AMC on Investment Grade Carbon Credits
Carbon credit AMC from Orpheus and CCC targets institutional market
Global expert Professor Lisa Wilson, and a group of key institutional backers, have teamed up with UK-based Orpheus Capital Management, headed by Andrew Wolfson, to launch a carbon credit AMC, offering liquid access to a portfolio of high-quality, investment-grade carbon credits. The portfolio offers long-term growth and an opportunity to hedge against the future cost of carbon offsetting for governments, corporates, asset managers and institutional investors.
Wilson is the global head of strategic partnerships for the Carbon Capital Corporation (CCC), a licensed Australian financial services company which advises clients on origination, structuring, financing and carbon optimisation of large-scale, capital-intensive infrastructure and climate projects. CCC is part of the Green Bond Corporation, a Luxembourg-based, specialist global advisory group.
Wilson is a preeminent international business leader, recognised for her achievements in innovation, entrepreneurship, ecosystems, climate, ESG, blockchain and emergent technology. In 2024, she was applauded for delivering the fifth most important sustainability announcement at the World Economic Forum in Davos, calling for US$100 billion to flow unobstructed into climate programmes with new financial tools.
“Carbon credits are playing a vital role in addressing climate goals, enabling countries like Singapore which can’t produce sufficient credits, to purchase credits from nations like Ghana to balance their own emissions.”
Carbon credits are issued under international, national or independent carbon offset standard accrediting programmes, with more than 540 different project methodologies. Various compliance and voluntary mechanisms or frameworks are used to trade the ‘units’. However, each unit always represents one metric tonne of CO2 either reduced, removed or avoided into the atmosphere or environment.
A carbon credit becomes ‘used’ or offset when it is permanently retired through carbon accounting principles and is no longer tradeable. The carbon credit is used to ‘offset’ countries, companies and those producing emissions to account for, or balance, an equivalent environmental or atmospheric emission they have made. The carbon credit is then retired and can no longer be traded or counted again.
By 2030, the carbon credit market is projected to reach between US$7 billion and US$35 billion.
The MSCI Global Carbon Credit Report 2024
By 2050, it could climb to US$250 billion.
Wilson emphasises the need for democratising the market for carbon assets, which are often generated in the Global South, emerging and least developed countries, but benefit the Global North and developed nations.
Carbon credits offer these regions a valuable, new asset class to attract capital into climate-friendly projects, while the AMC structure overcomes obstructions faced by institutional capital whose mandate prevents direct project risk.
The AMC offers investors a liquid, listed investment that meets ESG criteria and an ability for capital to flow into projects.
“However, complexity fuelled by fear and an unnecessary lack of understanding has complicated and slowed their adoption.” By including them in structured products listed on international exchanges like Switzerland, Wilson looks forward to carbon credits becoming an international export commodity for disadvantaged nations. This democratisation shifts the focus from venture capital to revenue-based growth for carbon projects and devolved autonomy. “The rising price of carbon emissions is a key driver in the global transition to a cleaner future.
This new AMC and carbon asset class can potentially be used to gain investment exposure to the carbon market at current pricing in a way that is aligned with ESG values, whilst diversifying portfolio exposure into an uncorrelated asset class.”
The AMC will be an open-ended private placement with a Swiss ISIN number, offering a balanced portfolio of investment-grade carbon assets aligned to institutional risk compliance. It is looking to raise a primary issuance of US$500 million ahead of its June launch. Minimum investment is US$1 million, making the product suitable for institutional, professional and sophisticated investors.