Octopus Investments has launched a natural capital strategy aiming to generate high-integrity carbon removal credits through conservation and land management.
The strategy – led by recently-appointed investment director Alex Godfrey (pictured) – will look to provide investors with attractive, sustainable returns and the opportunity to accelerate the transition to net zero by kick-starting the natural capital economy.
The strategy will initially have a UK focus, looking at the acquisition of land-based assets with conservation potential, exploring ancillary revenue streams tailored to each project and locality: whether this is property restoration, biodiversity net gain credits, regenerative agriculture, ecotourism or renewable energy.
Announcing the launch, Godfrey said: “I’m excited to be part of this next priority area for Octopus with natural capital having similar characteristics to previous big wins in solar power, care homes and the energy transition; a specialist area in an underdeveloped part of the market that is expected to grow exponentially. I look forward to bringing this to life, creating impact and generating sustainable investment returns for our investors.”
Reporting to Mike Toft, senior fund manager, Godfrey is charged with honing the Octopus approach to high-quality credits, focusing on data-led monitoring, co-benefits of biodiversity, improving the ecosystem, permanence and transparency. He will also play a key role in fostering strong relationships with local communities and sourcing best-in-class, trusted operators to partner with, ensuring the strategy is built on quality conservation.
Octopus Investments is targeting £50bn in assets under management by 2030, with a large proportion set to come from the expansion of the institutional business. In recent years Octopus has launched several funds, including the Octopus Sustainable Infrastructure fund and the Octopus Affordable Housing fund. The move into natural capital is the next part of this plan.
Toft added: “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. We know that more high-quality carbon credits need to be generated to help offset carbon and accelerate our net zero efforts.
“We also know 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. 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.”
