: Mobilizing $1 Billion Per Year in Impact Investment by 2030!
On February 5 and 6, Sean Penrith , Bobby Sleeth , and Jay Tipton attended the second Boulder Convening for Building the Next Generation of Carbon Markets for Climate and Nature in Colorado. Leaders from NGOs, corporations, think tanks, tech innovators, and more gathered to imagine the voluntary carbon market, charting a future course rooted in integrity, collaboration, and inclusivity. Gordian Knot Strategies was honored to be part of this influential forum, and we look forward to sharing more insights as the post-forum works unfolds. And hats off to the forum organizers - High Tide Foundation , ZOMALAB , and Bezos Earth Fund - for putting together such a powerful event!
For markets to scale effectively, essential building blocks must be in place. Climate finance, in particular, must expand at an unprecedented rate to meet the urgent demands of mitigating and adapting to climate change.?
According to the Climate Policy Initiative (CPI), annual climate finance flows reached nearly $1.3 trillion in 2021/2022, almost doubling compared to 2019/2020 levels. This surge was driven largely by an increase in mitigation finance, which grew by $439 billion during this period. However, despite this growth, current finance flows represent only 1% of global GDP, which is far below what is needed. To effectively combat climate change, annual climate finance must increase five-fold as quickly as possible, from $8.1 to $9 trillion per year through 2030, and then to over $10 trillion annually from 2031 to 2050. Without this scale-up, the world risks falling short of its climate goals, leading to severe economic and environmental consequences.
One sector within this larger financial puzzle is climate-smart agriculture (CSA), which is also often called regenerative agriculture or sustainable agriculture.?
Agriculture is both a major contributor to climate change and a key part of the solution. The food and agriculture sector contributes nearly one-third of global greenhouse gas emissions, yet it remains one of the most underfunded areas of climate finance. Current investment in agrifood systems represents only 4% of global climate finance, with merely a fifth of that funding reaching smallholder farmers. These figures underscore the need for new financial mechanisms to channel capital into CSA at the scale required to drive real transformation.?
Scaling finance for CSA and regenerative agriculture requires multiple solutions, including policy reforms, blended finance, risk-sharing mechanisms, and increased transparency in financial modeling. No single tool will solve the challenge of scaling climate finance, but one essential mechanism that must be employed is the use of pro forma financial tools.
To read the rest of this paper, click here.
Client Served in the United States:
In 2020, we were engaged by a large national endowment in the U.S. to develop an assessment of the impact investment landscape. This led to the development of an Impact Investing Program for the foundation and the launch of a pilot. This was followed by the formal release of Round One of its Impact Program in 2023. Round Two is currently underway with the goal of allocating impact capital in the summer of this year. Our client leveraged our service offering of “climate finance, fundraising, and impact investment” to have us collaboratively develop the program, the RFP, the screening, and the due diligence process to deliver high impact and fiscal returns to the endowment.
“In addition to the obvious expertise in building a financially sustainable impact program, the thing I enjoy most about working with the GKS team is the opportunity for constant learning and growth – all offered with the utmost respect and patience to every individual at every level of our organization.”
Christine Cadigan – Executive Vice President, Carbon Origination, American Forest Foundation
??? In this episode, Natalia Dorfman , CEO and Co-Founder of Kita , explores how insurance is unlocking capital for carbon markets by de-risking investments.
She discusses the challenges of carbon credit delivery, political risks, and counterparty reliability, and how insurance builds trust in climate finance.
Natalia also shares emerging trends and what’s next for Kita Insurance in the evolving carbon market.
Click any of the links below to listen!
The American Forest Foundation will host the first-ever auction for carbon credits from the Family Forest Carbon Program, taking place March 12–19, 2025. This groundbreaking event marks the first nature-based carbon credit auction in the U.S., offering a transparent, efficient way for buyers to secure high-quality credits while supporting rural communities and family forest owners.
Auction Platform Demo – February 27, 1 :00PM ET
To help participants prepare, AFF will offer a live demo of the Auction Platform. This session will walk attendees through:
This is a great opportunity to get your questions answered and ensure you're ready to participate in the auction.
We look forward to your participation!
Below is a curated selection of standout opportunities brought to you by GKS’s valued clients.
ReSeed: Agriculture Carbon Credits
ReSeed.farm partners with smallholder farmers globally, helping to improve livelihoods, protect vital lands, and ensure ecosystem services are properly recognized and rewarded. Through these efforts, ReSeed generates agricultural carbon credits that drive sustainability. Click?here?to explore their projects.
Savory Foundation: Carbon Removal Credits – Uruguay Grasslands Regeneration Project
The Savory Foundation along with the Savory Institute , Pampa Oriental , and Cultivo are now offering?nature-based carbon removal credits?from their Uruguay Grasslands Regeneration Project. This groundbreaking project spans 140,000 hectares across 166 privately held properties, employing Savory’s Holistic Management framework to restore grasslands while supporting local communities and ecosystems.
