Climate

With drought leading to record-high water prices in south-east Australia last year, investors have started to look north in search of returns – but there are huge barriers to overcome. Daniel Kemp investigates what efforts are being made to unlock the opportunities.

The Sydney-based forestry investment manager has published its first Climate Disclosure Report and may publish fund-level climate targets in the future.

New Forests’ Australia New Zealand Forest Fund 3 has acquired its first asset in Western Australia, purchasing hardwood plantation assets near Bunbury from Mitsui Bussan Woodchip Oceania.

The blended finance vehicle has also attracted investments from the European Investment Bank as well as French and British government agencies.

Credit Suisse has highlighted the 'perfect margin squeeze' for agribusinesses and primary producers presented by water scarcity but efficiency innovation continues to present investment opportunities.

The experience of London-based start-up Growing Underground and the previous excitement created by its predecessors, suggests institutional capital could enter the fray sooner rather than later.

Cofounder Steven Dring says the start-up expects to reach its target 'pretty soon' and is working on building out a new cohort of hydroponic farms with partners.

As one of the few companies basing its business model on initiatives designed to re-imagine ag as a solution to climate change, the fortunes of Indigo Agriculture could prove to be a timely acid test.

Digital Agriculture Services found a strong correlation between drought-affected and fire-hit land, with 86% of fire-hit land suffering at least a 1-in-10-year rainfall deficit.

The firm's first two funds have almost raised a combined $250m from family offices and will invest in Norwegian ag and energy companies before exporting them to South-East Asia.