SIM proud to report that global carbon market player ecosecurities has secured investment by consortium headed by SK and Shinhan

SIM is proud to report that global carbon market player ecosecurities secured investment by consortium headed by SK and Shinhan

As ecosecurities largest shareholder, SIM is proud to report that the company has concluded a round of finance with a consortium led by two Korean corporations—SK Group (“SK”) and Shinhan Group (“Shinhan”). SK is a global conglomerate with a wide range of manufacturing and technology businesses, Shinhan is one of Korea’s leading financial institutions, and ecosecurities Holdings SA (“ecosecurities”) is a global carbon project developer. The three companies are pleased to announce a partnership for sourcing and developing carbon credits and a strategic investment into ecosecurities.

Pedro Moura Costa, CEO of SIM and original founder of ecosecurities, said, “We are delighted to welcome both SK and Shinhan as shareholders in ecosecurities. Since I founded EcoSecurities over 25 years ago, our mission of connecting purpose-driven capital with high-integrity environmental projects has never been more important. With our new partners, we will be able to continue on this mission even stronger than before.”

  • Transaction marks SK and Shinhan’s largest investment to date in the international carbon markets and underpins both companies’ expansion into Nature-based Solutions (NBS) and Technology-based Solutions (TBS).

  • Investment will help cement ecosecurities’ leadership in carbon reduction and removal project development while growing their decarbonization technology and advisory services – working with governments, landowners and NGOs.

  • The additional investment will be utilised to accelerate capital mobilisation for decarbonizing economies across the globe, especially in the Global South, and building trust and integrity in the market by delivering high-quality projects.

  • ecosecurities will also see its operations expand to focus on regenerative agriculture, conservation, biochar, enhanced weathering projects and other CDR technologies.

The world needs to rapidly mobilise capital (both public and private) at scale to decarbonize economies and reach net zero. The latest State of Climate Action report by the World Resources Institute (WRI) calls for an increase in global private climate finance flows to $2.6–3.9 trillion per year by 2030 in order to meet targets, an increase of more than 10x current levels. Finance flows must increase by nearly half a trillion dollars each year through this decade to get on track. This partnership will catalyse capital mobilisation towards net zero strategies and will support countries and communities to achieve their Paris Agreement pledges.

Carbon markets are crucial for mobilising climate finance at scale, decarbonizing sectors and economies and fostering a sustainable future. In recent years, there has been significant growth in carbon markets globally as investors, corporations, governments and project developers actively contribute to the expansion and implementation of new technologies necessary for achieving net zero emissions.

Moohwan Kim, EVP of SK’s Green Investment Center, who joins the Board of Directors of ecosecurities, said of the investment, “SK is committed to leading the transition to net zero and enabling a more sustainable energy complex. Our strategic investment in ecosecurities reflects our ambition to help scale global carbon markets and support the growth of technology-based solutions worldwide.”

Joontai Kim, Deputy CEO of Shinhan Securities said, “At Shinhan, one of our mottos is ‘building a better world through finance’. Through our partnership with ecosecurities, we make solid progress on our Zero Carbon Drive targets and facilitate our commitment to expanding green finance.”

SK and Shinhan join existing institutional shareholders Sustainable Investment Management (SIM) and Hartree Partners (who invested in ecosecurities in March 2022 through its wholly-owned subsidiary Vertree Partners).

Ariel Perez, Managing Partner at Vertree commented, “By combining the strength of SK in technology and energy, Shinhan’s extensive financing capabilities, and Hartree’s international carbon sales and trading platform, ecosecurities is well-positioned to further establish themselves as a leading global climate solutions provider”.

Pablo Fernandez, CEO of ecosecurities, further commented, “We are thrilled to welcome our new partners, SK and Shinhan. For over 25 years, ecosecurities has been at the forefront of driving high -impact, positive climate action. With this announcement today, it paves the way for us to continue doing so by combining nature and community-based solutions with technology-based decarbonization strategies.”

SK and Shinhan join as minority shareholders. Terms of the deal are not disclosed.

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Eligibility Criteria for Cerrado Programme 1

The following eligibility criteria are required for participation in the Responsible Commodities Facility for Cerrado Programme 1 (see full description here):

Land use

The area of cultivation must not have had any deforestation and conversion of native vegetation since 1 Jan 2020*. Preference will be given to areas converted from abandoned pasture land to soy cultivation after 2008.

Forest Code Compliance

Farm land must be registered with the Cadastro Ambiental Rural (CAR). The farm must contain and maintain areas of native vegetation equivalent to those required for Legal Reserve and Areas of Permanent Protection (APPs) determined by the Forest code or have formally adhered to a Programme of Environmental Regularization (PRA) established by the state environmental agency**. The farm area must not overlap with public protected areas, indigenous lands and other traditional people and community lands (including ‘quilombolas territories’).

Land title

Farmers must have unquestionable right to use the land, be it as land title, land lease agreement, or another legally recognised form of land tenure (e.g., ‘posse’)

Legal Compliance

Farmers must demonstrate that they and their farms do not contravene any environmental or legal requirements, such as embargoes, environmental irregularities, contraventions of the labour legislation (including slave and child labour), non-compliance with the Soy Moratorium (if applicable), and internationally-accepted rules for the use of agrochemicals.

*Farmers occasionally request the conversion of small areas of native vegetation to conduct farm improvements (building storage areas, water reservoirs, etc.). Provided that these areas are small and not for the purpose of expansion of the agricultural area, RCF analyses and considers them eligible. In order to do so, RCF uses the concept of Minimal Level (of deforestation or conversion) as defined by the Accountability Framework Initiative Terms and Definitions, which states “To be considered consistent with no-deforestation or no-conversion commitments, minimal levels must generally meet the following conditions: Not exceed cumulative thresholds that are small both in absolute terms (e.g., no more than a few hectares) and relative to the area in question (e.g., no more than a small proportion of the site).”

**The RCF analyses Forest Code compliance by looking at single farms (defined as the area covered by a CAR) or bundles of individual CARs that, in combination, result in the desired area of native vegetation put under the protective status of the RCF.  This bundling should not be understood as a means of compliance with the Forest Code requirements and is not intended to release the farmer of the regularization process committed under the Forest Code rules (enrolment in the CAR, engagement in a PRA, etc.). In order to differentiate its metrics from those of the Forest Code, the RCF refers to areas of Excess Native Vegetation (ENV) as opposed to Excess Legal Reserve, to avoid confusion with areas legally categorised under the Forest Code.