Key Takeaways
- Manulife Investment Management Launches Forest Climate Fund: The Manulife Forest Climate Fund (FCF) is a new initiative from Manulife Investment Management aimed at promoting climate change mitigation through sustainable forest management, with an initial funding commitment of $224.5 million towards a $500 million target.
- Focus on Carbon Sequestration and High-Quality Carbon Credits: The fund prioritizes carbon sequestration over timber production, with strategies including enhanced forest management, afforestation, reforestation, and generating high-quality carbon credits.
- Supporting Investors’ Climate Goals: Manulife FCF allows investors to support their climate change mitigation goals while aiming for competitive financial returns through carbon credits, conservation easements, and limited timber harvests.
- Compliance with the European Commission’s Sustainable Finance Disclosure Regulation: As an impact investment strategy, the fund aligns with the European Commission’s Sustainable Finance Disclosure Regulation (SFDR), Article 9.
- Manulife’s Extensive Experience in Sustainable Practices: The company oversees millions of acres of certified timberland and farmland, demonstrating a commitment to sustainable forestry and agricultural practices.
The Forest Climate Fund
Manulife Investment Management, recognized as the world’s largest manager of natural capital, has announced the initial close of its Manulife Forest Climate Fund LP (FCF). This closed-end fund, which has secured commitments totaling up to $224.5 million, aims to reach a target of $500 million. It presents a unique opportunity for qualified U.S. investors and confident global institutional investors to contribute to climate change mitigation through sustainably managed forests, focusing on carbon sequestration surpassing timber production.
The strategic objective of the FCF is to allow investors to invest in timberlands managed to enhance sustainable forest management practices. This approach is designed to create high-quality carbon credits by increasing stored carbon in the forest and establishing new forests through afforestation or reforestation. The fund plans to utilize various strategies, including carbon credits, conservation easements, non-timber income generation strategies, and limited timber harvests, to achieve potential climate benefits and competitive financial returns.
Tom Sarno, Manulife’s global head of timberland investments, emphasized the growing demand for climate change mitigation solutions and the strong investor interest in strategies supporting carbon emissions reductions. He believes the Manulife Forest Climate Fund can support investors’ diverse climate goals and objectives, enhanced by the company’s experience in sustainable forest management and commitment to high-quality carbon sequestration.
Manulife FCF is focused on generating a long-term supply of high-quality carbon credits. These credits can be used directly for investors’ climate goals or monetized in carbon markets through offset sales. This approach positions the fund as a pioneering carbon-focused impact investment strategy aligned with Article 9 of the European Commission’s Sustainable Finance Disclosure Regulation (SFDR).
Eric Cooperstrom, managing director of impact investing and natural climate solutions at Manulife Investment Management, highlighted the significance of the fund in expanding the company’s decades-long experience in sustainable timberland management. He noted the importance of responsible commitments to reducing and removing emissions, including through high-quality forest carbon credits, to help investors meet their climate and financial objectives.
Manulife Investment Management oversees approximately 5.5 million acres of timberland across various countries, certified under sustainable forestry standards. Additionally, the company manages around 400,000 acres of prime farmland, demonstrating a commitment to sustainable practices and robust management. Manulife Investment Management, part of Manulife Financial Corporation, serves over 17 million clients worldwide, providing access to diverse investment solutions across multiple asset classes, including natural capital strategies.
Photo by Steven Kamenar on Unsplash
