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Carbon Offsetting

Kana Earth unveils carbon offsetting ledger for fund managers

 960 640 Stuart O'Brien
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British company Kana Earth has launched an open ledger and investment platform for the UK’s carbon offsetting market, which it claims will address many of the major obstacles holding the sector back for fund managers investing in this sector.

The company says it’s already in talks with several UK based fund managers, who collectively have over a trillion in assets under management and are interested in using the platform.

The Kana proposition will enable UK landowners with carbon offsetting projects to list and promote these on the platform at an early stage of the project development, detailing the seed capital required for the projects to start. This will provide ‘unprecedented levels of transparency’ in terms of overall goals and carbon reduction targets for the schemes, and how these will be achieved. This, the company says, will make it easier for fund managers and other professional investors to reduce their carbon footprint through buying and investing in transparent UK offset credits at an early stage of the project.

With the average Woodland project in the UK being 50ha and Peatland 200ha, these projects are normally too small for fund managers to invest in, but with the Kana Investment platform providing the technology and legal framework, fund managers will be able to invest, manage, report and insure credits to create a portfolio of UK credits thereby scaling the investment in this UK Nature sector.

Under the Glasgow Financial Alliance for Net Zero (GFANZ) initiative, over $130 trillion of globally managed assets have been committed to achieving net zero by at least 2050. Fund managers including Invesco, Vanguard and BlackRock have signed up, aiming to achieve a net zero target across their business operations, but also across their investment portfolios.

Kana says more fund managers will increasingly look to compensate for all or part of the carbon emissions linked to their portfolio companies through the purchase of carbon offsets. It also expects to see more fund managers launch new “carbon neutral” share classes enabling investors to offset the carbon emissions attributable to their investments by paying a slightly higher management fee.

It also predicts that more active fund managers will start to re-invest part of their performance fee into a charitable pool or foundation whose goal is to back carbon offsetting projects.

Andy Creak, CEO and Co-Founder at Kana Earth Ltd said: “If the UK is to meet its carbon neutral targets, it needs to find a way to make it easier for fund managers to invest in projects in the country. However, there are significant challenges facing the UK carbon offsetting market, which is adversely affecting this goal.

“The challenges the UK carbon offsetting market needs to address include limited data availability, scarce financing, and the inability to attract private investment at scale,  inadequate risk management , and the lack of a process, technology, and legal framework to standardise how UK Nature Carbon works. There also needs to be a greater standardisation of codes in the UK carbon offsetting sector. We have developed Kana to address many of these challenges and in so doing, hopefully encourage fund managers and other  professional investors to back more UK carbon offsetting projects.”

Carbon Offsetting – An Exciting Strategy

 960 640 Stuart O'Brien
By:

One of the biggest challenges the UK is facing is how to tackle the issue of climate change. As our populations and economies grow, the environment is feeling the strain of our increased energy needs. This means we all need to look for ways to reduce our carbon footprint, and quickly. 

Over the past decade we have seen an increasing number of individuals become dedicated to lowering their environmental impact. These measures range from a reduction in the use of plastic, to the implementation of LPG as a main energy source. 

Although people are making a difference, further changes are still required. Last year the UK government announced plans to achieve ‘Net Zero’ status by the year 2050[1], a target which aims to stop the UK from contributing to the increase of CO2 in the atmosphere. However, public awareness on how this will be achieved is still lacking. In fact, a recent report from the Citizen’s Advice Bureau found that just 38 per cent of us are aware we’ll need to change the way our home is heated if we’re to achieve this goal.[2]

The harsh truth is that, until we are entirely carbon neutral, we’ll be unable to avoid creating a carbon a footprint on some scale. From heating our homes and offices, to driving our cars or even making a cup of tea, it’s inevitable that we can’t always live up to the green standards we’d like to. 

It isn’t all doom a gloom, however. For those looking to combat these inescapable emissions, there is a solution – and it’s called Carbon Offsetting. Here, we look through the benefits and how it can help us lead a greener life. 

What is meant by Carbon Offsetting?

There is a solution to the everyday emissions we produce, and it comes in the form of Carbon Offsetting. A process in which people compensate their emissions by funding projects that provide sustainable development in communities around the world. These projects offer an equivalent reduction in emissions to those you create; either counteracting or absorbing carbon dioxide and bringing balance to the environment.

Big brands from around the world such as EasyJet[3], Shell[4] and Gucci[5] all now use Carbon Offsetting to help improve the environmental impact of their businesses. 

But why is it important?

Carbon Offsetting exists as way of allowing people to make up for the emissions that they can’t otherwise avoid. 

Additionally, the increased funding these causes receive can change lives, bringing economic, social and health improvements to whole communities. With people at the heart of Carbon Offsetting, as well as ecosystems, it allows us to begin future proofing for a cleaner, greener world.  

For what reason should I Offset my Carbon emissions?

As homeowners, Carbon Offsetting is the opportunity to balance your carbon footprint. For the environmentally conscious and those looking to reduce their impact on the climate, Carbon Offsetting gives them the tools to make a difference. Whilst it shouldn’t be used as a stand-alone approach and is best used as part of a wider carbon reduction strategy, it will help people reduce their impact on the environment. 

How do I offset the carbon emissions I can’t control?

From West Africa households being given access to eco-friendly cooking equipment, to rural China being supplied with clean hydroelectric power, the beneficiaries of Carbon Offsetting are extensive and the options diverse. One example is the Kariba REDD+ Forest Protection project in Zimbabwe, Africa. Since its launch in 2011, it’s avoided more than 18 million tonnes of carbon dioxide from being released into the atmosphere and has prevented deforestation in an area of nearly 750,000 hectares. 

Through the combination of Carbon Offsetting and the support of sustainability projects which deliver clearly recognisable results, aligned with individual efforts within the home and industry, it is clear that the UK can, over the coming years, play a positive role in carbon emission reduction.

[1] https://www.gov.uk/government/news/uk-becomes-first-major-economy-to-pass-net-zero-emissions-law[1]https://www.citizensadvice.org.uk/Global/CitizensAdvice/Energy/Energy%20Consultation%20responses/Zero%20sum%20(2).pdf

[1] http://corporate.easyjet.com/corporate-responsibility/environment/climate-change-carbon-emissions-and-carbon-offsetting

[1] https://www.businessgreen.com/bg/news/3082469/shell-to-offer-drivers-carbon-offsets-at-no-extra-cost

[1] https://www.gucci.com/uk/en_gb/st/stories/gucci-equilibrium/article/carbon-neutral