Brunel’s bet on nature pays off as Microsoft signs 10-year carbon removal deal
One of the UK’s LGPS Pools is set to benefit from growing corporate demand for carbon credits
Carbon removal platforms Anew Climate and Aurora Sustainable Lands announced this week that they have signed a 10-year agreement with US tech giant Microsoft. The transaction includes the delivery of 4.8 million nature-based carbon removal credits in exchange for the protection of 425,000 acres of forestland in the US.
The projects, developed by Anew Climate and owned and managed by Aurora Sustainable Lands, span ecologically diverse forestlands in New York, Virginia, West Virginia, Kentucky and Florida, and utilise Improved Forest Management (IFM) to generate nature-based removal credits.
Large tech firms such as Microsoft are increasingly relying on carbon credits to meet their ambitious net zero targets amid growing acknowledgement that the energy-intensive rollout of AI presents a new challenge.
Microsoft announced its target to become “carbon negative” by 2030 in 2020. However, over the past five years its carbon footprint has grown by more than 23%.
Growing corporate demand for carbon credits could provide a significant tailwind for investors in nature, including Aurora Sustainable Lands – a climate-focused manager which has acquired over 1.7 million acres of US forestland with a history of industrial logging and now manages these lands using a carbon stewardship management strategy.
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“Aurora Sustainable Lands is a joint venture between Anew Climate and a group of equity investors led by Oak Hill Advisors, AB CarVal, EIG and GenZero. One of the early backers of Aurora is the LGPS Pool Brunel Pension Partnership, which became a co-investor in Aurora through the third vintage of its Infrastructure Portfolio, advised by StepStone.
“Unlike Brunel’s earlier vintages of infrastructure portfolios, the third vintage, launched in 2022, does not include a dedicated ‘renewables sleeve’. Instead, it targets decarbonisation through a broad range of themes including natural capital but also more traditional infrastructure investments such as those necessary for decarbonisation of transport or energy efficiency” explains Jaime Alvarez, who leads the Sustainable Infrastructure and Private Equity strategies at Brunel.
With assets not having been fully deployed, Brunel has not disclosed the fund’s performance.
The portfolio is backed, among others, by the Avon Pension Fund, which had committed £19m as of December 2024, and by Gloucestershire, which has committed around £7m.
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