Forest Invest

In today's conversation, I chat with Peter Kristensen, Director, Head of Biomass Sustainability at the Danish energy company, Ørsted. Peter describes Ørsted's transition plan and how they are using nature-based solutions to abate their remaining emissions (only 2%!) after executing their ambitious Science-based targets emission reduction plan. In this conversation, we discuss why Ørsted has targeted the global south for their NbS project development, why they do everything in-house and explains some of the great projects they are supporting. Lots of boots on the ground lessons from this chat!

19:05

"One thing is sure: if you don't have local partners who are really committed, have the knowledge, and so on, then it is a no-go."

27:29

"I would encourage people to ensure the financing that they need before they start knocking on doors. Otherwise, we'll jeopardise this whole carbon market project; I don't think anyone will benefit."

Peter Kristensen LinkedIn: https://www.linkedin.com/in/peter-k-kristensen-gcb-d-106a32/

Ørsted: https://orsted.com/

Favourite trees: Oak and Scots Pine

00:58

Intro to Ørsted

02:55

Ørsted's nature-based solutions - science-based targets (reduce emissions) & carbon projects

04:24

Why Global South

05:32

Projects

09:51

Design and execution standards

11:22

Internal and external contributors

13:01

Local community participation, agreement, and remuneration

15:04

Using, selling. retiring carbon credits

16:33

Run daily business and operations (system evaluation)

18:01

Learning curve with each project

19:57

Evaluate a local partner

21:00

Government support/legislation

21:47

Exit strategy

24:00

Extra benefits - education

24:40

Next steps (target of 2%)

26:26

Must ensure financing - actionable advice

29.27

Contact details

1. Nature by MaxKoMusic/Soundcloud
2. Sopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary, IRELAND by wild_rumpus/Soundcloud

Sign up now for the ForestLink’s newsletter, where you’ll receive technical advice, reflections, and best-practice guidance to support you with your forest-linked investment strategy or business straight to your inbox.

Hosted on Acast. See acast.com/privacy for more information.

In today's episode we dig into all things technical site evaluation with Dr. Colin Smith of Paperbark Consulting. Colin is an expert soil scientist, and today he shares his vast experience in plantation forestry, giving insights that will support investors (and forest managers for that matter) with what considerations should be made and questions should be asked when evaluating several technical plantation management factors. We talk about where certain tree species do best and get into specifics on soil, water, climate, the importance of research, ecological deserts and more.

4:16

"The most dangerous thing in a forestry investment plan is a spreadsheet"

43:37

"Make sure they get a good independent opinion about what they're up to. In some cases, consultants try to make projects look good to attract investment, and I think there is a big danger in that; not to be seen as a wet blanket, but I think people need a realistic appraisal."

Host: Shauna Matkovich - The Forest Link

Producer: Magdalena Laas - https://www.linkedin.com/in/laasmagdalena/

Dr. Colin Smith's email: [email protected]

Linkedin: linkedin.com/in/colin-smith-900b051a

Favourite trees: Acacia Sieberiana and Eucalyptus deglupta

The Center for International Forestry Research and World Agroforestry (CIFOR-ICRAF): CIFOR

Theory of Change Webinar: Theory of Change Webinar

00:44

Professional background and focus of work (Paperbark Consultancy)

04:09

The complicated process of forest management

05:54

Interesting assignments (real stories)

09:05

Macro-level technical considerations when investing in forestry

13:08

Micro-level technical considerations

15:41

Issues with native species

17:56

Dispell myths around Eucalyptus, specifically water usage

23:30

Irrigation of plantations

30:59

Climate change & species matching

36:25

Invest in research and technical expertise

39:03

Info on sustainability studies - eucalyptus & PH levels of soil (CIFOR)

43:36

Actionable advice for forestry investors

44:46

Contact details

1. Nature by MaxKoMusic/Soundcloud
2. Sopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary, IRELAND by wild_rumpus/Soundcloud

Sign up now for the ForestLink’s newsletter, where you’ll receive technical advice, reflections, and best-practice guidance to support you with your forest-linked investment strategy or business straight to your inbox.

Hosted on Acast. See acast.com/privacy for more information.

As there are no widely accepted definitions in the lexicon that makes up responsible investing, semantics are important. This is because how you define terms like ESG, sustainable and impact investing as they relate to forest investments will have different implications - it could be in the types of forests you invest, the geographies of your investment, the end markets, return expectations and so on. In this episode, I take you through the definitions of these terms that I apply in my work and provide you some examples to make sense of it. I argue that its not the definition per se that matters, only that everyone in your organization shares the same definition and that you apply it credibly and consistently. I explain why an integrated approach to ESG, sustainable and impact investing will put your forest investments in the best position to succeed.

