Evolution Environmental Asset Management (EEAM), a new environmental asset management firm, aims to raise $1 billion for its Premium Carbon Offset Fund. This voluntary offset fund aims to generate risk-adjusted returns while improving the environment through emissions reductions.
Based in New York, EEAM was started by a team lead by Andrew Ertel, the CEO and Founder of Evolution Markets.
EEAM’s Premium Offset Fund is seeking an 8% rate of return with a 10-year investment horizon (five-year investment period followed by a five-year harvest period). The minimum investment amount is $1 million.
EEAM said it would use its proprietary Intelligent Carbon Offset System (ICOS) to assess existing projects based on integrity and compliance eligibility. The fund will only purchase offsets that obtain a “premium” rating based on their in-house system.
Through the use of ICOS, EEAM has evaluated more than 5,500 offset projects – and is committed to only invest in those that meet their strict guidelines. The goal is to initially focus on offset projects that avoid emissions and offer low-cost alternatives to emissions, then gradually expand into carbon removal projects. The fund will favor projects that support biodiversity and gender equality.
EEAM has also expressed interest in direct air capture projects and bio-energy initiatives with carbon capture and storage as those technologies become available.
In addition to their ICOS, EEAM plans to utilize tools from existing registries such as SD VISta from Verra and SDG Impact Tool from Gold Standard.
In a statement, EEAM said, “As corporates are more closely scrutinized on their ESG commitments, the reputational appeal should drive these offsets to trade at a premium. Our conviction is that offsets with environmental integrity that have been screened for these long-term criteria will appreciate significantly in value as the voluntary market matures.”
With the global offset industry anticipated to be worth nearly $22T by 2050, it’s no wonder that EEAM is feeling confident.