For the past two years, the carbon credit markets have been growing faster than ever before and, according to UN Special Envoy for Climate Action Mark Carney, the voluntary carbon market 'needs to be a $50 - 100 billion per annum market' to meet the Paris Agreement target by 2050.

But what is a carbon credit? How is it created and how does the market work? What is the difference between voluntary and regulated carbon market? Can investment strategies be focused on carbon credit generation and trading?

Mirova has for many years developed a natural capital and carbon finance expertise, with innovative strategies, a 17 year track record and lessons learned. Carbon credit is a specific asset, for which risks and opportunities need to be carefully assessed. At the same time, strong integrity is needed to avoid green washing and any controversies.

This session was about presenting the basics of carbon markets and explaining how investment strategies can leverage carbon credit value to create value and positive impact.

Learning outcomes

• What a carbon credit is and how it is created. 
  
• How the market for carbon credits works.  
  
• How risks and opportunities for such an investment can be assessed. 
  
• The suitability of carbon credits for pension funds. 

Questions and comments were moderated by Karen Shackleton of Pensions for Purpose.   

Speaker biography

Gautier Quéru, Director of the Mirova Land Degradation Neutrality Fund, Mirova 

Gautier Quéru is head of the Land Degradation Neutrality (LDN) Fund team. He has more than 15 years of experience in structured products, investment management and funds dedicated to sustainable development. Within Mirova, he has been in charge of the conceptualization, development and implementation of the LDN Fund since the signature of the partnership with the UNCCD.

Gautier joined Natixis group in 2004 when the European Carbon Fund (ECF), a €140 million fund dedicated to projects to reduce CO2 emissions and international carbon markets, was launched. From 2004 to 2013, Gautier acted successively as investment manager, portfolio manager and fund director of ECF.

Gautier is an engineer specialised in environment and energy from National Polytechnic Institute of Toulouse and is also a graduate of Sciences Po Paris.

The Paris Alignment Forum

The Paris Alignment Forum was established by Pensions for Purpose to help pension funds and other asset owners on their journey towards alignment with the goals of the Paris Agreement. We do this by sharing climate-related thought leadership written by our Influencer members (asset managers, consultants and lawyers), by running free training workshops for trustees and by engaging in industry-wide conversation through our quarterly all-stakeholder and asset-owner events. To find out more please click here. 

Pensions for Purpose

Pensions for Purpose exists as a bridge between asset managers, pension funds and their professional advisers, to encourage the flow of capital towards impact investment. Our aim is to empower pension funds to seek positive impact opportunities and mitigate negative impact risks. For more information please email Charlotte O'Leary.