Nature Investments:
Instruments and Approaches

Carbon Markets

Carbon credits generated from avoided deforestation, afforestation, and ecosystem restoration provide climate benefits while, creating new income streams for communities and land stewards. High-integrity carbon credits provide the highest returns and nature investors basing their investments on co-benefits of carbon sequestration, such as biodiversity protection, are positioned to derive sustainable returns in the long-term. Acorn Rabobank is investing across tree plantations and allied activities in lieu of future returns from sale of Carbon Removal Units (CRUs), which are measurable, ex post, nature-based and certified by Plan Vivo. CRUs are generated from activities focused only on carbon removals through agroforestry, working with smallholder farmers. They use advanced remote sensing technologies to offer traceable, transparent CRUs, allowing for both offsetting and insetting.

Evolving global frameworks, including Article 6 of the Paris Agreement, have made carbon markets more structured, transparent, and lucrative.

The demand for high-integrity carbon credits—particularly those tied to forests, wetlands, and regenerative agriculture—is expected to grow exponentially.

The Taskforce on Scaling Voluntary Carbon Markets projects that demand could increase by a factor of 15 or more by 2030.

Biodiversity Credits

Biodiversity credits are financial units designed to incentivise protection and enhancement of biodiversity (like species, ecosystems and natural habitats) and deliver net positive ecosystem gains. Much like carbon credits, biodiversity credits are measurable, traceable, and tradeable over a fixed period. These credits expand beyond the focus on carbon sequestration and foster investments towards broader ecological protection and restoration.

Till 2020, the estimated value of biodiversity credits sold was between $325,000 and $1.87 million. As the market continues to evolve leading to the establishment of effective governance structures, the global demand for voluntary biodiversity credits could reach $2 billion in 2030 and $69 billion by 2050.

Nature Bonds

Nature Bonds are debt finance instruments that link investment returns with measurable environmental outcomes, often with a fixed guaranteed component and a variable component tied to specific goals.

The Amazon Reforestation Outcome Bond issued by the World Bank, with an expected nominal value of $225 million is the World’s largest outcome bond. HSBC bank served as the structurer and sole lead manager for the bond, mobilizing approximately $36 million of additional capital from investors to support reforestation activities in the Brazilian Amazon region.

The Nature Conservancy’s Nature Bonds Program that implemented projects in Seychelles, Belize, Barbados, Gabon, and The Bahamas, refinanced a total of $1.5 billion of debt, generating over $535 million for conservation.