Finnish Impact investor Finnfund claims it has become the first development financier to deliver an investment portfolio that is carbon net-negative.
Its 2019 data revealed that in its investment portfolio worth EUR 617 million, across forestry and agroforestry, they removed 134,679 more carbon dioxide tonnes (tCO2e) than they emitted.
According to Jaakko Kangasniemi, Managing Director and CEO of Finnfund, “This [data] shows that our long-term commitment to sustainable forestry investments is working,
“Our investments remove more carbon from the atmosphere that they emit. We are committed to keeping it that way.”
According to Finnfund, 83 per cent of their investments in sustainable forestry are in African based carbon sinks, and their investments across the portfolio removed a total of 240,431 tCO2eq from the atmosphere.
Sustainability gains per EUR one million invested in FinnFund’s portfolio:
- Carbon footprint / emissions: 208 tons CO2eq
- Carbon sink: -240,431 tons CO2eq
- Net emissions: -134,679 tons CO2eq
- Avoided emissions: 128 tons CO2eq
“We believe we are the first development financier to report a net-negative investment portfolio and I don’t think there are many investment companies overall who have done so, with perhaps the exception of some forestry funds. But in this case, I would be delighted if someone proves me wrong,” says Kangasniem.
Finnfund’s portfolio is not only carbon net-negative, but it is delivering both positive impacts alongside financial returns. The impact fund claims that it is lining up all new investments with the Paris Agreement as well as progressing to solve for all 17 of the United Nations’ Sustainable Development Goals.
FinnFund bases its accounting on GHG Protocol and Partnership for Carbon Accounting Financials (PCAF). This includes an assessment of climate effects both pre investment and annually, and then accounts for the direct and indirect emission of each investee company.
Carbon offsets and compensations are not recognised as part of emissions reductions.
Finnfund’s Climate and Energy Statement, highlighting climate impacts across all investments will be launched this year.
The company also announced a USD 10 million commitment to Uhuru Growth Fund I (UGF) which is the first generation fund focusing on high growth SME and middle market businesses operating in the consumer-facing and financial services sectors.
In a statement from Finnfund, it said it will seek investments in West African countries including Nigeria, Ghana, Côte d’Ivoire and other Francophone West African markets such as Burkina Faso, Mali and Senegal.
“Finnfund’s commitment is part of the first close of Uhuru Growth Fund I (UGF) at USD 113 million, announced by Uhuru Investment Partners. The fund has a target fund size of USD 200 million,” according to the company.