HSBC Global Asset Management has entered into a joint agreement with climate change advisory and investment firm Pollination Group to establish the world’s largest natural capital manager.
The new firm would be called HSBC Pollination Climate Asset Management and be the first large-scale venture to invest in mainstream natural capital as an asset class.
It would aim to offer investors exposure to global natural capital themes in developed and emerging markets such as forestry, agriculture and water supply, and provide stewardship and evaluation of the investments.
Christof Kutscher would be executive chair of the venture.
The firm aimed to offer its first fund in the middle of next year and would look to raise US$1 billion ($1.38 billion) funded by HSBC as a cornerstone investor, and there were plans to raise a further US$2 billion for a carbon credit one at a later date.
Nicolas Moreau, global chief executive of HSBC GAM, said: “Clients are increasingly focused on environmental matters and this initiative is designed to help them achieve a financial return, while at the same time creating a positive impact on the world’s biodiversity which will be felt for generations to come.
“Through solutions such as this, we’re helping clients achieve their long-term investment objectives, while meeting their increasing demand to actively contribute to a more sustainable world.”
Martijn Wilder AM, co-founding partner of Pollination added: “To reach the goals set in the Paris Agreement we need to originate and fund new approaches that protect nature, at scale. In a global economy that is on a path to rapid decarbonisation, we regularly hear from investors and organisations looking for investment opportunities that will mitigate long-term climate risk.
“In natural capital, we’re accelerating investment in an asset class that can help combat climate change and build biodiversity, whilst also generating long-term returns for institutional investors. Investing in the resilience of nature is investing in the resilience of the economy. Nature is the most fertile investment we have.”