Hartree Partners inks £2bn deal with Wildlife Works to expand voluntary carbon market

Commodities trading firm Hartree Partners and conservation outfit Wildlife Works have unveiled plans to create what they claim will be one of the world's most extensive portfolios of avoided deforestation projects, and then market them to companies working towards climate targets.

Announcing the new tie-up yesterday, the partners said they aimed to channel more than £2bn of private sector investment towards 20 new forestry projects in Africa, Asia and Latin America that would be developed in collaboration with local communities.

They calculated the deal would increase the availability of high-quality, verified, avoided deforestation projects by 40 per cent and reduce carbon emissions from deforestation by 20 million tonnes each year, estimating this would amount to roughly 600 million tonnes of CO2 emissions saved over the 30-year life of the projects.

Demand for verified carbon offsetting projects is expected to expand rapidly over the coming years as more companies turn to the voluntary carbon market to compensate for their emissions and hit their net zero targets.

Mike Korchinsky, founder and CEO of Wildlife Works, said the financing deal would protect threatened forests and wildlife while improving the livelihoods of local communities and reducing emissions.

"While those in the Global North continue to debate what they want from climate action, our partners in the Global South urgently need just and effective solutions now," he said. "With Hartree Partners' financial backing and carbon market expertise, we can implement our just and inclusive climate, community, and biodiversity solutions in many more forest communities where they're desperately needed."

The portfolio will be marketed by Vertree, a joint venture of Hartree Partners and influential sustainability consultancy Systemiq, and Wildlife Works' marketing agency Everland, which facilitated the deal.

Ariel Perez, partner at Hartree Partners, also welcomed the new partnership. "The scientific community agrees that the world cannot keep global temperature rise below 1.5C without significant support from global businesses," he said. "Hartree Partners is proud to be providing substantial long-term investment in nature-based solutions through this partnership."

Hartree Partners is majority owned by Brookfield Asset Management, the Toronto-based investment company chaired by former Bank of England government Mark Carney, who is currently leading a major taskforce into how the integrity of the global voluntary carbon market can be scaled and regulated.

The voluntary carbon market has long been the subject of intense debate. Advocates argue it provides a mechanism for delivering emissions reduction, primarily through the protection and expansion of natural ecosystems, while also funnelling climate investment into developing economies and nature protection. As such the sector has grown rapidly in recent years as more businesses have sought to become 'carbon neutral' or deliver on net zero goals.

However, critics have warned that while it is vital to expand natural carbon sinks the carbon offsetting sector remains under-regulated, often struggles to deliver promised emissions reductions, and can provide cover for businesses that are taking minimal steps to curb their own emissions.

Calls have grown in recent years for more robust policing and governance mechanisms in the sector, with business leaders and civil society publishing guidance earlier this month that sets out how companies can embed natural climate solutions into their climate strategies in credible way.

Hartree Partners and Wildlife Works confirmed their project portfolio would meet the criteria set out by a number of internationally recognised standards for offsetting, including the Verified Carbon Standard managed by the non-profit Verra; the Climate, Community and Biodiversity alliance's Gold Standard; and the SD Vista standard used to verify project contributions to the UN Sustainable Development Goals.

The projects will also make a "significant contribution" to host countries' national climate goals under the Paris Agreement, they said.