SDG Impact & sustainacraft To Launch Japan’s First Carbon Investment Fund

SDG Impact & sustainacraft To Launch Japan’s First Carbon Investment Fund - Carbon Herald

SDG Impact Japan and sustainacraft have announced they will be partnering to launch Japan’s first investment fund for top-tier carbon credits.

The initiative, dubbed the Nature Commitment Fund, will be managed by SIJ Climate LLC, a subsidiary of SDG Impact Japan and aims to raise 10 billion yen (roughly $88 million USD) in 2024 to fund carbon credit projects that will reduce CO2 emissions by a staggering 9 million metric tons.

The fund will be focused exclusively on nature-based solutions (NbS), as most experts agree on their critical role in maintaining rising temperatures below the 1.5˚C global warming target and protecting biodiversity.

Yet, despite investment in these projects remaining limited to date, demand for high-quality carbon credits, backed by robust measurement and monitoring, has skyrocketed in recent years.

This partnership between sustainacraft and SDG Impact Japan aims to boost investment by attracting Japanese companies to NbS projects and build a market ecosystem that fosters high-quality, nature-based credits.

The fund will only invest in projects that meet strict criteria regarding additionality (ensuring emissions reductions wouldn’t have happened anyway), protection of natural ecosystems, verified credit generation, and expected returns through innovative technologies and expertise.

Relevant: Tokyo Stock Exchange to Launch Japan Carbon Credit Market In Oct 2023

As regulations on greenhouse gas emissions tighten, experts predict a shortage of high-quality credits. 

The fund’s strategy is to invest in promising early-stage NbS projects and secure long-term carbon credit offtake. This ensures investors receive either a steady stream of carbon credits or profit from potential price increases.

“We believe carbon credits are one of the effective mechanisms to promote the flow of funds to NbS from the private sector by addressing the companies’ demand to offset their CO2 emissions to achieve their net zero goals,” SDG Impact Japan commented on the new partnership. 

“Achieving a net-zero and sustainable economy will require significant capital and will not be possible without contributions from the business sector. This fund will accelerate collaborations with overseas project developers and other market players while supporting our company’s mission of promoting the circulation of funds for NbS projects,” was sutainacraft’s statement.

Read more: Amazon Fund Secures $640M In New Pledges For Rainforest Conservation In 2023

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