Gresham House launches £301m biodiversity credit fund

Gresham House is set to launch a new fund tying investment results to demand for ‘biodiversity credits’ in England, aiming to raise $380m (£301.8m).

The fund has been launched in collaboration with Willis Towers Watson (WTW), according to Bloomberg.

It will invest in ‘habitat banks’, which are plots of land ranging from 10 to over 500 hectares, where changes to land management are expected to improve biodiversity.

Then, it will generate returns from the sale of biodiversity credits by Environment Bank. Bloomberg reported that Gresham House and investors had already committed more than $300m to Environment Bank.

Biodiversity has begun to be seen as a new frontier for sustainable investing, as ESG (environmental, social and governance) based investing has surged in popularity and began to mature.

Last November, DWS launched three biodiversity ETFs, focusing on global, European and American companies who have a low negative impact on the Earth’s ecosystem.

In the same month, Bloomberg teamed up with the Natural History Museum to provide financial markets with access to the museum’s biodiversity index, allowing investors to screen companies operating in areas with intact ecosystems.

New regulations from the government require developers in England to achieve a net gain in biodiversity of at least 10 per cent to obtain planning permission, either by setting aside land on-side or purchasing credits, such as the ones generates by the new fund.

“With the UK in the bottom 10 per cent globally in terms of biodiversity, we can see no better place to partner with forward-thinking investors such as WTW to tackle this grave threat,” Peter Bachmann, managing director of sustainable infrastructure at Gresham House told Bloomberg. “If we get nature-based solutions right, it could be really transformational.”