"Integrating these three features is the best way to future-proof your forest investments for financial performance and long-term social and environmental benefit."

Show notes:

Host: Shauna Matkovich - The Forest Link

Producer: Magdalena Laas - https://www.linkedin.com/in/laasmagdalena/

Important links:

Webinar: Theory of Change Webinar (subscribepage.io)

Favourite tree: Arbutus menziesii - Wikipedia

Details:

02:47ESG investing

05:01Sustainable investing

07:02Impact investing

11:09Integrated approach

14:12How to apply an integrated approach

15:15Webinar

15:37Actionable advice for forest investors

 Sound Library:

1. Nature by MaxKoMusic/Soundcloud
2. Sopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary, IRELAND by wild_rumpus/Soundcloud

Sign up now for the ForestLink’s newsletter, where you’ll receive technical advice, reflections, and best-practice guidance to support you with your forest-linked investment strategy or business straight to your inbox.

Hosted on Acast. See acast.com/privacy for more information.

Join me today as I speak with Anthony Traina, Co-Founder of Tropical American Timber, a value-added producer and distributor of tropical hardwoods. We talk about lesser-known species as well as household names in tropical hardwoods. We discuss sustainability and trust—two key factors in determining where Anthony has sourced his wood to date and where he is looking to expand in the future. We also discuss the conundrum of certification relating to market demand and administrative and cost burden. 

"Really look at the people on the ground and talk to them and get to know them to build that trust to see where the investments are going and being directed and that the projects are coming along as talked about. How are the communities interacting with the project?"

Show notes:

Host: Shauna Matkovich - The Forest Link

Producer: Magdalena Laas - https://www.linkedin.com/in/laasmagdalena/

Important links:

Tropical American Timber: https://tropicalamericantimber.com/

LinkedIn: https://www.linkedin.com/in/anthony-traina-974b2753/

Details:

01:43

Overview of Anthony's professional journey

05:19

Species of trees sourced and markets

09:26

Where timber/trees/wood is sourced from

12:39

Legal requirements for importing tropical hardwood

18:52

Interesting anecdote of Martin Guitar company requiring a single tree

20:10

Certification, sustainable harvesting, and forest investor (asset) requirements

25:47

Source countries in South America

27:50

Quality of product, sustainability, trust, and marketability

29:47

Business challenges

30:35

Main buyers

32:10

Actionable advice for forest investors

 Sound Library:

1. Nature by MaxKoMusic/Soundcloud
2. Sopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary, IRELAND by wild_rumpus/Soundcloud

Sign up now for the ForestLink’s newsletter, where you’ll receive technical advice, reflections, and best-practice guidance to support you with your forest-linked investment strategy or business straight to your inbox.

Hosted on Acast. See acast.com/privacy for more information.

Join me today in the second of a two-part series, as I speak with Anne Valto, Senior Development Impact Advisor at Finnfund - the Finnish Development Finance Institution. In our conversation, Anne describes how Finnfund evaluates impact in deal due diligence. She explains how often their investees are not initially well capacitated to manage for impact, and how they are supporting to resolve this. We talk about why Finnfund normally does not invest into 3rd party managed, forest asset only models, finding the balance between impact and financial objectives and impact permanence at exit. If you haven’t listened to the first episode, please go back and listen to my conversation with Peter Chappell on breaking down risks in emerging markets.

“In forestry and in biodiversity, as in most impact indicators, the high risk usually means that there are more opportunities to gain as well.”

Host: Shauna Matkovich - The Forest Link

Producer: Magdalena Laas - https://www.linkedin.com/in/laasmagdalena/

Details

 03:39

Impact evaluation in deal due diligence and the 5 dimensions of impact

05:00

Development Effectiveness Assessment Tool

06:21

How Finnfund goes beyond IFS PS to evaluate net biodiversity gain

07:51

How Finnfund supports traditional timberland managers to integrate impact

11:38

Biodiversity trainings for investees

11:52

Biodiversity pilot with MLR in Nicaragua

13:20

Sustainability capacity within Finnfund investee companies

14:29

Why Finnfund normally does not invest into 3rd party managed, forest asset only models

16:50

Finding the balance between impact and financial objectives

19:19

Does targeting impact mean forgoing returns?

23:40

Low hanging fruit for impact creation in forest investments

26:01

Impact permanence at exit

30:11

Actionable advice for investors new to the asset class

[5:50]              In forestry and in biodiversity, as in most impact indicators, the high risk usually means that there are more opportunities to gain as well.

[17:42]            So that's our role, taking more risks than, than a commercial investor would be willing to, to take.

[25:02]           It's often that you actually don't need to do that much to give a little bit of push for regeneration and restoration. In the environments where we operate, the more challenging part is then to also keep people out.

[28:01]           So if we would totally lose the impact for big money as an impact investor, I think that would be quite a red flag for us.

