The Copenhagen-based Hempel Foundation has launched the Impact Investment Initiative for Biodiversity on Land, which has made its first investments in two funds that back sustainable plantation forestry and reforestation in Southeast Asia and Latin America.
The charity, with nature one of its key focus areas, is getting increasingly involved in biodiversity projects as it seeks to contribute to bridging the global biodiversity funding gap.
“This initiative aims to invest in the preservation, sustainable management, and restoration of tropical forests – the most biological diverse terrestrial ecosystems on the planet,’ Hempel said in an announcement Monday.
It did not specify how much money the initiative will administer and did not immediately respond to queries, though said its investments will be made in funds involved in tropical forest and biodiversity protection.
“These investments not only help to address the biodiversity crisis, they also reduce the impact of the climate crisis by lowering CO2 emissions, absorbing CO2 from the atmosphere, and helping vulnerable communities in the Global South to adapt to a changing climate,” Hempel said.
The new initiative’s two first investments will be in New Forests’ Tropical Asia forest Fund 2 (TAFF2) and Timberland Investment Group’s (TIG) $1 billion Reforestation Fund in Latin America.
Sydney-headquartered New Forests had raised $120 mln for TAFF2 when it launched in March last year, through which it aims to capitalise on long-term sustainable plantation forestry investment opportunities in Southeast Asia.
Upon launching the fund, New Forests – which is a major player in forestry-based carbon offset projects in the Asia-Pacific region – said it wanted to establish a diversified portfolio of assets in Cambodia, Indonesia, Laos, Malaysia, Thailand, and Vietnam.
TIG’s fund, meanwhile, launched in Oct. 2021 and seeks to raise $1 billion over five years in order to fund large-scale investments in sustainable plantation forestry in Latin America.
The fund buys up large areas of degraded land, and then reforests and protects some of it while managing tree plantations on the rest.
Anders Holm, Hempel’s executive director, said the foundation had screened over 40 funds before settling on the two.
“We recognise that philanthropy can catalyse further investments, and that impact investments provide a new and growing opportunity to sustainably finance biodiversity conservation at scale,” he said in a statement.
“We therefore want to build on our philanthropy by investing in low to medium risk impact investment funds that have the greatest potential to support biodiversity in the areas of the world where we are already funding conservation projects.”
The Hempel Foundation has for years provided philanthropic support for tropical forest conservation projects in Latin America, mainland Africa, Madagascar, and Indonesia.
In October it announced it had 775 hectares of natural and agricultural land in Lolland in Denmark, which it plans to convert to wild nature.
The area is adjacent to a 217-ha bird reserve, and combined they are set to become one of Denmark’s most important natural biodiversity areas, especially for birds, insect, and other free-moving species.
By Stian Reklev – stian@carbon-pulse.com
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