Our Solution
Combining carbon footprint reduction with liquidity and a tangible impact on social and environmental issues.
LIQUID PORTFOLIO OF BONDS WITH HIGH ESG STANDARDS
LIQUID PORTFOLIO OF BONDS WITH HIGH ESG STANDARDS
The Plan provides exposure to a basket of European investment grade corporate bonds with high ESG standards in line with Febelfin Towards Sustainability initiative and UN Global compact principles and with strict financial criteria on liquidity, risk control and yield.
CARBON REDUCTION AND OFFSETTING
CARBON REDUCTION AND OFFSETTING
Bonds are also screened based on their issuers carbon emissions and energy transition strategy, following a scoring method provided by Moody’s ESG Solutions.
The remaining carbon footprint of the portfolio is offset every quarter through the purchase of Verified Emission Reductions certificates, issued by the Project Kasigau Corridor REDD+ in Kenya.
SOCIAL AND ENVIRONMENTAL IMPACT
SOCIAL AND ENVIRONMENTAL IMPACT
The Project protects threatened forests, the wildlife that live in them and provides communities with a sustainable and transformative development path. REDD+, Reducing Emissions from Deforestation and Degradation, is a climate change mitigation strategy introduced by the United Nations. The plus sign relates to additional benefits for the local community and biodiversity.
Combatting climate change together
From Kyoto to Paris, the major agreements over the last 30 years.
1992
United Nations framework convention on climate change (UNFCCC)
The UNFCCC is the first international climate agreement within the UN framework. It seeks to reach a better understanding of climate change, proposing solutions for cooperation between countries so as to limit the effects of climate change. To date, it has been ratified by 195 countries and recognises three main principles: the precautionary principle, the principle of common but differentiated responsibilities and the principle of the right to development.
1997
Kyoto Protocol Application 2005-2020
In the mid-1990s, the signatories of the UNFCCC became aware of the need to take more stringent measures to reduce greenhouse gas emissions (GHG). In 1997, they adopted the Kyoto Protocol which sets the target for the 38 most industrialised countries in the world to reduce their overall emissions of 6 GHG by 5% compared with the levels observed in 1990. Three flexible mechanisms were put into effect to help countries achieve this: Emissions Trading (ET), Joint Implementation (JI) and the Clean Development Mechanism (CDM).
2015
Paris Conference on climate change (COP 21) Application 2020-2030
In December 2015, 195 countries adopted the very first legally binding universal agreement on climate change, which will come into effect in 2020. The Paris Agreement lays the foundations for an international action plan aiming to limit the planet’s temperature increase to 2 degrees Celsius compared with pre-industrial levels. A key point of the COP 21 was discussion surrounding the lack of climate financing in order to achieve the 2°C objective.
2016
17 Sustainable Development Goals (SDGs)
Adopted unanimously in September 2015 at a historic United Nations Summit, the SDGs came into effect in January 2016 for a time horizon of 2030. The SDGs initiative aims to involve all countries and civil society as well as covering all aspects of sustainable development: economic growth, social inclusion and environmental protection. The flagship objectives are to put an end to all forms of poverty, to combat inequalities and to tackle climate change.
For more information visit United Nations Climate Change
How it works
Eligible Bonds: a pool of liquid Bonds with extra financial data representative of the European Investment Grade bond market
LIQUID ESG
ESG Filters
Controversial activities : excluding bonds which the issuer has a significant involvement in controversial activities such as Alcohol, Civilian Firearms/Military, Gambling, Nuclear Power, Pornography or Tobacco;
BNP Paribas Asset Management ESG Score: excluding the ones with a BNP Paribas Asset Management ESG decile of 9 or 10 (10 being the worst decile);
Moody’s ESG Solutions ESG Score: selecting the ones with a Moody’s ESG Solutions ESG score among the top 75% and above 30/100.
Liquidity
A succession of a dozen of criteria such as amount outstanding, minimum tradable amount, credit rating, time-to-maturity, coupon type, maturity type are applied in order to discard the bonds which are not liquid enough.
