• Who We Are
    • The Climate Trust
    • Climate Trust Capital
    • Achievements
    • Leadership And Board Of Directors
  • What We Do
    • Action
    • Impact
    • Reforestation
    • Case Studies
  • Financials
  • Media
    • Blog
    • News & Press
The Climate Trust | Climate Trust’s Answer to the Need for Institutional Investments in Climate Change

Climate Trust’s Answer to the Need for Institutional Investments in Climate Change

Scorcher

[This will be the last Scorcher for the summer of 2019.  We will resume in early September.]

Climate Trust recently announced that its Fund I portfolio of carbon offset investments has started to generate its first cash flows. We get asked a lot about why a decades old non-profit would start managing an investment fund.  The answer is pretty simple: institutional investors are starting to pay serious attention to climate risks in their portfolio, which is laudable, but if we want to see real progress on climate change, they should be looking at investment opportunities based on greenhouse gas reductions.   We think the carbon markets are one of the best pathways of generating market returns while reducing emissions. The Climate Trust has been in the carbon markets for a long time – certainly longer than I have – and as an organization, we mirror the evolution of the carbon markets.  Now we think it’s time not just to reflect the current state of affairs, but to lead by example.

There are lots of non-profits focused on climate change, and by and large, they do a great job of education and advocacy.  These are two roles that Climate Trust has been, and will continue to be engaged in, but after two decades of managing carbon offset projects for regulatory and corporate buyers, and working deep in the trenches of carbon transactions, we decided to put our money where our mouth is, so to speak, and tackle the problem from an investor’s perspective.

We believe carbon market risk is not well understood and because of that two things happen: investors sit on the sidelines and carbon is undervalued.  What we aimed to do with our pilot Fund I was to offer potential offset project owners, who were skeptical of carbon markets and the complexity of developing offset projects, a cash investment upfront in return for a portion of future carbon revenues. This allows project owners to sleep at night knowing their project is being well managed and that, whatever happens to carbon markets, they have a sizeable chunk of money squirreled away.  And it offers Fund I investors market rates of return from environmentally beneficial carbon offset projects.

In finance parlance, this is about mis-priced risk.  But that’s easy for Climate Trust to say because we understand the risks.  We believe carbon markets will grow and offsets will increase in value, because that’s what we live and breathe.  In late 2016, we thought it made sense to show the world (if they are paying attention) that, done right, carbon offset investments are a good idea.  Hence, the Fund concept.

Fund I is now fully invested and starting to generate returns, but at $5.5 million we would be naïve to think institutional investors will be thoroughly convinced, so we plan to launch a second $10-15 million fund later this year to demonstrate the concept again at a slightly larger scale.

So why is a non-profit wading into the investment fund world? Because we are an action-oriented organization.  We believe carbon offsets can deliver market rate returns, along with outsized conservation and climate resiliency benefits.  An investment fund is our answer to the maxim:  actions speak louder than words.

Tags
Adaptation
Aggregation
American Carbon Registry
Biochar
Blue Carbon
C-AGG
California Air Resources Board
California Carbon Info
Cap and Invest
carbon offset standards
Carbon Pricing
Carbon-Pulse
Clean Power Plan
Climate Action Reserve
Climate Bonds
Conservation Finance Network
Corporate Social Responsibility
CORSIA
Culture
Dairy Digester
Ecosystem Marketplace
Edible Portland
Energy Central
Environmental Defense Fund
Environmental Justice
EPAF
Farm Power Northwest
GreenBiz
IPCC
Job Announcement
Leadership
Low Carbon Fuel Standard
Milestone
Oregon Carbon Dioxide Standard
Oregon Clean Fuels Program
Oregon Energy Facility Siting Council
Oregon Global Warming Commission
Pacific Coast Action Plan on Climate and Energy
Paris
Portland General Electric
REDD
Renewable Fuel Standard
Renewable Identification Numbers
Request For Proposal
RGGI
Rice
Risk Management
Scientific American
Social Cost of Carbon
Supply Chain
Sustainable Business Oregon
Triple Pundit
USDA Natural Resources Conservation Service
Verified Carbon Standard
Western Climate Initiative
Recent Comments
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT
Proud Member Partners in Diversity
  • DONATE
  • CAREERS
  • CONTACT

©2020 The Climate Trust. Crafted by ILLUSIO