The project, under Verra’s VM0032 Methodology for Sustainable Grasslands, anticipates an annual issuance of around 152,000 credits, beginning in 2026, and addresses the UN’s Sustainable Development Goals – 8: Decent Work and Economic Growth, 13: Climate Action, 15: Life of Land, and 17: Partnership for the Goals.
To learn more about this project and its impact, click?here.
If you want to connect about the project, email us?at: [email protected]
U.S. Endowment for Forestry & Communities: Impact Investing Program
The U.S. Endowment for Forestry and Communities ?has announced an RFP for their Impact Investing Program. The program seeks to deploy up to?$5 million in 2024 through impact investments?in companies, funds, or projects that advance systemic, transformative, and sustainable benefits for the health and vitality of?working forests and forest-reliant communities in the United States.
Gordian Knot Strategies is supporting the development of the Impact Investing Program. We encourage you to read the Endowment’s press release?here, review the RFP materials?here, and share with your network.
This is a great opportunity for companies and project developers seeking capital on reasonable investment terms. Please note that this is not a grant making endeavor.
An informational webinar about the RFP response process was held on January 15, 2025. A recording of the webinar is available?here.
Deadline for final submission:?Thursday, March 13, 2025 by 5pm PST
Please direct any questions to:?[email protected]
This month, we went report heavy on our material absorption, soaking in a wealth of fantastic insights (both good and bad).?
?? Peatlands are one of Jay’s favorite topics — he even dedicated his master’s thesis to them — and he believes these vital ecosystems often fly under the radar. A new report by Austin et al, titled "Mismatch Between Global Importance of Peatlands and the Extent of Their Protection," reveals that although peatlands cover just 3% of Earth’s surface and store more carbon than all the world’s forests, only 17% are protected globally. These findings are a wake-up call for policymakers, emphasizing the urgent need for robust conservation measures, enhanced Indigenous stewardship, and innovative funding strategies to safeguard these critical carbon sinks for our climate and communities.
?? Climate policy is another hot topic on our radar, and a new report by Montfort et al titled "Political enablers of ambitious climate policies: a framework and thematic review" delivers a fresh, solution-oriented approach. The authors argue that rather than just focusing on barriers, we should spotlight six key political enablers that catalyze ambitious climate policies - shifting the narrative from obstacles to opportunities. Bolstered by a case study on Germany and the EU’s emission trading systems, this framework offers a game-changing perspective for accelerating progress toward the Paris Agreement.
?? A few of our GKS team members, especially those living in southern Europe, find this report particularly resonant. The National Interdisciplinary Climate Risk Assessment - produced by Germany’s BND, Bundeswehr University Munich, the Potsdam Institute, and think tank adelphi - warns that global warming poses an existential threat to the EU over the next 15 years. The report details how rising temperatures will drive migration, spike food prices, and destabilize political and economic systems - particularly in the vulnerable southern EU - underscoring that even a tenth of a degree less warming makes our lives safer and calls for urgent, socially responsible climate action.
Every week, climate cash is making waves (but never enough). We're always on the hunt for the hottest deals. Check out these headlines. Click the title for the full scoop.
GCF just dropped nearly $687 million (or a whopping $1.5 billion with co-financing) on 11 climate projects across 42 countries - supporting 115.5 million people and cutting 45 million tonnes of CO2. Plus, with first-time deals in Serbia and Togo and a new regional hub, they're taking climate finance local.
CIF's new Capital Markets Mechanism made a splash on the London Stock Exchange by raising $500 million through its debut bond - six times oversubscribed. The deal shows strong investor appetite for clean energy projects and sets the stage to tap billions in co-finance for climate action.
Kenya is pulling off its first-ever debt-for-climate swap by building a 300MW Bogoria Silale geothermal plant to settle a €60 million loan to Germany. In a debt-for-climate swap, a country trades debt relief for green investments. According to an AfDB report, if Kenya finishes the project, Germany will forgive the debt.
Mirova launched its second-generation Sustainable Land Fund (MSLF2), mobilizing a blended finance coalition to boost investments in regenerative agriculture, agroforestry, and sustainable forestry across the global south. Backed by public, private, and philanthropic players including the SDG Impact Finance Initiative, Abeille Assurances, Allianz France, and BNP Paribas Cardif, the fund aims to raise €350 million by the end of 2025. The Rainforest Alliance is also on board to secure a robust project pipeline and amplify local, nature-based solutions.
Want to unsubscribe?
Click here.
Want to receive this newsletter?
Click here.
If you want to see more of our content, check out our weekly dispatch, Sliced.
Click here.
Interested in connecting? We would love to hear from you!
Contact us?at [email protected]