Climate Change Solutions Leveraging Nature—Al Gore's Just Climate Raises $175 Million from Microsoft and CalSTRS

When addressing climate change, many investors focus on the energy and transportation sectors. However, investments in 'Nature-Based Solutions (NBS)'—which leverage equally critical natural environments such as ecosystems, forests, and agriculture—have historically been insufficient. To bridge this gap, Just Climate, founded by former U.S. Vice President and environmental activist Al Gore, has raised $175 million from Microsoft and CalSTRS (California State Teachers' Retirement System). This article provides an easy-to-understand explanation of the significance of this new funding and the specific initiatives for climate change countermeasures that utilize nature.

1. What are Nature-Based Climate Change Solutions?

1-1. Basic Concept of NBS

Nature-Based Solutions (NBS) aim to address both the causes and impacts of climate change by leveraging the power of nature, such as through reforestation, sustainable agriculture, and biodiversity conservation. The United Nations Environment Programme (UNEP) also emphasizes the importance of NBS, stating that 'nature is one of the most affordable and effective climate change solutions.'

1-2. Current Investment Landscape

According to 2022 statistics, global investment in climate change countermeasures reached approximately $1.46 trillion, but only $35 billion of that was allocated to NBS, representing a very small fraction of the total. Compared to the energy transition and EV (electric vehicle) sectors, nature-related projects currently receive less attention from investors.

2. Just Climate's Initiatives and the Purpose of the New Fund

2-1. What is Just Climate?

Just Climate was established in 2021 as a division of Generation Investment Management, co-founded by Al Gore and David Blood. While it has previously focused on investing in climate solutions within the industrial sector, it has begun to expand its efforts into NBS in earnest starting this year.

2-2. Funding from Microsoft and CalSTRS

This $175 million funding round was provided by Microsoft's Climate Innovation Fund and CalSTRS. As Microsoft advances its own carbon neutrality efforts, it is also focusing on nature-based carbon offsets. For CalSTRS, NBS is an attractive investment target that offers the potential for stable, long-term returns.

2-3. Investment Targets of the New Fund

Just Climate's new fund plans to invest in a variety of nature-related projects, such as the following:

• Reforestation projects
  For example, planting new trees on degraded land to absorb carbon dioxide.

• Bio-fertilizers and bio-pesticides
  Promoting sustainable agriculture that utilizes microorganisms instead of relying on chemical fertilizers.

• Verification technologies for carbon reduction and biodiversity conservation
  Technologies that use environmental DNA (eDNA) to accurately assess local biodiversity.

3. Specific Case Study: Investment in NatureMetrics

3-1. What is NatureMetrics?

The first company Just Climate selected for investment this January was the UK-based NatureMetrics. This company provides technology that utilizes environmental DNA (eDNA) to analyze trace amounts of DNA floating in soil or water, allowing for the rapid assessment of biodiversity in a given region.

3-2. Potential of eDNA Technology

Traditional biodiversity surveys have primarily relied on on-site visual observations and trap surveys. However, these methods are time-consuming, costly, and prone to human error. eDNA is an innovative technology that allows for the comprehensive and highly accurate identification of 'all species present in a location' through simple sample collection.

With investment from Just Climate, NatureMetrics is scaling its survey operations, enabling companies and government agencies worldwide to quantitatively demonstrate their biodiversity conservation efforts.

4. Why Investing in Nature is Important

4-1. NBS Contribution to Climate Change

Agriculture, forestry, and land-use changes account for approximately 15% of global greenhouse gas emissions. However, by implementing appropriate NBS, we can not only reduce these emissions but also absorb and sequester carbon dioxide already present in the atmosphere. Reforestation and wetland restoration are said to have the potential to absorb billions of tons of CO₂ annually.

4-2. The Biodiversity Crisis

According to a report by IPBES (Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services), approximately one million species of plants and animals are at risk of extinction due to human activity. Climate change and biodiversity loss are closely linked, and a sustainable future cannot be built by addressing only one of them.

5. The Stance Required of Companies and Investors

5-1. Moving Away from Short-Term Profits

The background to NBS being undervalued until now is the perception that 'returns are difficult to see in the short term.' However, from a long-term perspective, efforts toward climate change mitigation and biodiversity conservation lead to improved social credibility, reduced regulatory risk, and the creation of new market opportunities.

5-2. The Fusion of Technology and Nature

In recent years, new solutions combining AI and IoT technology with NBS have emerged. The move by major technology companies like Microsoft to actively support NBS can be seen as a symbol of this trend.

While decarbonization of energy and transportation is progressing, measures that leverage our greatest ally—nature—are still in their infancy. However, as this move by Just Climate demonstrates, a 'future that coexists with nature' is certainly beginning to attract attention.

An era has already begun where companies, investors, and consumers are all required to understand the importance of NBS and take action toward a sustainable society.

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