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Scottish National Investment Bank commits £50m to woodland management

Scottish National Investment Bank commits £50m to woodland management

The bank’s investment will support widescale creation and management of forests in Scotland, as well as boost biodiversity in the area, improve air quality, reduce soil erosion, and capture an estimated 1.2 million tonnes of CO2 over two decades.

The Scottish National Investment Bank is an impact investor, focussed on delivering both commercial returns and mission impacts with its capital. It is also an investor of alternative asset management group, dedicated to sustainable investments, Gresham House Forest Growth & Sustainability Fund – which is supporting the management of the 140,000 hectares of forest.

Eilidh Mactaggart, CEO of the Scottish National Investment Bank, said: “The bank’s cornerstone investment is designed to encourage other investors to follow us into this new type of forestry fund. We believe this opportunity to be an excellent fit for the bank’s ambition to lead the way on innovative mission aligned investments.”

In order to generate returns, the Scottish National Investment Bank will sell timber from the woodland. Any trees harvested will be replanted, and the product generated will enable the provision of raw materials for more sustainable packaging and building materials.

This impactful project also seeks to create carbon credits in the form of Woodland Carbon Units (WCU) – a tonne of CO2 that has been sequestered in a WCC-verified woodland – which can be used to offset carbon emissions on a voluntary basis. “This flexible strategy allows investors to choose to use the carbon credits generated for offsetting purposes or sell the units to create an income,” said Olly Hughes, managing director, Forestry, Gresham House.

The new planting element and ability to generate carbon credits is a novel investment proposition that mainstream investors are yet to fully embrace.

Comments: (1)

Graham Nicholls
Graham Nicholls - FIS Global - Edinburgh 20 August, 2021, 11:01Be the first to give this comment the thumbs up 0 likes

Developing further mono-culture forestry does not improve bio-diversity and may impact it adversley depending on the existing environment it will replace. Additionally, continous replanting of areas with the same tree species alters soil composition and makes the whole area susceptible to disease (Canada is currently a mass die off due to the spread of a fungus). This would have more value if planted with mixed forestry that can provide several types of wood for selling on, some of which will have a premium value over standard conifer plantations.  Hopefully that is what is being planned.