Reinsurer plants new roots for carbon capture future

Munich Re has unveiled a new carbon removal initiative which it described as a long term solution as the underwriting group drives towards its net zero targets.

TreeTrust is a Munich Re corporate venture, which brokers and structures afforestation projects for carbon removal.

Beginning this month its first two clients, the Vaillant Group and Munich Re, will invest in company forests. The initial carbon removal project began with the planting of trees across more than ten million square metres of former grassland in northern Costa Rica.

“As these new forests grow over the next 40 years, they will capture more than 600,000 metric tons of CO2,” explained Munich Re.

TreeTrust’s partner and project developer, BaumInvest, will oversee the afforestation on site and issue the CO2 certificates. The project in Costa Rica will help re-establish a rainforest, similar to the original one, that benefits from excellent biodiversity and water. In addition, jobs created by the project will enhance the outlook for locals. The plan is to roll out similar projects, all based on UN Sustainable Development Goals.

“More and more companies are looking for dependable ways of capturing carbon, as they need to offset their inevitable operational emissions to meet their net-zero targets,” the reinsurer said. “For this reason, the demand for premium carbon credits has increased substantially in recent years.”

Experts estimate that the market volume will need to grow by a factor of 15 between now and 2030 in order to meet the Paris Agreement’s global climate targets.

“A new provider in this market, TreeTrust facilitates and structures transactions for corporate clients who are seeking efficient access to ambitious, Gold Standard-certified afforestation investments for carbon removal,” added Munich Re. “TreeTrust solutions combine the climate and risk expertise of Munich Re with the excellence of experienced project developers.”

Jens Wichtermann, director of sustainability management at the Vaillant Group: “By 2030, the Vaillant Group will reduce the carbon emissions from its manufacturing and business operations by 50%. We will offset the remaining emissions through afforestation projects. Our first-ever own endeavour will be helping to re-establish the Costa Rican rainforest, a project that meets our quality and sustainability standards. It thus constitutes a key cornerstone of our ambitious long-term climate strategy.”

Michael Menhart, in charge of sustainability at Munich Re, added: “Our project with TreeTrust is an innovative, high-quality solution that will help us achieve our net-zero targets between now and 2030, but also thereafter.

“As one of our long-term solutions, the new afforestation project enables us to offset our unavoidable operational emissions by means of the new forest that will soon start growing in Costa Rica. What’s more, this forest project will hedge against rising prices for voluntary carbon credits.”

Andreas Heger one of the managers of TreeTrust, explained: “Our goal is to create a new, premium range of solutions in the market for voluntary carbon credits. Companies are willing to invest in offsetting their emissions. We help them select just the right long-term projects, while saving them time.”

“A lot of companies set ambitious climate protection targets. They want to offset inevitable carbon dioxide emissions by capturing the same amount from the atmosphere. In a carbon offset market where supply is scarce, TreeTrust organises suitable afforestation projects for discerning companies,” added Torsten Jeworrek, Member of the Board of Management. “Munich Re has been researching the risks of climate change for over four decades. Our innovative approaches here emphasise prevention, risk transfer and resilience. TreeTrust is now leveraging our expertise in the carbon offset market, in turn aiding the transformation towards a climate-neutral economy.”

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