Octopus Investments and Treeconomy have announced that they have forged a new partnership and together have been awarded an ‘Unlocking Space for Business’ grant from the UK Space Agency.
Unlocking Space for Business is delivered by the UK Space Agency to foster innovation by combining satellite data and services with other data sources and technology, to drive benefits for businesses in both financial services and transport and logistics. The programme will provide government funding to support pilot projects in this area.
Octopus recently announced the launch of its natural capital strategy, aiming to generate high-integrity carbon removal credits through investment in conservation, nature restoration, and sustainable land management. The team is committed to embracing technology to achieve efficiency and impact for the new strategy, which is why it has partnered with Treeconomy for this grant.
Treeconomy’s extensive experience in using AI and remote sensing technologies will provide Octopus with leading digital measurement, reporting, and verification (dMRV) services for carbon and nature projects. This is important as one of the key components of creating high-integrity carbon credit projects is the ability to effectively monitor, measure, and verify what is happening on the ground in a transparent and cost-effective manner.
The aim of the project is to pilot and embed the use of satellite-based analytics and data tools to guide and support investment decisions related to nature-based carbon projects, such as afforestation. The project will use investment underwriting principles in order to develop, refine and integrate a satellite data product within Octopus’s standard due diligence, evaluation, and reporting workflows.
Harnessing technology in this way will increase both speed and efficiency, to help finance reach quality nature restoration projects more quickly. Accelerating nature finance is essential given the urgency of the twin crises of climate change and biodiversity loss, and an estimated $700bn annual nature funding gap.
Alex Godfrey, Investment Director at Octopus Investments, said, “We’re really excited about this project, and with the help of a rising star in Treeconomy, we will be able to help streamline investment into our natural capital projects. By integrating earth observation technology into the diligence process, we will gain unique insights that will allow our strategy to become increasingly robust and data driven. We strongly believe that satellite-based insight, pioneered in the UK, can bring vital speed, trust, traceability, and transparency that has historically been missing from carbon markets.”
The partnership will yield a framework and solution to support a growing class of natural capital investors globally, much beyond Octopus.
It is estimated that global voluntary carbon markets alone will grow from $2bn to $50bn by 2030. While global flows of finance to nature-based solutions totalled $200bn in 2022, a mere 18 per cent of this was from the private sector. UNEP estimates that total annual nature investment must triple by 2030, with private investment increasing by seven times. While natural capital is gaining prominence as both a theme and asset class, many asset managers and investors are struggling to source and then conduct cost-effective due diligence on prospective investments. This project offers a means for improving market stakeholder confidence and attracting further private capital to address the urgent global nature funding gap.
Robert Godfrey, Co-Founder at Treeconomy, said, “We’re delighted to be collaborating with Octopus Investments in this first-of-a-kind partnership that combines our organisations’ respective strengths in finance, technology, and ecology. With a shared commitment to innovation and impact, Octopus is an ideal partner with which to propel a nascent market in natural capital. We are thankful to the UK Space Agency for supercharging our efforts with their funding, which will allow us to embed space technology into Octopus’s natural capital due diligence process. That UKSA awarded our proposal the highest overall score is a valuable recognition of the importance of this partnership and what we aim to achieve together. The planet can’t wait and neither can we: we’re all looking forward to getting started.”
Dr Craig Brown, Investment Director at the UK Space Agency, said, “We’re looking forward to working with Octopus and Treeconomy on this project, which will trial how satellite data can help with the allocation of private finance towards nature and conservation efforts. This is a great example of how satellite data can be used to grow our green economy.
“The Unlocking Space for Business grants and contracts are just some of the ways the UK Space Agency is kickstarting growth and creating high quality jobs to position the UK as a leading space economy. It’s vital we help tackle the barriers organisations are facing, particularly those that have not traditionally used satellite data or services, or considered how space can benefit their bottom line.”