Hartree Partners and SYSTEMIQ launch Vertree to accelerate investment in global carbon markets
New business founded to drive positive impact as $30bn Voluntary Carbon Market matures
Joint venture combines world-leading sustainability expertise of SYSTEMIQ with trading and risk management experience of Hartree Partners
Vertree will focus on high-integrity nature-based solutions; investing in its own projects; and market-leading insights and due diligence
Wednesday 26 May 2021, London.
Sustainability experts SYSTEMIQ and global energy and commodities firm Hartree Partners today announce the launch of Vertree Partners Limited, trading as Vertree, a joint venture that enables organisations to accelerate and deliver ambitious climate commitments through nature-based solutions.
The launch follows news that corporate carbon-neutral pledges led to a record Voluntary Carbon Market (VCM) transaction volume in 2020, growing 6% year-on-year. According to the Taskforce for Scaling Voluntary Carbon Markets, the global VCM could reach between US $30bn and US $50bn in size by 20301.
Nature-based solutions are a crucial part of Voluntary Carbon Markets, harnessing the power of the planet’s natural resources to address the dual climate and biodiversity crises. Done well, nature-based solutions protect and restore vital habitats to increase biodiversity at the same time as reducing atmospheric greenhouse gas emissions by avoiding or removing them.
Land-use change ranks second only to the burning of fossil fuels as the biggest source of emissions that contribute to climate change. But investing in tropical rainforests to sequester and store carbon can have a significant beneficial climate impact; according to the Intergovernmental Panel on Climate Change, ‘‘reducing deforestation and forest degradation rates represents one of the most effective and robust options for climate change mitigation”2.
Ariel Perez, Vertree’s Managing Director, said: “It is no longer sufficient to slow the rate of emissions the world produces; we also need to begin removing CO2 that already exists. Although the priority should be to abate emissions wherever possible, the range of technological solutions available today varies greatly, and achieving net zero will require some degree of carbon reductions and removals. Nature-based solutions are among the most scalable and effective ways to reduce emissions, protect and restore biodiversity, and to support the United Nations’ Sustainable Development Goals”.
However, the current supply of high-integrity nature-based solutions is insufficient to meet the commitments already made by a number of large organisations. McKinsey estimates3 that annual global demand for carbon offsets could reach between 1.5 to 2.0 gigatons of carbon dioxide (GtCO2) by 2030 and between 7 to 13 GtCO2 by 2050. According to their research, “the development of projects would have to ramp up at an unprecedented rate” to meet that demand, with issues such as a lack of financing leading to constrained supply.
“We are committed to catalysing significantly more long-term investment in nature-based solutions”, Perez continues, “but this must be done in a way that genuinely addresses global emissions while improving the livelihoods of local communities. Vertree’s expertise in carbon markets, along with over a decade of on-the-ground forest and landscape project experience that is embedded in the joint venture, enables us to adopt this long-term perspective.”
Vertree will further address concerns around the integrity of carbon offsets with market-leading insights and due diligence of both the projects it supports and the organisations it works with. All Vertree projects are verified and audited by third parties, including the Verified Carbon Standard; Architecture for REDD+ Transactions; Gold Standard; and Climate, Community, and Biodiversity Standard. Vertree will also use the Core Carbon Principles set out by the Taskforce on Scaling Voluntary Carbon Markets, which assess impacts on the climate, biodiversity, and local communities.
Taraneh Azad, SYSTEMIQ’s Partner and COO, said: “We created Vertree to provide nature-based solutions that the world can trust, with the highest possible standards of environmental and social integrity. Our ambition is to enable Vertree clients to trace funding all the way back to the forests and local communities that they’re investing in, ensuring Vertree projects are both transparent and impactful.”
Ahead of the UK’s Presidency of COP26 in November, the scaling and operation of Voluntary Carbon Markets has become a focus for policy makers and investors. The Taskforce on Scaling Voluntary Carbon Markets, led by Mark Carney, released its final report in January 2021, and the Voluntary Carbon Markets Integrity Initiative began consulting on guidance in March.
Notes to Editors:
- Vertree Partners Limited, trading as Vertree, is a joint venture that combines the world-leading sustainability expertise of SYSTEMIQ and the carbon markets and environmental products experience of Hartree Partners.
- Vertree will drive positive impact in the maturing voluntary carbon market by focusing on high integrity nature-based solutions.
- By investing in its own projects and using market-leading insights and due diligence, Vertree will enable organisations to accelerate and deliver ambitious and credible climate commitments through nature-based solutions that also have positive impacts on communities and biodiversity.
About Hartree Partners LP
- Hartree Partners is a global merchant commodities firm specialising in energy and its associated industries. It focuses on identifying value in the production, refinement, transportation and consumption of tradable commodities and anticipating opportunities in the supply chain where they may be under or over-valued.
- Founded originally in 1997, Hartree has a global reach spanning 12 offices and over 100 traders. The company’s rigorous research, analytical approach, and entrepreneurial culture have contributed to its strong track record and growth over that time.
- Hartree Partners is owned by the company’s managing partners, senior staff, and Oaktree Capital, an alternative investment company with over $113bln of assets under management and a major investor in low carbon and renewable technologies.
SYSTEMIQ is a B Corp created in 2016 to drive achievement of the UN Sustainable Development Goals and the Paris Agreement by transforming markets and business models across three areas: land use, materials and energy. Working with partners across sectors, SYSTEMIQ aims to unlock economic opportunities that benefit business, society and the environment. To learn more, visit www.systemiq.earth
- Andrew Enston, Blakeney
- + +44 77493324459