Risk Control
A long-only portfolio comprised of bonds whose weight is between 0% and 1.5%, resulting on a minimum of 67 bonds
Diversification rule with a maximum exposure of 5% per issuer;
Use of control mechanism on the tracking error
Promising yield
The bonds eligible for inclusion in the portfolio are in the top 75% of the European Investment Grade Market in terms of yield-to-maturity
Performance objectives in line with the Benchmark
A controlled tracking error aiming at delivering a return in line with the European investment grade bond market
Leading Energy Transition
Following a scoring methodology by Moody’s ESG Solutions, only bonds which issuers have the most robust and ambitious energy transition strategy can be included in the portfolio in order to contribute positively to the overall Energy Transition score of the portfolio
Carbon Reduction
The carbon footprint of the final portfolio is reduced by at least 50% compared to the European Investment Grade Market.
Carbon Offset
BNP Paribas Asset Management France determines the amount of VER certificates necessary for offsetting the remaining carbon footprint of the portfolio (Scope 1 + Scope 2) every quarter:
- Scope 1 concerns the direct emissions of companies (e.g. fuel consumption)
- Scope 2 concerns indirect emissions due to the business’s activity (e.g. electricity supplier’s fuel consumption)
- Scope 3 concerns indirect emissions due to the use of products sold (e.g. fuel consumption by the client’s electricity supplier due to use of the product). With the available data, the CO2 emissions relating to Scope 3 are difficult to access and incomplete. Scope 3 is therefore not taken into account.
VERs from the Kasigau Corridor REDD+ project will be purchased and immediately cancelled so as to materialise the offsetting and be properly recognised.
Voluntary Carbon Market
VER certificates, also known as “voluntary carbon credits”, are bought in the voluntary carbon market, which coexist with regulated trade and exchange systems within the Kyoto protocol and other regional agreements. VER certificates tend to be cheaper than the carbon credits sold in the regulated market, subject to higher demand by large energy installations.
CARBON FOOTPRINT REDUCTION & OFFSET
IMPACT
When Carbon Offseting brings Social and Environmental Impact
The proceeds of the VER certificates are allocated to the project Kasigau Corridor REDD+ in Kenya, supporting local community, wildlife and forestry conservation. Investors benefit, through their financial contribution in a highly positive social and environmental impact project, from an enhanced brand value and reputation, which will ultimately attract the increasingly climate conscious consumer base.
Rebalancing
This investment process is repeated on a quarterly basis so as to update both bonds portfolio and the amount of VER certificates to be purchased.
Rebalancing dates: beginning of March, June, September and December.
The impact of your investment
Benefits of the Kasigau Corridor REDD+ Project.
A positive climate impact
- Protection of more than 500,000 acres of Kenyan forests under threat, securing the whole migration corridor between the Tsavo East and Tsavo West national parks.
- The project will make it possible to offset over 1 million tonnes of CO2 per annum for the next 30 years.
Wildlife protection
- Protection of over 300 wildlife species, including more than 2,000 endangered African elephants and other endangered species such as cheetah and grevy’s zebra.
Social co-benefits
- Creation of more than 300 jobs, the majority of which are filled directly by local community, with 30% of the workforce being female.
- Development of eco-tourism, agroforestry and jobs linked to parkland conservation.