Finnfund: https://www.finnfund.fi/en/

MLR Forestal: https://mlr.com.ni/

 Sound Library:

1. Nature by MaxKoMusic/Soundcloud
2. Sopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary, IRELAND by wild_rumpus/Soundcloud

Sign up now for the ForestLink’s newsletter, where you’ll receive technical advice, reflections, and best-practice guidance to support you with your forest-linked investment strategy or business straight to your inbox.

Hosted on Acast. See acast.com/privacy for more information.

Join me today in the first of a two-part series, as I speak with Peter Chappell, Investment Manager at Finnfund - the Finnish Development Finance Institution which, like the country, has a long history of investing in forests. In our conversation, Peter explains why Finnfund’s mandate is for greenfield investments, and why financial viability is one of their primary impact criteria. We discuss the risks in the emerging markets where Finnfund invests, compared to those in timberland core markets. We discuss how to evaluate risk and the merits of forest investment in emerging markets, and talk about why its important to go in with an experienced partner. Next week, be sure to tune in, where we discuss the impact-side of Finnfund’s forest investment approach with Anne Valto.   

“But actually, our thesis is quite strong that ultimately the realisation of these positive impacts can only be sustained through financially viable, financially sustainable, you know, long term, successful businesses.”

Host: Shauna Matkovich - The Forest Link

Producer: Magdalena Laas - https://www.linkedin.com/in/laasmagdalena/

Details

 01:36

Introduction to Finnfund and their approach to forest investment

04:54

Financial instruments used by Finnfund in forest investment

07:02

Timberland in core versus emerging markets

11:03

Real vs perceived risk

13:33

Greenfield vs brownfield

16:27

Tips for investors considering emerging markets for the first time

19:51

Red flags to look out for in emerging market deal evaluation

22:16

Impact in emerging markets vs core markets

27:53

Challenges leading to emerging market track record

30:46

Other benefits of emerging market forest investment

[14:48]            "One of the issues we have as a DFI is that actually a pure brown field operation doesn't actually fit our mandate because we need to ensure we're making impact."

[21:10]           "Generally speaking, execution risks are the big risks."

[25:32]          "But actually, our thesis is quite strong that ultimately the realisation of these positive impacts can only be sustained through financially viable, financially sustainable, you know, long term, successful businesses."

 Sound Library:

1. Nature by MaxKoMusic/Soundcloud
2. Sopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary, IRELAND by wild_rumpus/Soundcloud

Sign up now for the ForestLink’s newsletter, where you’ll receive technical advice, reflections, and best-practice guidance to support you with your forest-linked investment strategy or business straight to your inbox.

Hosted on Acast. See acast.com/privacy for more information.

Join me today as I speak with Aleksandra Holmlund, CEO of Qarlbo Biodiversity for a glimpse into the biodiversity crediting mechanism she has championed in Sweden. In this conversation we explore the biodiversity finance mechanism developed in cooperation with the Swedish University of Agriculture that focuses on production forest landscapes. In a nutshell, the mechanism works from a baseline of business as usual forestry and attributes any net gains in biodiversity to come from conservation, restoration or diversification of forest management activities. In addition to the mechanics, we discuss the sentiments of key participants in making this biodiversity credit transaction work – the forest owner and the credit buyer. Tune in to learn more about this very pragmatic approach to biodiversity finance in production forests and see if you can learn a thing or two to apply in your own forest investments.  

Host: Shauna Matkovich - The Forest Link

Producer: Magdalena Laas - https://www.linkedin.com/in/laasmagdalena/

01:26 Introduction to Alexandra and her background

03:06 Mechanism for biodiversity credit system in production forestry in Sweden

06:20 Example of integration of timber management and biodiversity management

08:50 Proportion of land dedicated to each (specific property owner)

10:12 Carbon credits in Sweden

11:51 Effect of policy changes and legislation on biodiversity offsets and markets

14:16 Buyer’s motivation of obtaining biodiversity credits (specific example)

17:05 Local or global market opportunities?

19:04 MRV process for conservation, restoration and diversification & target setting

22:24 Market price for biodiversity & loss of harvesting income

23:22 Interest from forest owners in biodiversity pilot project

24:15 Funding?

25:06 Duration of commitment by forestry owner (20+ years)

25:48 Mitigate risk of forestry owner quitting project

26:52 Development of biodiversity certification – Swedish Biodiversity Alliance

29:10 Methodology applicable in another jurisdiction

31:30 Data collection methods & fine-tuning metrics

34:26 Actionable advice for investors

[10:49]  At this early stage, where we are in the development of the biodiversity credit market, I’d say it is better to keep carbon and biodiversity apart just to be on the safe side, not to trigger any unwanted consequences such as greenwashing critique.

