The Times - UK (2022-05-02)

34 Monday May 2 2022 | the times

Business

retain his outstanding LTIP awards,

pro-rated for time worked and subject

to the achievement of stretching per-

formance conditions and a two-year

post-vesting holding period”.

Glass Lewis said that Indivior’s re-

sponse to the shareholder revolt was

largely a “reiteration of the same

points” the company had made previ-

ously and that the US Department of

Justice investigation into the marketing

of Suboxone led to “substantial reputa-

world emitted 36.4 gigatonnes. There-

fore, Greenpeace has argued that “it is

always better to reduce emissions

directly. Carbon dioxide removal

should be used at most for a minority of

net zero targets and not to offset any ac-

tivities that can be reasonably avoided.”

The voluntary carbon offsetting

market is bedevilled not only by the im-

pression that it offers an excuse to avoid

cutting emissions but also by the diffi-

culty of determining whether an offset-

ting scheme has sequestered any

carbon at all. The Vatican fell foul of this

in 2007 when it paid the American busi-

nessman Russ George for a tree-plant-

ing scheme that resulted in not a single

tree being planted.

This difficulty has created demand

for a premium product, a carbon credit

that has been verified. It is the market

Leggett intends Bunloit to supply.

With that goal in mind, the Bunloit

team has contracted the services of

Treeconomy, a company founded in

2018 that uses new technology to accu-

To the passing hiker, the northwest
shore of Loch Ness looks like an un-
peopled wilderness. To Jeremy Leggett,
it looks like a successful business at
work. He knows one when he sees one,
having left Greenpeace in 1996 to found
Solarcentury, one of the UK’s largest
renewable energy companies.
Leggett, 68, sold Solarcentury to the
Norwegian state-owned renewables
company Statkraft in 2020, but he is not
planning a quiet retirement.
In March of that year he bought
Bunloit, a 1,200-acre estate on the
banks of Loch Ness. Now, working with
a team of foresters and ecologists, he
believes he has found a way to make a
profit from rewilding the estate and
fighting climate change.
“We’ve got four goals as a company,”
says Ben Hart, Bunloit’s carbon and
biodiversity accounting consultant.
“They are to increase the amount of
carbon the land draws out of the air,
increase biodiversity, provide local,
nature-based jobs and make
the whole thing
sustainably profit-
able.”
The Bunloit
team has been re-
storing the estate’s
ecology by taking
down fences to al-
low animals to
move more freely,
and by planting
broadleaf trees.
Curiously enough,
they also cut trees
down, felling the
rows of non-native
Sitka spruce that
previous foresters
had planted on the peat bogs.
The removal of these will help the bogs
recover and draw down more carbon.
The team’s efforts to restore biodiver-
sity and sequester carbon are crucial to
their plan to make a profit. As well as
earning money from ecotourism, the
estate aims to sell carbon and biodiver-
sity credits.
When companies damage nature or
emit carbon into the air, they could buy
these credits to show their overall

impact

on the planet is positive. Some sources

of emissions, such as aviation, are diffi-

cult or even impossible to mitigate, and

if these practices can’t be cut out, offset-

ting them is currently the only available

route to net zero.

As net-zero targets have proliferated,

the price of nature-based carbon cred-

its has boomed. Between August 2020

and August last year, the market in vol-

untary carbon offsets grew by 58 per

cent, from $472.9 million to

$748.2 million. Mark Carney, the

former governor of the Bank of

England, said last October that “this is

a 100 billion to 150 billion dollars-a-

year market if we get it right, and the

only way we get it right is if it’s high

integrity.”

Critics have questioned the integri-

ty of carbon offsets in several ways. To

some environmental activists, the very

idea of offsetting looks like an excuse

for companies to forgo reducing their

emissions at source.

That would not be so much of a prob-

lem if the planet had unlimited land on

which to grow trees. The UN Intergov-

ernmental Panel on Climate Change

has estimated that the maximum sus-

tainable carbon drawdown from new

forests is somewhere between 0.5 and

3.6 gigatonnes a year. Last year, the

Loch Ness eco-project eyes monster profits

Green energy pioneer

hopes Highland estate

can unlock potential in

selling carbon credits,

Ben Cooke reports

rately assess carbon sequestration.

Treeconomy is assessing the carbon se-

questered at the Bunloit team’s second

site, Beldorney, an expanse of pasture

and forest in Banffshire. Its work will

give Hart a baseline against which to

measure the site’s future carbon se-

questration, allowing him to work out

how many carbon credits the estate has

generated.

The Treeconomy team quantifies the

carbon sequestered by flying a drone

that shoots out lasers at its surround-

ings and records how long it takes for

them to bounce back. The team com-

bines that data with satellite data to

create a 3D model of the landscape.

From this, it can deduce how much bio-

mass it contains. By repeating the pro-

cess annually, it can determine how

quickly the vegetation is growing, and

infer how much carbon it is storing.

