Bank of Ireland (BOI) has developed a “nature-based” funding instrument aimed at carbon sequestration, biodiversity and public amenities.
The ‘Woodland Nature Credit’ is designed to allow companies to fund large-scale afforestation and record the environmental and social benefits of the new woodlands, a statement from the bank said.
The Woodland Nature Credit was developed for Coillte and Forestry Partners – a group whose stated purpose is to assist the business community in contributing to climate and environment goals.
The first tranche of the new product was announced yesterday, with AXA Ireland financing the planting of 600,000 native trees through the purchase of €2 million of credits.
The new native woodlands will “provide recreational amenities for local communities while sequestering and storing carbon and creating biodiverse new habitats,” BOI says.
The forests will be planted and managed by a new entity being established by Coillte and Forestry Partners.
Purchasers of the credits can report on these benefits under the EU Non-Financial Reporting Directive.
The credit has been designed to be EU taxonomy compliant (EU Taxonomy is a system of classification for environmentally sustainable economic activities); and to meet the upcoming EU Corporate Sustainability Reporting Directive, which will be an auditable requirement for corporates.
“The Woodland Nature Credit will finance the establishment of large-scale new native woodlands in Ireland. In return, the funders will receive an environmental coupon in the form of carbon sequestration, biodiversity uplift and amenity value,” explained Paul Flynn, chief operating officer (markets) for BOI.
“The scaling up of nature-based solutions will be critical in the fight to arrest climate change and biodiversity loss,” Flynn argued.
Imelda Hurley, Coillte chief executive, said that the initiative “will facilitate the business community to play a key role in increasing the native tree cover in Ireland”.