Fund manager Octopus Investments is moving into the carbon credits market with what it is calling a Natural Capital Strategy. It aims to buy land-based assets which have conservation potential. The main focus is going to be on UK assets for the time being.
Octopus Investments says it wants to generate revenues from both the sale of carbon credits and also some other revenue streams. Among the other activities are property restoration, biodiversity net gain credits, ecotourism, renewable energy and regenerative agriculture.
Carbon credits will be yielded from land management and conservation activity. The aim is to deliver attractive and sustainable returns for investors while at the same time supporting the UK’s transition to net zero.
Who are Octopus Investments?
Octopus Investments is a part of the Octopus Group, which is a B Corp-certified investment company for investors who believe their money can be a force for good.
Currently Octopus has approximately £13bn in assets under management, but is charting a course to grow this out to £50bn by 2030. Natural capital forms a key part of the firm’s growth plans. It has already demonstrated its green investment credentials with the launch of the Octopus Sustainable Infrastructure Fund.
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Octopus is focusing on high integrity carbon credits which can deliver emissions savings and can finance nature-restoration and carbon-removal projects.
The firm has appointed Alex Godfrey to lead the Natural Capital Strategy, who joins Octopus Investments from property giant Savills where he was also head of natural capital. He said he felt that natural capital could prove to be a big win for Octopus, as it is a specialist area in an underdeveloped part of the market, which is expected to grow exponentially.
Octopus Investments has already demonstrated its success with other ESG strategies, investing in areas like solar power and energy transition.
“Climate change is the biggest challenge of our time and while reducing carbon emissions to reach net zero targets is key to addressing this challenge, we will not reach this goal by decarbonisation alone,” said Mike Toft, Senior Fund Manager at Octopus Investments. “We know that more high-quality carbon credits need to be generated to help offset carbon and accelerate our net zero efforts.”
Tofts added that companies want to do the right thing for all stakeholders; the planet, their customers, shareholders and employees. “With their own net zero targets approaching, they too are increasingly realising that offsetting will need to play a critical part in that journey,” he explained. “We are aiming to meet this demand through our holistic, nature-based strategy and with Alex now on board with his on the ground conservation experience, we are even better placed to do so.”