- The transaction is the largest known carbon dioxide removal
credit transaction to date, according to MSCI Carbon Markets
data
- The credits will be delivered from the BTG Pactual Timberland
Investment Group’s $1 billion reforestation and restoration
strategy in Latin America, for which Conservation International
serves as Impact Adviser
- The transaction highlights the significant potential for
restoration in Latin America to deliver climate impact alongside
benefits for biodiversity and communities
Today, the BTG Pactual Timberland Investment Group (TIG)
announced the execution of a carbon offset credit transaction with
Microsoft. Under the terms of the agreement, TIG will provide
Microsoft with up to 8 million nature-based carbon removal credits
through 2043.
The transaction is the largest known carbon dioxide removal
credit transaction to date, according to MSCI Carbon Markets data.
The credits will be delivered from TIG’s $1 billion reforestation
and restoration strategy in Latin America, for which Conservation
International serves as Impact Adviser to help TIG achieve positive
environmental, climate, and social impacts.
The strategy focuses on the conservation, restoration, and
planting of deforested and degraded properties in selected regions
in Latin America, including the Cerrado biome in Brazil, one of the
most biodiverse seasonally dry ecosystems in the world.
Approximately half of the Cerrado has already been converted to
other uses, and the biome continues to face high rates of
commodity-driven deforestation.
With Conservation International’s support, the strategy aims to
protect and restore approximately 135,000 hectares (more than
330,000 acres) of natural forests in deforested landscapes. The
strategy also seeks to plant millions of trees in sustainably
managed commercial tree farms, independently certified to Forest
Stewardship Council (FSC)™ standards, on another approximately
135,000 hectares of previously deforested and degraded land. To
date, TIG has invested in 37 thousand hectares, and has already
planted more than 7 million seedlings and initiated restoration of
approximately 2,600 hectares of natural forest.
“From its inception, we have aimed to break new ground with this
strategy, both in terms of scale and impact. We are proud to work
with industry leaders like Microsoft, who are committed to
purchasing high-quality removal credits and retiring them as part
of a comprehensive corporate decarbonization strategy. Microsoft’s
leadership has helped build the high-integrity carbon offset
market. They are blazing a trail that other companies can follow,”
said Mark Wishnie, Chief Sustainability Officer of TIG and head of
the firm’s reforestation strategy.
“Institutional investors have a critical role to play in
delivering nature-based solutions at a scale that matters for
climate and biodiversity. The scale of the native forest
restoration and sustainable timber production that TIG seeks to
deliver with our reforestation strategy is what enables a carbon
removal credit transaction of this size,” said Gerrity Lansing,
Head of TIG.
“This commitment from Microsoft is proof positive that we don’t
have to compromise our future for our balance sheets. We can
restore degraded tropical forests and remove carbon at scale; we
can mobilize private capital; and we can protect nature without
abandoning economic production — enhancing our biodiversity,
livelihoods, and climate all at once,” said Dr. M. Sanjayan, CEO of
Conservation International. “This is a new era for conservation,
and we should applaud both Timberland Investment Group for scaling
new ideas and Microsoft for embracing this vision. If we continue
to embrace innovation with a clear focus on integrity, our planet,
our communities, and our businesses will all benefit.”
This purchase is part of Microsoft’s ambitious commitment to be
carbon negative by 2030, and by 2050 to remove from the environment
all historical operational emissions since the company was founded
in 1975. Microsoft has a portfolio of negative emission
technologies including carbon removal credits (see: Microsoft will
be carbon negative by 2030 - The Official Microsoft Blog).
"Advancement towards Microsoft’s carbon negative goals
necessitates innovative projects that can swiftly and sustainably
scale carbon removal. This project exemplifies how reforestation
and restoration can deliver carbon removal at scale while
supporting local communities and restoring vital ecosystems. This
approach will attract investment to the conservation space and help
scale carbon removal in line with what climate science demands”,
stated Brian Marrs, Senior Director for Energy & Carbon Removal
at Microsoft.
