ICMIF Supporting Member Aviva Investors recently announced the launch of an innovative Carbon Removal Fund which will provide institutional investors – including insurers – with access to carbon removal solutions which aim to deliver investment returns, whilst also supporting their long-term net-zero ambitions.
Aviva Investors says its Carbon Removal Fund (‘CRF’, ‘The Fund’) will invest directly in both nature-based and engineered carbon removal solutions that can provide high integrity carbon removal credits as part of a blended portfolio. It has been seeded with an initial commitment from Aviva’s Investment, Wealth and Retirement business.
The Fund has been designed to provide access to investments such as afforestation and restoration projects across areas of peatland and mangroves, as well as commercial forestry, venture capital and private equity-based nature tech, and alternative carbon removal companies. Beyond carbon removal credits and low-carbon investments, Aviva Investors says the Fund will also seek assets and projects that can provide measurable co-benefits, such as biodiversity enhancement, species protection and reintroduction, improved water quality, employment and public access.
The launch of the Fund coincided with publication of a research paper Navigating nature: Opportunities for the investor of tomorrow, which outlines why nature-related risks and opportunities should matter to investors, how investors can identify and engage with nature-related issues, and what actions Aviva Investors is taking to deliver investment outcomes whilst supporting global nature goals.
Speaking about the launch of the Fund, Daniel McHugh, Chief Investment Officer at Aviva Investors, said: “We are incredibly pleased to bring this fund to market, which serves as another example of our ability to match investment expertise with product innovation. Investors have been consistent in calling for investment strategies that can deliver long-term performance whilst also helping them to align with net zero ambitions. We think our Carbon Removal Fund is truly at the forefront of how asset managers can best-capture these opportunities. This is a fund designed for investors with ambitious decarbonisation pathways in place and that are looking for ways to hedge against exposure to carbon pricing.”
Barry Fowler, Director, Insurance & Investment Solutions at Aviva Investors said: “The 2024 edition of our Real Assets Study shows that 57 per cent of institutional investors globally, including insurers, have an ambition to reach net zero but only 47 per cent have confidence in the actions needed for them to meet that goal within real assets. The launch of our new Carbon Removal Fund is designed to support our clients on their respective long-term net zero journeys. It aims to invest in both nature-based and engineered carbon removal solutions that can provide high integrity carbon removal credits as well as targeting investments that could provide a variety of other benefits such as biodiversity enhancement and species protection. We think it is a fund which has the potential to do a lot of good whilst helping our clients, including insurers, develop a measurable path towards net-zero.”
In March, Aviva Investors, along with partners PAR Equity, the Scottish-based forestry investment fund manager, and Scottish Woodlands Ltd, announced the first phase of peatland restoration had been completed as part of its ongoing project at Glen Dye Moor in Aberdeenshire, with approximately 172 hectares of degraded peat having been restored. The project is aiming to restore approximately 1,800 hectares of degraded peat in total as part of a woodland creation and peatland restoration scheme that could capture over 1.4 million tonnes of carbon over its lifetime.
Greta Talbot-Jones, Director of Natural Capital at Aviva Investors and co-Portfolio Manager of the Carbon Removal Fund, added: “Through our Carbon Removal Fund, we will be able to work directly with conservation groups, NGOs, specialist land managers and development partners. That is a vitally important element of this strategy as it should provide clearer, more direct and less diluted reporting lines from the projects we fund on how investment capital is being deployed, which activities that funding is supporting and where, and the impact it is having in terms of real-world outcomes. We are excited to combine our sustainability policy and private markets investment expertise in order to shape the portfolio.”
