Institutional investors can now receive distributions in the form of carbon credits to offset their portfolio’s emissions through a new strategy launched by specialist asset manager, Gresham House.
The Forest Growth & Sustainability strategy aims to deliver sustainable capital growth through productive woodland creation while providing income generation from already existing forestry assets.
Timber sales and capital growth of land and trees in existing forests will both generate returns.
The planting of around 10,000 hectares of woodland will enable the sequestration or capture of carbon, thereby generating carbon credits as well as sustainable capital growth.
Distributions will be issued in the form of verified carbon credits that can be used to offset carbon in a portfolio, or sold on to provide income.
As the global price of carbon increases, so will the value of carbon credits.
“By combining exposure to commercial forestry and carbon sequestration, this offers an opportunity to benefit from capital growth and income generation, whilst meaningfully combating climate change,” said director of forestry and private clients, Anthony Crosbie Dawson.
“Additionally, sustainable forestry offers protection against mounting inflationary pressures alongside strong portfolio diversification due to its uncorrelated returns.”