Contributions to the United Nations’ Sustainable Development Goals
- To generate revenue, VERs generated from the Kasigau Corridor REDD+ Project are sold on the voluntary market
The proceeds from VER sales are shared with local landowners and the community who are involved in the forest conservation efforts
- Direct: cash payments are made directly in cash to >6,000 landowners and >340 employees
- Indirect: these are made through supporting critical livelihood needs including education (bursaries or schools), healthcare, water harvesting and agriculture intensification methods
Wildlife Works also stimulates business by improving access to markets for various products including apparel, soaps, Jojoba oil and community crafts
Most of the activities listed under the rest of the SDGs also directly or indirectly contribute towards reducing poverty
Source: Wildlife Works, July 2019
Project achievements
- Over 100,000 mature seedlings distributed to various community sites for planting
- Two women’s groups supported to set up greenhouse based agri-business ventures growing a variety of vegetables, moringa, neem and jojoba for consumption and sale
Source: Wildlife Works, July 2019
Project achievements
- Over 50,000 patients have benefitted from diagnostic services since construction of the County Referral Hospital’s lab in 2014, and over 100,000 tests have been conducted
- 1100 students have received sexual health and sanitation training
Source: Wildlife Works, July 2019
Project achievements
- Over 11,400 secondary school and college bursaries have been awarded for local students
- 17 x 40-student classrooms constructed or restored
- Desks provided for 12 classrooms with 40 students each
Source: Wildlife Works, July 2019
Project achievements
- Long term average of 30% female staff at 100% wage parity with male staff, despite many roles being traditionally male in Kenyan society, e.g. wildlife rangers, greenhouse workers
- Supported over 40 craft groups comprising over 1200 women through training, purchases over $150,000 USD and international market promotion
- Provided long term support to two women’s groups to establish greenhouse based agri-businesses
- Provided sexual health education under the GLOW program to over 1000 girls
Source: Wildlife Works, July 2019
Project achievements
- Over 25,000 community members provided access to clean water
- 24 community water projects, pipeline extensions and repairs, water tanks and reservoirs, and rock catchments
- Water access for 6 schools with over 2000 students
Source: Wildlife Works, July 2019
Project achievements
- 8 permanent staff manually processing 1000-1500 0.5kg briquettes/week for over 5 years
- Over 100 tonnes of sustainable charcoal produced
- In 2017, the Kasigau Corridor project successfully leveraged R&D financing from the National Research Fund (NRF-Kenya) towards scaling up this venture
Source: Wildlife Works, July 2019
Project achievements
- Steady employment for community members over 20 years
- 90% from the Project Zone and Taita Taveta County
Source: Wildlife Works, July 2019
Project achievements
- The community engagement team also gives talks on recycling and basic environmental management during designated clean up days in local town centers and schools.
Source: Wildlife Works, July 2019
Project achievements
- The Kasigau Corridor REDD+ Project protects 200,000 ha (0.5 million acres) of dryland Acacia-Commiphora forest
- On average, the project prevents a gross of 1.8 million tonnes of CO2 from being released per year, or 54 million tonnes over the 30-year life of the project (equivalent to taking 2.5M passenger cars off the road).
Source: Wildlife Works, July 2019
Project achievements
- Ranger patrols: Between Jan 2011 and June 2019, Wildlife Works ranger outposts carried out 8,455 foot and vehicle patrols across the Kasigau Corridor project. Additionally, a mobile patrol team supported the outposts with information, logistics and back-up rangers. More than 1,000,000 km were covered during this period.
- Aerial surveillance: A total of 370 flight-days were completed between July 2018 and June 2019 by two gyrocopters, covering 77,980 km of aerial surveys. This has resulted in improved monitoring of High Conservation Value species and enhanced detection of incidents; more than 25% of all incidents recorded during the reporting period were originally detected from an aerial patrol. A total of 1986 wildlife sightings (encounters) were recorded during the aerial patrols in this period, comprising 22 High Conservation Value species.
- Long term safe breeding habitat provided for endangered and threatened species: elephant, cheetah, Grevy's zebra, leopard, lion, secretary bird, spotted hyena, wild dog.
Source: Wildlife Works, July 2019
Wildlife Works
A REDD+ Project Developer and Manager.
1997
Creation of Wildlife Works
1998
Launch of the first project in a wildlife sanctuary in Rukinga, covering 80,000 acres of forest
2010
Expansion of the wildlife sanctuary to protect 500,000 acres in the Kasigau Corridor
2011
Kasigau Corridor world’s first REDD+ project to be verified under the Verified Carbon Standard (VCS) and the Climate, Community and Biodiversity Standards (CCB standards)
2016
The International Finance Corporation, from the World Bank group, selected the Project as underlying for the first “Forests Bond” ever issued
2017
Kasigau Corridor REDD+ project Winner of Best Offsetting Project by Environmental Finance
2019
The protection area now protects over 500,000 acres of forest, preserving the habitat of over 300 species and providing direct benefits for over 120,000 people
Partnership with BNP Paribas
Check the full article here and visit About Global Markets for more information on our Global Markets Sustainable offer.
For more information visit www.wildlifeworks.com
Wildlife Works counts among its main shareholders Allianz and The Kering Group, who also offsets its unavoidable emissions through the Kasigau Corridor REDD+ project.