This method promises a greater level

of accuracy than that demanded by the

Woodland Carbon Code, the quality

assurance standard for nature-based

carbon offsets in the UK. The Wood-

land Carbon Code estimates how much

carbon different environments capture.

Because its estimations are inexact,

the code subtracts 20 per cent from the

result as a buffer against inaccuracies.

The code is especially conservative in

its estimations of how much carbon is

captured by the uneven, messy scrub-

land of the kind that the Bunloit team

intend to grow at Beldorney.

The accuracy of Treeconomy’s tech-

nology should allow the Bunloit team

to show they have far more carbon

credits to sell than the Woodland

Carbon Code would estimate. Hart

thinks it could reveal “potentially up to

50 per cent more carbon”. It should also

allow them to charge a premium for

those credits. Treeconomy recently

brokered a deal with TDR Capital, a pri-

vate equity firm, for £35 per tonne of

carbon sequestered.

The Bunloit team has not yet sold any

carbon credits, and Hart expects that,

for the foreseeable future, ecotourism

will be a more important revenue

stream. “But ideally what we’d like to

have is carbon and biodiversity credits

being a bigger part of the piece.”

He shares the worry of many env-

ironmental activists about companies

using offsets to avoid decarbonising.

“We do have to reduce carbon in line

with science,” he said. “Carbon markets

are a good mechanism for going faster,

by offsetting emissions in the mean-

time. But ideally you’d get to 2050 and

there would be very few carbon em-

issions remaining to be offset.”

Jeremy Leggett’s company Bunloit is

rewilding an estate beside Loch Ness,

left, to create a verifiable source of

carbon credits to offset emissions

peat bogs

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PETE SUMMERS FOR THE TIMES

Indivior shareholders urged to block payout to jailed boss

The drugs company Indivior has been
criticised by a shareholder advisory
group for not justifying the “good leav-
er” status of its jailed former boss.
It is under scrutiny before Thursday’s
annual meeting over the exit pay of
Shaun Thaxter, who was imprisoned
for six-months in the US after pleading
guilty in 2020 to charges relating to the
marketing of its anti-opioid addiction
treatment.
Glass Lewis expressed “severe reser-
vations” about Indivior’s remuneration
report and recommended that inves-
tors oppose it for a second consecutive
year. It said Indivior’s response to
shareholder dissent after an investor
revolt at the annual meeting a year ago
over Thaxter’s pay was “insufficient,
particularly given a portion of Thax-
ter’s awards remain outstanding”.
Thaxter, 54, who is British, could be
in line for up to £1.6 million under per-

formance share awards granted in

2020, which are due to vest in March,

based on Indivior’s recent share price.

Glass Lewis has also recommended

that shareholders oppose the re-

appointment of Daniel Phelan, 72, the

remuneration committee chairman.

In May last year just over 38 per cent

of voting shareholders opposed Indivi-

or’s remuneration report.

Indivior, which is based in Slough, is

a FTSE 250 company and was spun off

from Reckitt Benckiser in 2014.

Thaxter admitted “causing the intro-

duction into interstate commerce” of

Suboxone film, Indivior’s best-selling

oral anti-addiction treatment, which

had misbranded safety information.

In October Indivior said that “given

the absence of any findings of personal

wrongdoing or malfeasance by Thax-

ter, the board and the remuneration

committee felt in good conscience that

it could not pursue malus and clawback

claims and determined to allow him to

tional damage for the company and a

significant loss in shareholder value”.

In July 2020 Indivior agreed to pay

$600 million to US authorities and ad-

mitted a criminal charge to resolve the

investigation.

Thaxter was fined $100,000 and or-

dered to forfeit $500,000 when he was

sentenced in October 2020. He was re-

leased from jail in May last year, having

complained of “extraordinary restric-

tions” and “unanticipated hardships” in

prison during the pandemic.

ISS, another shareholder advisory

group, has recommended that inves-

tors vote for Indivior’s remuneration

report this year. However, it said it was

“not without concern” because no

“sufficient action” appeared to have

been taken to address the concerns. ISS

concluded that provisions had been put

in place to “avoid similar scenarios”.

Indivior declined to comment. Thax-

ter’s share awards remain subject to the

firm’s malus and clawback policies.

Alex Ralph Ocado’s plan to hand chief £100m stirs up trouble

Ocado could face

opposition from

investors to its plan to

extend a lucrative share

award scheme that

could hand its chief

executive £100 million

(Ben Martin writes).

Institutional

Shareholder Services

and Glass Lewis, two

advisory groups, have

recommended that

investors reject a

proposal to lengthen its

“valuation creation

plan” at its annual

general meeting on

Wednesday. Royal

London Asset

Management, which is

an Ocado shareholder,

is opposing the

proposal, according to

The Mail on Sunday.

Tim Steiner, the

Ocado chief executive,

can receive a maximum

annual payout of

£20 million a year under

the scheme, meaning

he stands to collect up

to £100 million over the

next five years.

He is unlikely to

receive a payout under

the plan this year,

because the share price

has fallen. The shares

closed last week at

924p, down from almost

£29 in January last year.