Repsol Foundation, Crédit Agricole Indosuez, and Portobello Capital present the first ESG investment fund for large-scale reforestation worth €100 million

 

Press Release 20/04/2022
  • The Repsol Foundation, Crédit Agricole Indosuez, and Portobello Capital have started up the very  first investment fund in Spain to back large-scale forestry projects for offsetting CO₂ emissions worth €100 million that will be channeled through the Green Engine project run by the Repsol Foundation and its investee company, Sylvestris Group. 
  • Thanks to this investment vehicle,  more than 24,000 hectares of land will be reforested in various Spanish regions to offset 6 million tonnes of CO₂ over the next five years. 
  • Repsol Chairman Antonio Brufau highlighted that large-scale reforestation and forest management, such as natural carbon sinks, are a necessary and complementary factor along with other technologies to meet the targets to decarbonize the economy. 
  • “This important project and those developments associated with the 'new carbon economy' are generating multiple opportunities for society and businesses, for technology, innovation, and sustainable finance," underscored the Repsol Chairman.
  • The new fund was presented at an event where the Spanish Secretary of State for the Economy and Business Affairs, Gonzalo García Andrés, pointed out that the “Recovery, Transformation, and Resilience Plan is very well targeted, with around 40% of anticipated investments, above the amount established by the European Commission, being destined to the development of energy transition, industry decarbonization, and energy efficiency improvement projects.

The Repsol Foundation, Crédit Agricole Indosuez, and Portobello Capital presented today the very first ESG investment fund in Spain to invest in reforestation. It will be endowed with a €100 million investment to promote the development of large-scale forestry projects for offsetting CO₂ emissions.

This fund is entirely innovative within Europe and will exponentially escalate reforestation, showcasing this natural climate solution as key to achieving decarbonization and the energy transition, in line with the Paris Agreement, the 2030 Agenda, the European Green Deal, and commitments made at the Glasgow climate summit (COP26). Initial investments, which will begin this year, will reforest more than 24,000 hectares of land to offset 6 million tonnes of CO₂ over the next five years. 

The reforestation projects funded by this initiative will be carried out by the Repsol Foundation and Grupo Sylvestris' Green Engine project. It's the largest reforestation program for emissions offsetting in Spain, which in addition to its environmental benefits, is also characterized by its social impact and the promotion of rural economies through its aim to generate local and inclusive employment and to contribute to the economic development of the areas where it is carried out. 

Thanks to this new investment power, Green Engine can make progress on its objective with an even greater impact, maximizing its positive impacts on society, the environment, businesses, the economy, and employment, especially in more vulnerable rural areas. Furthermore, it's an excellent opportunity to allow the Iberian Peninsula to take the lead in Europe as a carbon sink. 

The new fund was presented at an event at Repsol's Campus and included the presence of Secretary of State for the Economy and Business Affairs, Gonzalo García Andrés; Repsol Chairman Antonio Brufau; CEO of Indosuez Wealth Management in Spain, Antonio Losada; and founding partner of Portobello Capital, Íñigo Sánchez-Asiaín.

Repsol Chairman Antonio Brufau highlighted that “this important project and those developments associated with the 'new carbon economy' are generating multiple opportunities for society and businesses, for technology, innovation, and sustainable finance."

During the presentation, it was emphasized that the investment fund is entirely aligned with ESG criteria and aimed at private investors committed to long-term sustainable actions dedicated to improving society and the environment. Moreover, the speakers indicated that reforestation is an excellent means to advance toward a low carbon, profitable, efficient, competitive, and scalable economy.  

This initiative is endorsed by leading entities like Crédit Agricole Indosuez, the global asset management brand of Crédit Agricole (worldwide leader in sustainability bonds), and Portobello Capital, the leading alternative asset manager in southern Europe. This support reinforces the potential that reforestation can have on bolstering the growing voluntary market for emissions offsetting, given the rising number of companies that have committed to becoming carbon-neutral. 

The CEO of Indosuez Wealth Management in Spain, Antonio Losada, considers that “the participation of a financial partner such as Indosuez in the development of the first Venture Capital Company for green infrastructure and real CO₂ absorption through reforestation, represents a truly special incentive, given our corporate commitment to sustainability. It is fully in line with the social project of our parent company, the Crédit Agricole group."

Furthermore, founding partner of Portobello Capital, Íñigo Sánchez-Asiaín stated that "with this pioneering initiative, we can provide a solution to the growing investor appetite for financial products that back sustainability and social impact. We've got the best partners for a unique project that unites a firm commitment to ESG criteria with a financially attractive profile."

At the event, other participants included former European commissioner of Energy and Climate Action and current Senior Advisor at Grupo Beka Finance, Miguel Arias Cañete; chair professor of Economics at the Universidad Carlos III de Madrid, Natalia Fabra; director of strategy and evaluation at the Instituto de Crédito Oficial (ICO), Blanca Navarro; managing partner for Markets and Corporate Consulting at KPMG, Pablo Bernad; and managing director of Grupo Sylvestris, Jaime Rábago, who touched on aspects related to financial tools for encouraging a fair energy transition.

The Spanish Secretary of State for the Economy and Business Affairs, Gonzalo García Andrés, pointed out that the “Recovery, Transformation, and Resilience Plan is very well targeted, with around 40% of anticipated investments, above the amount established by the European Commission, being destined to the development of energy transition, industry decarbonization, and energy efficiency improvement projects.”

As Miguel Arias Cañete emphasized, "We have some very powerful climate targets, but we must activate mechanisms to ensure that the energy transition is fair because effects could be asymmetrical.”

 

Green Engine

Repsol Foundation, along with its investee company, Sylvestris Group, launched Green Engine in 2021 with the aim of promoting large-scale reforestation as an emissions offsetting tool within the energy transition already underway.

This is the largest reforestation project for offsetting emissions in Spain, which is promoting a new economy, training, and employment, while creating new forests with native species. The Green Engine's goal is to cover 70,000 hectares to capture 16 million tonnes of CO2 over the coming years. The new forests will be designed in accordance with the highest standards of the Spanish Climate Change Office (OECC), which is the official certification body for offsetting projects in Spain, part of the Ministry for the Environmental Transition and the Demographic Challenge.

Thanks to this project, inclusive local jobs are being created in the rural parts of Spain where planting takes place and special attention is given to hiring people from vulnerable groups. It also boosts rural economies through specialized training and the creation of new businesses related to the forest industry, while attracting further economic activity to generate increased wealth in the area.  

Since the beginning of its creation, Motor Verde has held a steadfast commitment to innovation and research applied to the forestry sector and has recently signed an agreement with Hispasat, a top-tiered technology partner with whom the Repsol Foundation and Grupo Sylvestris will develop satellite technology for monitoring and maintenance of forests and their growth.

The satellite control, drone monitoring, and applied sensor technologies will allow for the development of other technologies related to the internet of things, artificial intelligence, and blockchain, making forest management and carbon absorption as scientific, precise, and rigorous as possible, and converting Green Engine into a leader in technological innovation applied to forest engineering for the absorption of CO₂.