Press release 9 September 2024

Our pioneering investment in Rebalance Earth

West Yorkshire Pension Fund makes a pioneering investment in Rebalance Earth, the UK's first boutique fund manager for a new asset class: Nature.

Local government pension fund joins boutique Natural Capital fund manager on a mission to close the £50-£100 billion needed for Nature restoration in the UK as a significant minority shareholder.

The West Yorkshire Pension Fund (WYPF), part of the large £60 billion plus Northern LGPS pool alongside Greater Manchester Pension Fund and Merseyside Pension Fund, has made a pioneering investment in Rebalance Earth, the UK's first boutique fund manager entirely focused on Nature as an investable asset class. Rebalance Earth finances Nature as infrastructure, which provides climate adaptation and resilience for companies, communities and cities across the UK.

WYPF, with approximately £20 billion in assets under management, has the largest in-house investment team within the underlying local authority pension fund sector. Based in Bradford, WYPF aims to provide secure retirement incomes to its 300,000 members across Leeds, Bradford, Calderdale, Kirklees, and Wakefield while simultaneously creating a better future through impact investments.

Leandros Kalisperas, WYPF's Chief Investment Officer, stated, "Investing in Rebalance Earth is crucial for fostering innovative solutions and backing UK growth. As a large asset owner with a long-term horizon, we have a responsibility to provide direct patient capital to Nature as infrastructure and to start to address critical issues like climate change adaptation and resilience here in the UK."

Nature as Business-Critical Infrastructure
UK companies face increasing risks from Nature-related threats such as floods and droughts. The recent London Climate Resilience Review highlighted that flooding alone costs UK businesses an average of £82,000 each. The Environment Agency states that 185,000 businesses in England and Wales are at risk of flooding, and it is estimated that an insufficient water supply will cost London's economy £500 million per day by 2050. WYPF's investment in Rebalance Earth aligns with the urgent need to mitigate these risks through Nature-based infrastructure solutions.

Robert Gardner, CEO and Co-founder of Rebalance Earth emphasised the importance of this investment: "WYPF is setting the standard on the level of commitment needed to put the brakes on the UK climate and Nature crisis. With their investment, we can build an expert team, launch our fund, and restore landscapes and seascapes across the UK. Nature is our ally against climate change, and we need to start rebuilding this natural infrastructure to protect our companies, communities and cities."
 
Pioneering Nature Investments
The launch of the RE(DARWIN) fund: "Rebalance Earth Delivering Adaptation, Resilience, Water Infrastructure through Nature", will facilitate the allocation of capital to protect and restore Nature at scale in the UK. This investment will provide valuable ecosystem services targeting five problem areas:

1) Flooding
2) Drought
3) Water quality
4) Biodiversity and ecosystem health
5) Carbon emissions

Rebalance Earth's strategy is to make a clear business case for companies to pay for Nature restoration in their local areas. This approach not only benefits the environment but also increases companies' operational resilience through Nature-as-a-Service (NaaS) contracts. These contracts function as long-term offtake agreements, generating stable cashflows that offer attractive risk-adjusted returns for investors. Additional returns are achieved through Biodiversity Net Gain (BNG) units and Voluntary Carbon Credits. Once it can be proven that Nature generates cashflow, it becomes an investable asset class.

Walid Al Saqqaf, CTO and Co-founder of Rebalance Earth, highlighted the strategic focus on water management: "Our investment in Nature-based solutions will address water quantity and quality issues. By deploying our own cutting-edge technology that harnesses AI, remote sensing, and geospatial mapping we can intelligently guide investments in natural landscapes to reduce flooding and maintain supplies during dry spells. At the same time, rivers and wetlands can filter pollutants, ensuring cleaner water for ecosystems and human use."

Over the next decade, Rebalance Earth aims to mobilise over £10 billion towards restoring Nature across the UK. Gardner emphasised, "A '2% for Nature' allocation from the £5 trillion in UK pension and wealth assets would generate the necessary funds to address the estimated £50-£100 billion needed for Nature restoration in the UK." (RE)DARWIN enables pension funds to make a profitable investment in the UK's future, using Nature as infrastructure to create resilient and thriving companies, communities and cities.

The Value of Nature
Darran Ward, Investment Manager for Alternatives at WYPF, added, "Our decision to invest in natural infrastructure aligns with the three key investment beliefs agreed with our Investment Committee: investment in climate solutions; sustainable cities and communities; and economic growth and innovation driving decent work. These UN SDG-based goals focus on sustainable, resilient and scalable business strategies, which we believe are critical to long-term value creation."

WYPF's catalytic investment in Rebalance Earth provides the capital required to demonstrate the powerful impacts of investing in Nature as business-critical infrastructure. This strategic partnership showcases a scalable and transformative approach to solving the UK climate and Nature crisis.