AXA invests $49m in Amazon rainforest restoration
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The alternative investments unit of French insurer AXA has committed $49m to invest directly in carbon removal startup Mombak to support the restoration of Amazon rainforest on degraded pastures in Brazil.
The investment was made as part of AXA IM Alts’ natural capital and impact investing strategy.
The company has also taken an undisclosed minority equity stake in Mombak to help the startup scale up its operational and technological systems.
Adam Gibbon, natural capital lead at AXA IM Alts, said: “Globally, reforestation has the potential to capture 2-3bn tonnes of CO2 per annum and with Mombak, we want to be at the forefront of making that possibility a reality. The forests Mombak restores will be 100% native species, providing habitat to countless species, restoring local hydrological cycles and providing more jobs per hectare than the cattle pasture they replace.”
According to the manager, the Amazon rainforest in Brazil is currently experiencing “mass deforestation of around 1m hectares per year”, as a result of the expansion of cattle farming and production of agricultural commodities.
AXA IM Alts said: “Deforestation and land degradation are detrimental for the environment as their emissions are cumulatively responsible for up to 22% of global greenhouse gas emissions, destroying the homes, habitat and food sources for the species that live there. Through this arrangement with Mombak, AXA IM Alts aims to contribute to reversing this trend.”
The projects overall aim to reforest over 10,000 hectares of degraded pastureland, through a combination of native species plantations and assisted natural regeneration, aimed at generating up to 6m high-quality carbon credits.
AXA IM Alts’ natural capital and impact investing strategy, set up in September, focusses on financing activities that ensure that vulnerable or high value natural habitats are protected from deforestation and natural ecosystems are restored.
The portfolio combines strategic equity investments into project developers and companies supporting the natural capital market ecosystem with direct project financing.
Are more insurers turning to nature capital in their investments?
