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SDG Impact Japan and SustainaCraft announced that they are partnering to launch Japan’s first top-tier carbon credit investment fund.
The initiative, called the Nature Commitment Fund, will be managed by SIJ Climate LLC, a subsidiary of SDG Impact Japan, and will generate 10 billion yen in 2024 to fund carbon credit projects that will reduce CO2 emissions in one year. The company aims to raise approximately $88 million. A whopping 9 million tons.
This comes as most experts agree that nature-based solutions (NbS) play a key role in keeping temperature rise below the global warming target of 1.5°C and protecting biodiversity. The fund will focus exclusively on nature-based solutions (NbS).
However, while investment in these projects has been limited to date, demand for high-quality carbon credits backed by robust measurement and monitoring has surged in recent years.
This partnership between SustainaCraft and SDG Impact Japan aims to encourage investment by attracting Japanese companies to NbS projects and build a market ecosystem that fosters high-quality, nature-based credits.
The fund will have strict regulations regarding additionality (guaranteeing that emissions reductions would not have occurred anyway), protection of natural ecosystems, verified credit generation, and expected returns from innovative technology and expertise. We only invest in projects that meet our criteria.
Related: Tokyo Stock Exchange to launch Japan Carbon Credit Market in October 2023
As regulations on greenhouse gas emissions tighten, experts predict a shortage of high-quality credit.
The fund’s strategy is to invest in promising early-stage NbS projects and secure long-term carbon credit capture. This allows investors to receive a steady stream of carbon credits or profit from potential price increases.
Regarding the new partnership, SDG Impact Japan said, “Carbon credits will stimulate the flow of funds from the private sector to NbS by responding to the demand of companies to offset their CO2 emissions to achieve net-zero targets. We believe this is one of the effective mechanisms to promote this.” .
“Achieving a net-zero and sustainable economy will require significant capital and will not be possible without contributions from the corporate sector. This fund supports our mission to accelerate the flow of capital to NbS projects. , while accelerating collaboration with overseas project developers and other market players,” Steinakraft said in a statement.
read more: Amazon Fund secures $640 million in new rainforest conservation commitments in 2023
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