According to the report from the UNFCCC High-Level Climate Champions and the Marrakech Partnership Climate Action Pathways, released in late 2020, significant advancements are bringing key sectors closer to achieving the 2050 net-zero emissions target. These efforts aim to mitigate the impacts of climate change.
The report highlights essential milestones for limiting global temperature increases to 1.5°C, in line with the 2015 Paris Agreement. It addresses critical areas including energy, urban development, industrial operations, land use, ocean health, transportation, water resources, and resilience strategies.
These insights offer a strategic framework for mobilizing climate action among cities, regions, businesses, and investors as the UN Climate Change Conference approaches in November 2021.
Recognizing the vital role of large-scale ecological restoration in meeting the Paris Agreement’s objectives, the fintech company Cultivo is committed to investing $1 billion over five years to restore at least 3.5 million hectares of degraded land. Cultivo encourages investors to leverage natural solutions for biodiversity preservation and effective carbon capture.
Dr. Manuel Pinuela, co-founder and CEO of Cultivo, points out that nature-based solutions could contribute to over 30% of the necessary CO2 reduction targets by 2030, yet currently receive only about 3% of the funds allocated for carbon capture initiatives. In response, Cultivo aims to address this “financing gap,” emphasizing the importance of natural restoration, carbon sequestration, and biodiversity conservation.
The company employs an innovative financing model that links financial institutions with NGOs and landowners, facilitating investments in natural capital projects that conserve ecosystems, support livelihoods, and yield competitive financial returns. Utilizing proprietary algorithms and remote sensing technology, Cultivo identifies high-quality projects and assesses their potential for natural capital returns. This approach aggregates investment opportunities and simplifies the investment process for financial institutions interested in sustainable initiatives such as regenerative grazing and reforestation.
These projects generate carbon credits and other offsets, providing returns for investors while ensuring stable revenue for landowners and local communities. A notable collaboration is with TerViva, where Cultivo supports farmers in cultivating pongamia—a tree crop with historical significance in Asia. Pongamia produces oilseeds similar to soy, requires fewer chemical inputs, improves soil quality through nitrogen fixation, and captures carbon in its biomass. The sustainability benefits of this crop translate into carbon credits, creating additional income for farmers.
Dr. Pinuela notes that while there are many potential nature-based solutions, one challenge for institutions and corporations is identifying high-quality projects. High quality refers to the ability of natural capital to provide valuable ecosystem services, such as carbon capture and biodiversity maintenance. Distressed assets like degraded forests or wetlands can yield significant benefits in terms of CO2 mitigation, species protection, and water conservation.
Fintech startups like Cultivo collaborate with NGOs to bridge the gap between financial institutions and landowners, ensuring they leverage data to assess restoration potential. In today’s climate landscape, businesses have an obligation to combat climate change in alignment with the Paris Agreement, making it imperative for financial institutions to utilize sustainable data effectively.
Dr. Pinuela stresses that time is of the essence in the global effort to restore the environment. While incremental actions, such as tree planting, are being pursued, it’s crucial to address broader landscapes and their economic impacts on rural communities.