June 26, 2024 | Read Online

🌱 This week in NatureTech #7

[4-minute read]

Col and Ol

Happy Tuesday!

In today’s edition:

🌳 Microsoft breaking records

🌍️ Funding for Soil MRV

💼 A whole new suite of NatureTech jobs

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🐘 Long Read (1-Min Read)

Microsoft Strikes Two Record-Breaking Carbon Credit Deals (With Nature Benefits)

What happened: Microsoft has entered into two record breaking agreements:

1) Purchasing 8 million carbon removal credits from BTG Pactual Timberland Investment Group (TIG) - marking the largest carbon dioxide removal transaction on record

2) Purchasing 40,000 agricultural soil carbon credits from Indigo Ag, the largest amount ever procured from the company

The TIG Deal:

The TIG deal is part of a $1 billion initiative to conserve and restore deforested areas in Latin America, including Brazil's crucial Cerrado biome.
The project, in the major grain- and beef-producing state of Mato Grosso do Sul, aims to buy up farms and pasture and cover them again with trees. Half the terrain (135,000 hectares) will go to native species such as ipê and jatobá, and the rest to trees for timber, mostly eucalyptus.
Timber makes the project financially viable. Only trees 14 years or older will be cut, mainly for furniture and flooring. Tree-harvesting, which releases CO2, is accounted for in the projects’ carbon offset calculations.
TIG has already invested in 37,000 hectares, planted over 7 million seedlings, and begun restoring 2,600 hectares of natural forest - when credits are generated, they are expected to trade at a premium to traditional reforestation credits.

2. The Indigo Ag Deal:

Microsoft purchased 40,000 carbon credits verified and issued following requirements of the Climate Action Reserve Soil Enrichment Protocol
1. Farmers make practice changes - By adding new or intensifying practices, farmers improve their soil health. Agronomists support farmers through the transition.
2. Credit Generation - Soil samples and on-farm data are collected and anonymized, with results securely shared for verification and credit issuance payment.
3. Pay-out - Indigo facilitates the payout process delivering at least 75% of the average credit price directly to the farmer.

All that glitters is not green: You’ll be aware that the voluntary carbon market has been rocked by criticism over integrity and existing methodologies on the market. A purchase of this nature (pardon the pun!) is another signal that corporates are willing to pay a premium for robust, science-backed carbon credits that have verified co-benefits for biodiversity and local communities (See 20 Million Ton Nature-Based Carbon Removal Buyers Coalition).

Why it matters for NatureTech: An emphasis on verification, particularly of biodiversity co-benefits, will be a demand driver. More than 297 species have been identified in the TIG area, and a new 5-kilometre wildlife corridor to a neighbouring natural forest is expected to benefit local species abundance - but we need to make sure this is the case! (Full story here)

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💬 Snippets for your lift conversations

Finance: Bloomberg is to launch a new offering to provide access to the ESG data (including Nature Data) companies will report under EU's Corporate Sustainability Reporting Directive (CSRD).
Finance: GIST Impact, a leading provider of impact data and analytics, announced an investment from UBS Next, The Swiss bank’s venture and innovation unit.
Big business: Insurance broker Howden Group said it has helped create the world's first warranty and indemnity policy for carbon credits as part of efforts to improve trust in the market.
Big business: France-headquartered climate risk manager AXA Climate and an Irish forestry management software company have teamed up to launch insurance for forestry fires and storms.
Reporting: TNFD, ESRS release joint guidelines on corporate reporting on Nature
Policy: Australian federal and state environment ministers agreed on an ambition to protect and conserve 30% of land and sea by 2030. Canada also launches strategy
Policy: The United States has asked the European Union to delay its upcoming ban on imports of soy, wood and other commodities linked to deforestation as U.S. exporters struggle to be ready in time.
People: Thousands of people marched through central London to urge political leaders to take more decisive action in tackling the UK’s wildlife crisis.
Regulation: The U.S. Environmental Protection Agency will review Texas' oversight of wells used for injecting oil drilling wastewater and carbon dioxide into the ground after "substantial concerns" from environmental groups that the operations are behind a spate of well blowouts, sinkholes and seismic activity.

🎣 Deals

UK based Downforce Technologies raises $4.2 million to measure carbon stored in soil at scale
Two start-ups in our network our raising. Get in touch to hear more.