Viridios Capital and Tribeca Investment Partners have created a new fund management joint venture called VT Carbon Partners that will seek to address the significant demand worldwide for nature-based and high-impact carbon credits.
The first fund the joint venture is launching is the VT Carbon Fund, which already has received the rights to a $500 million portfolio. It includes nature-based carbon credits that target Asian and Australian-based companies that want to offset their carbon emissions on a voluntary basis.
The fund already has plans for future raisings in 2022
“There is a scarcity of high-impact offset opportunities available to companies pledging to decarbonise, particularly for companies that must rely significantly on offsets to address their high carbon emission rates,” Viridios Capital’s CEO, Eddie Listorti, said. “This supply shortage is historically attributed partly to a lack of funding for project origination. The VT Carbon Fund provides a substantial opportunity in the critically important nature-based carbon avoidance and removal credits to those companies.”
Carbon offsets refer to a decrease in greenhouse gas emissions or a converse increase in the storage of carbon used to help compensate for greenhouse gas emissions that happen elsewhere. The carbon storage could occur by planting trees or restoring land, for example.
Despite the call from countries across the world to reduce greenhouse gas emissions, some companies are simply not able to do it in their own direct operations. At the same time, they want to play their part in reducing carbon emissions.
The way they do this is through carbon offset programs. These programs allow businesses and individuals to invest in programs that reduce greenhouse gas emissions to offset the greenhouse gases they emit in other ways.
Companies may not be able to completely eliminate their carbon emissions, either for the manufacturing of their products or their delivery, for example. Instead, they might invest in a project that removes carbon from improved land management and reforestation.
The idea behind carbon offsets is that it doesn’t matter exactly where greenhouse gases are reduced since they mix in the atmosphere globally. They allow companies to play a real and significant role in getting to net-zero carbon emissions, even if they can’t directly eliminate or significantly reduce greenhouse gas emissions in their operations just yet.
With so many companies and individuals around the world now interested in the power of carbon offsets, investment funds that focus on them are becoming increasingly popular and in high demand.
And that’s precisely the demand that the VT Carbon Fund seeks to appeal to
“The VT Carbon Fund is building inventory in partnership with the world’s largest offset project developers, offering the fund’s investors the best nature-based carbon credits available globally.”
Nature-based carbon credits specifically look to solutions that protect the natural environment in tackling the global climate crisis. A recent report from the United Nations Environment Program said $8.1 trillion is needed to be invested in nature by 2050 to deal with the crises of land degradation, biodiversity, and climate change.
As such, many investors are considering nature-based carbon credits as a new and exciting asset class, one with tremendous financial growth potential and significant benefits to the world as a whole.
The projects under this umbrella typically focus on protecting, restoring, and managing ecosystems, including wetlands and forests. These projects are so vital because these environments soak carbon up out of the atmosphere.
Companies are increasingly interested in purchasing these nature-based carbon credits to offset the greenhouse gas emissions they are creating.
About the Author
Eddie Listorti is the Executive Chairman of Viridios Group and CEO of Viridios Capital. He has a proven track record with 30 years in business and banking. His experience includes managing teams of over 2,000 people and annual revenues exceeding AUD 2 billion. Mr. Listorti has held board positions in industry bodies and joint venture partnerships.