New Forests: Mobilizing finance for sustainable forests and the climate

New Forests is a specialist investment manager offering leading-edge strategies in forestry, land management and conservation. New Forests’ philosophy recognizes that investment can drive both the productive use and long-term stewardship of forests.

New Forests was founded in 2005 on the idea of forests as “natural infrastructure” for our planet, providing the services and goods that society needs to thrive. The company aligns its investment strategies with the SDGs through its commitment to sustainable forest management. 

More information

More information is available at www.newforests.com.au and through the SDG Dashboard from New Forests’ latest Sustainability Report.

Key SDGs impacted

Summary

Forests and forest management are critical to climate change mitigation, yet only 3% of climate finance today goes to forests and land use. New Forests mobilizes institutional and impact capital to the forest sector through differentiated strategies targeting sustainable forestry market opportunities in three regions: United States, Southeast Asia and Australia/New Zealand. Since 2010, the company has developed assets and funds under management of more than USD $ 4 billion, covering nearly one million hectares of forestry and conservation finance investments.

New Forests reports on the climate impact of these investments and seeks to monetize carbon value where possible. For example, the company manages more than twenty forest carbon offset projects for the California carbon market and a forestry investment program that seeks to acquire high carbon value forests and optimize management for a sustainable supply of timber and carbon revenues. In Southeast Asia, New Forests designed a “blended finance” structure, using development finance and mission-driven funds to catalyze private investment and achieve higher levels of reforestation, restoration and climate mitigation alongside commercial plantation forestry.

Background

As global demand for forest resources grows, there is a need to increase productivity while ensuring the conservation of the world’s natural forests and ecosystems. New Forests seeks to create investment strategies delivering strong returns while providing lasting solutions to this challenge.

Through its three regional investment strategies, New Forests aims at responding to major trends driving the future forestry, and provides responsible investment approaches to capitalize on the sector’s shift toward highly productive, renewable forest resources through sustainable forestry investment and management.

New Forests is aligned with SDG Target 15.2, “By 2020 promote the implementation of sustainable management of all types of forests, halt deforestation, restore degraded forests, and substantially increase afforestation and reforestation globally.” The company is also actively contributing to SDG 13’s target for mobilizing finance for low carbon development and publishes an SDG Dashboard to report on progress in achieving the SDGs targets and indicators through sustainable forestry investment.

Initiative

Climate-smart forestry and opportunities to increase the role of forests and wood products as carbon sinks are vital to growing forestry as an asset class. The forestry asset class is increasingly attractive to investors not just for its financial characteristics but also for their ability to deliver climate benefits and meet sustainable development needs. By working with institutional and impact investors, New Forests brings capital to the forest sector for market opportunities aiming to supply growing timber demand while providing multiple benefits for people and planet, including climate mitigation.

Investing in sustainable forestry meets a combination of financial and impact objectives. New Forests focuses on developing and executing investment models that can be transformative through their application of best-in-class forestry and sustainability practices, realization of multiple revenue streams including for natural capital, and alignment of forestry investment with opportunities to create shared value. 

Key outcomes & lessons learned

New Forests is proud of our achievements to date, including:

  • Developing and selling more than USD 140 million in carbon offsets for California’s cap-and-trade program
  • Managing investments that were the first commercial plantation forests involved in Australia’s Emissions Reduction Fund
  • Reporting publicly on the carbon and climate impacts of our portfolio since 2015.
  • Developing a proprietary approach for managing impact through our Sustainable Landscape Investment framework

Launching an SDG Dashboard that reports on indicators of progress as a private business contributing to the achievement of the SDGs

Next steps

New Forests continues to offer scaled investment opportunities in the forest sector and anticipates further growth and engagement in climate-smart forestry, including the maturation of forest carbon markets and the recognition of the vital role of the forest sector in limiting climate change. The company relies on its local expertise combined with its global perspective to attract more diverse sources of capital to the sector and to support the expansion of forestry as a natural infrastructure asset class.

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