“The scale of this undertaking demonstrates the potential that
exists in Brazil and other Latin American countries to deliver
significant climate benefits, while also supporting vibrant rural
economies. With the UN biodiversity summit coming up this year in
Colombia, and the UN climate summit taking place next year in
Brazil, there is a real opportunity to demonstrate leadership on
the global stage. We look forward to continuing to work with both
public and private stakeholders to expand the impact of this
strategy and to align with emerging jurisdictional programs where
applicable,” Wishnie said.
“Companies like Microsoft are showing us what corporate climate
leadership looks like. Rather than stepping back from action, they
have remained firm in their commitment to not only identify and
support projects that can generate high-integrity carbon credits,
but to support the growth of the high-integrity carbon market in
Brazil and other countries in the region, which can make a big
impact for the climate,” Wishnie added.
TIG and Conservation International work together to ensure the
strategy enhances biodiversity and supports inclusive and equitable
community development.
To date, more than 297 species have been identified on the
strategy’s first property, where a new 400-meter-wide riparian
buffer is expected to create a nearly 5-kilometer corridor to a
large neighboring natural forest, ultimately connecting nearly
10,000 hectares of natural habitat. TIG has also launched a
multi-year research program with the University of Viçosa to study
Cerrado restoration techniques. Under this agreement, TIG has
installed an 81-hectare field experiment to understand the efficacy
of different restoration methods, including assisted natural
regeneration, direct seeding and native seedling planting. This
research should not only inform TIG’s strategy, but also support
other restoration efforts in the region.
TIG is also conducting trainings with local communities on seed
collection to support the restoration of native species. In
September 2023, TIG collaborated with the Mato Grosso do Sul Native
Seed Network to provide native tree seed collection training for
nearby community members. Seed collection can provide new sources
of income by supplying a growing restoration market.
The generation of carbon credits forms part of the strategy’s
climate impact, in addition to managing the tree farms on long
rotations to store more carbon and produce large diameter logs that
can be used for long-lived products. The carbon projects, which
have not yet been registered, will seek to meet or exceed leading
carbon accounting standards. The transaction has been structured so
that 60% of the total carbon removal credits are expected to be
attributable to carbon sequestration in newly restored native
forests and 40% of carbon removal credits to carbon sequestration
in newly established and sustainably managed commercial tree
farms.
About BTG Pactual Timberland Investment Group
BTG Pactual (BPAC11) is the largest investment bank in Latin
America, with a market capitalization of approximately US$ 25
billion, offering a diverse range of services, including Investment
Banking, Corporate Lending, Sales & Trading, Asset Management,
Wealth Management, and Banking. BTG Pactual Asset Management is a
division of BTG Pactual with an international presence and US$ 176
billion in assets under management and administration (as of Q1,
2024). BTG Pactual Timberland Investment Group (TIG), a division of
BTG Pactual Asset Management, is one of the world’s largest
timberland managers with US$ 7.1 billion assets and commitments and
nearly 3 million acres under management throughout the U.S. and
Latin America (as of Q1, 2024). TIG’s team of more than 160
professionals has an on-the-ground presence through 21 offices,
bringing local, regional, and global experience to bear on the
management of client investments. For more information, please
visit www.timberlandinvestmentgroup.com.
About Conservation International
Conservation International protects nature for the benefit of
humanity. Through science, policy, fieldwork and finance, we
spotlight and secure the most important places in nature for the
climate, for biodiversity and for people. With offices in 30
countries and projects in more than 100 countries, Conservation
International partners with governments, companies, civil society,
Indigenous peoples and local communities to help people and nature
thrive together. Go to Conservation.org for more, and follow
our work on Conservation News, Facebook,
Twitter, TikTok, Instagram and
YouTube.
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version on businesswire.com: https://www.businesswire.com/news/home/20240617204653/en/
Rodrigo Bandeira rodrigo.bandeira@btgpactual.com