Sustainable Finance Deal Secures $210 Million for Nationwide Tree-planting Initiative

A major sustainable finance deal that closed late last year exemplifies how fintech innovation and finance are teaming up to fight climate change. While the US public sector has significantly scaled back its sustainability initiatives in the last year, US-based afforestation startup Chestnut Carbon secured a $210 funding deal for its nationwide tree-planting initiative.

Backed by lenders including JPMorgan Chase, it is the largest financing deal of a voluntary carbon removal project of this kind. By contrast, such projects have traditionally been funded by small investors and NGOs, with larger investors seeing them as too risky.

While the deal didn’t prominently feature any specific fintech company, fintech-enabled due diligence and assurance were fundamental to pulling it off. Environmental Resources Management (ERM), the world’s largest sustainability consultancy, served as the technical advisor on the project’s commercial and environmental viability, bringing its powerful fintech tools and expertise to evaluate Chestnut Carbon’s business model. The process involved a thorough assessment of everything from the supply chain for seedlings to the credibility of Chestnut Carbon’s accounting methods, ensuring they were aligned with standards like the Integrity Council for Voluntary Carbon Market’s Core Carbon Principles. This gave lenders confidence through data and third-party verification, changing the perception of what could otherwise have been seen as a risky bet on green initiatives into a bankable asset.

Despite being extraordinary, the deal does signal a growing appetite among mainstream investors for sustainability-focused solutions, provided they can ensure their impacts are real and measurable and address greenwashing concerns. Historically, investors stayed clear of such projects due to concerns over permanence and measurement (hence greenwashing fears). However, fintech is helping address these issues now that they have access to satellite imagery and IoT sensors in forests to monitor carbon projects in real time. This provides transparency to investors, while ongoing monitoring requirements—which were part of the agreement—obligate Chestnut Carbon to report metrics and uphold standards.

The deal demonstrates that banks are increasingly willing to finance sustainability initiatives, provided risks are adequately addressed. That’s where fintechs come in by providing specialized validation and monitoring solutions like carbon accounting, ESG data analytics, or green project verification. Fintech undoubtedly has a central role to play in the transition to a sustainable economy, and embracing that new reality could open new markets, while fulfilling a socially beneficial mission.