Intro
In Beyond the Canopy, the podcast presented by Alexander Watson, CEO at OpenForests, we dive deep into innovative approaches to ecosystem restoration and impact-driven investments.
In this episode, Alexander sits down with Michael Rumberg, Managing Director at Volkswagen Climate Partner. Together, they explore what makes a forest carbon project successful and why impact metrics are essential to attract investment.
The episode
About Michael Rumberg
Michael Rumberg is the Managing Director at Volkswagen Climate Partner, a joint venture between Volkswagen and Climate Partner, focused on developing and financing high-quality carbon offset projects. With a strong background in forestry and a blend of academic and entrepreneurial experience, Michael has dedicated his career to advancing land-use projects that foster both environmental and socioeconomic benefits. His hands-on approach and deep expertise in project evaluation, risk management, and impact measurement have made him a key player in driving sustainable investments in nature-based solutions.
Transcript
Alexander Watson:
Welcome to Beyond the Canopy, our podcast where we explore the most innovative approaches to ecosystem restoration and impact-driven investments. I’m Alexander from OpenForests Explorer. Today, we’re focusing on what makes a high-quality forest carbon project and why impact metrics are essential to attract investments. Our guest today is Michael Roomberg, Managing Director at Volkswagen Climate Partner, a joint venture between Volkswagen and Climate Partner. The company focuses on developing and financing certified carbon offset projects with high-quality standards. Michael has extensive experience guiding, evaluating, and supporting forest projects from concept to implementation. Today, we’ll explore what makes a good project and how quality attracts investment in nature-based projects. Welcome, Michael, and perhaps you could start by introducing yourself.
Michael Rumberg:
Hi Alexander, pleasure to be here. Thanks for the invitation. I’m excited to talk about one of my favorite topics—how to channel finance into land-use based projects. To give a bit of background about myself, I have a forestry background, and I’ve always been at the interface between academia and business. My focus has been on performance-based payments for ecosystems and ecosystem services, always trying to find good pathways to turn ideas into tangible, quality products.
Alexander:
Great! Let’s dive into today’s topic. What defines a strong forest carbon project, and what should project developers get right from day one?
Michael:
If we start with the fundamentals, there are three key elements to a successful forest carbon project. First, you need to increase the carbon stock on the land. Essentially, the goal is to store more carbon on that specific plot of land after the project than before. This may sound simple, but it’s critical to ensure measurable carbon sequestration, such as changing forest management practices, for example, from conifers to broadleaf trees. The second element is enhancing ecological quality. The project needs to improve the ecosystem—flora and fauna included. The third element is social acceptance. The project needs to benefit not just the landowner but also the local community and other stakeholders in the area. So, it’s a three-fold approach: carbon stock, ecological impact, and social benefit.
Alexander:
I see. Over the years, as you’ve evaluated many projects, have you learned to spot any red flags or risks early on?
Michael:
Yes, all land-use projects have risks, but you can start spotting them early by understanding the project’s core drivers. First, is there an actual problem that needs solving? Without that, there’s no reason to initiate a project. The second risk is community involvement—if the community isn’t willing to participate, it’s unlikely the project will succeed. Lastly, every project will have its implementation risks, and it’s important to identify the various interests involved. Conflicts of interest from day one are common, so understanding the local stakeholder landscape is critical for success.
Alexander:
And when you’re evaluating these projects, how do you approach it from an initial desk review to an in-person field visit?
Michael:
Typically, we begin by reviewing the project proposal and establishing a relationship with the local project developer. We need to make sure we understand each other’s expectations. We ask if they’re familiar with investor language or if they’ve been more used to grant-based systems. After this initial stage, we go on-site, especially if the project is large or especially interesting. The desk review gives us the first impression, but field visits allow us to assess the real situation and any challenges on the ground.
Alexander:
Interesting! Do you think some projects underestimate how much transparency and structured information investors need?
Michael:
Yes, many projects do underestimate the level of transparency required. At Volkswagen Climate Partner, we don’t want to be seen as a burden but rather as an enabler. Our goal is to ensure that the project is structured properly for long-term success. For instance, we’ve had situations where we’ve increased the project’s budget to ensure it’s feasible, while also reviewing and sometimes questioning the financial planning to ensure its sustainability.
Alexander:
It sounds like you’re really hands-on with the projects, not just evaluating them but helping to co-develop them. How does that collaboration work on the ground?
Michael:
Exactly. It’s a collaboration. We’re not here to impose but to guide and support. If the local team doesn’t have the expertise to meet regulatory requirements, we step in with the right tools and frameworks. The key is to find the right balance between the local team’s capabilities and our experience to ensure the project succeeds long-term.
Alexander:
And do you use any specific tools or metrics to assess projects, such as GIS analysis or scoring systems?
Michael:
Yes, we use geospatial analysis to assess environmental aspects like carbon storage potential. For example, satellite images can show changes in forest cover or deforestation impacts. For socioeconomic impacts, we rely on social science tools like interviews and field observations, but we are still testing these and working toward integrating them into our standard practices.
Alexander:
I love how this is a truly collaborative effort, with mutual learning between the developers and investors. Now, looking at the future of the market, how do you see the role of biodiversity and ecosystem services evolving alongside carbon projects?
Michael:
I think carbon credits will continue to be the primary currency, but biodiversity and other ecosystem services like water conservation and soil erosion prevention will definitely gain traction. The challenge is that biodiversity credits are harder to measure and standardize compared to carbon, which makes it more difficult to create a market around them. However, as these metrics evolve, I’m optimistic about their potential to complement carbon projects in the future.
Alexander:
You’ve mentioned that the carbon market is evolving. Do you foresee any major changes coming up in the next few years?
Michael:
Yes, the carbon market is becoming more fragmented, with a shift toward carbon removal projects and stricter regulations. The challenge now is finding demand—who will invest in these projects and how will they be used. It’s still early, but I believe this landscape will evolve in the next two to three years.
Alexander:
Before we wrap up, Michael, what motivates you to continue this work, and what gives you hope for scaling nature-based solutions?
Michael:
My love for nature drives me every day. I’ve always enjoyed being outdoors, and over the years, I’ve realized that our role is to channel finance into meaningful projects that benefit both the environment and the people involved. There’s not enough public funding to tackle climate change, so private finance is crucial. That’s why I’m motivated to keep working on it. And despite the challenges, I have hope because of the great initiatives and passionate people I see working in the field.
Alexander:
That’s inspiring, Michael. Thanks for joining us and sharing your insights today.
Michael:
Thanks for having me, Alexander. It was a pleasure!
Closing Remarks:
Thank you for tuning into this episode of Beyond the Canopy! We hope this discussion on the complexities and opportunities in forest carbon projects gives you a better understanding of the landscape and what it takes to attract investments for nature-based solutions. Don’t forget to subscribe for more game-changing insights on ecosystem restoration. Stay tuned for our next episode!
