ImpactAlpha, November 14 — Manulife Investment Management, part of Canadian insurance giant Manulife, is raising a $500 million fund to invest in timberlands that prioritize carbon sequestration over timber production, its first such dedicated fund. “There is strong investor demand in strategies that may help support carbon emissions reductions and net zero commitments,” said Manulife’s Tom Sarno.
Early investors in the Manulife Forest Climate Fund include Japan’s MUFG Bank.
The fund will invest in forests that can generate carbon credits with sustainable forest management practices. It will also pursue conservation easements, non-timber income, and limited harvests. Forests and forest products capture and store nearly 15% of fossil fuel-based carbon emissions in the US. Manulife will invest in reforestation and afforestation, or planting trees in areas without tree cover.
Sustainable real assets
Manulife manages nearly $15 billion in timberland and agriculture assets spanning roughly 5.5 million acres in the US, Canada, New Zealand, Australia, Brazil and Chile. The Forest Climate Fund “is one of the natural climate solutions we have developed to sequester carbon more intensively and drive broader impact,” said Manulife’s Eric Cooperstrom.
The fund is classified as an “Article 9” fund for its sustainability objectives under the European Commission’s Sustainable Finance Disclosure Regulation, or SFDR.