[15:44]  A transparent market will allow private funding of biodiversity and enable forest owners to engage in more nature conservation and restoration than we would have had if only taxpayers’ money was paying for everything.

Qarlbo Biodiversity: https://www.qarlbonac.com/

Portfolio: https://www.aleksandraholmlund.com/

LinkedIn: https://www.linkedin.com/in/aleksandra-holmlund-5b04101/

 Sound Library:

1. Nature by MaxKoMusic/Soundcloud
2. Sopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary, IRELAND by wild_rumpus/Soundcloud

Sign up now for the ForestLink’s newsletter, where you’ll receive technical advice, reflections, and best-practice guidance to support you with your forest-linked investment strategy or business straight to your inbox.

Hosted on Acast. See acast.com/privacy for more information.

Join me today as I speak with Asger Strange Olesen and Herbert Yancey of the International Woodland Company, Asset Management + for an informative discussion on the EU Taxonomy. In this conversation we dig into the differences between the SFDR and the EU Taxonomy and how investors are looking at these sustainability regulations and tools. Though largely a concern for European investors, we talk about why it matters in forest investments the world over and how IWC AM+ is applying the EU Taxonomy in its approach to sustainable forest investment. We talk about the potentially affronting aspects, such as costs, management burden and how compliance will be monitored by the regulatory authorities, and spoiler alert – it’s not a drag on returns and will support the management of resilient forests.

“If you are not considering climate change with your forest assets, you’re doing a disservice to your investors”

Host: Shauna Matkovich - The Forest Link

Producer: Magdalena Laas - https://www.linkedin.com/in/laasmagdalena/

Details

01:50

Asger gives an overview re. EU taxonomy, SFDR (Sustainable Finance Disclosure Regulation), impact on investments

05:50

Asger give more details about SFDR to avoid large-scale green washing

06:40

Asger explains how the disclosures moves from asset level to financial regulatory authorities

08:15

Looking at forest funds from different perspectives

10:39

Herbert explains American sentiment in investment regulations

13:23

Asger explains how IWC view EU taxonomy in the assets they manage

16:10

Asger explains about the learning curve translating financial regulation into investment strategy

18:30

Asger explains specific metrics (broad & context specific)

20:47

Herbert gives the American perspective – enhance forest resiliency

22:53

Asger adds to Herbert’s point – explains how SDFR works – making your methods transparent and comparable (it’s njot compulsory)

24:50

Asger gives a summary, touches on exploitation of the asset, if not sustainable, investors will move away

26:17

Asger explains the operational cost differences expected in an EU taxonomy aligned asset vs a non-taxonomy aligned asset

28:49

Asger elaborates on how aligning the EU taxonomy with one’s investment strategy build value in asset management (including point of exit opportunities)

31:03

Asger talks about how SFDR and EU taxonomy compliance will be monitored

37:47

Actionable advice to investors from Asger and then Herbert

34.58

IWC contact details

[22:47]            Herbert: If you are not considering climate change with your forest assets, you’re doing a disservice to your investors

LinkedIn: https://www.linkedin.com/company/the-international-woodland-company/

Sound Library:

1. Nature by MaxKoMusic/Soundcloud
2. Sopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary, IRELAND by wild_rumpus/Soundcloud

Sign up now for the ForestLink’s newsletter, where you’ll receive technical advice, reflections, and best-practice guidance to support you with your forest-linked investment strategy or business straight to your inbox.

Hosted on Acast. See acast.com/privacy for more information.

Join me today as I speak with Gabriela Leslie, Senior Manager, Food, Agriculture and Natural Capital at the Creo Syndicate - a membership organization that supports its family office members to better understand the latest developments in climate investing. It creates a platform for private family investors to come together, learn from each other and collaborate on investment opportunities to solve the climate crisis. In this illuminating conversation, we dig deep on how family offices are different than institutional investors and how this shapes why they consider forest investment, how they evaluate opportunities and what is challenging the attractiveness of forest investments currently (but the outlook is positive).

“So, we find that there’s a decision-making process that comes in around, not only is this a good investment and can this scale, but you know, is the impact really meaningful?”

Host: Shauna Matkovich - The Forest Link

Producer: Magdalena Laas - https://www.linkedin.com/in/laasmagdalena/

01:25

An overview of the Creo Syndicate

02:49

The profile of family office investors compared to institutional investors

06:21

Family office capacity to evaluate forest investments

08:29

Change in family office sentiment around investing in nature and why it is attractive

12:25

Sentiments on forests versus other natural climate investment strategies

16:15

The role of carbon markets

16:58

What makes forest investment strategies challenging at the moment

19:35

Exploratory and catalytic capital into forestry

21:47

Need for more transparency in forest investment

23:52

Emerging emphasis on biodiversity

26:18

Family office approach to catalytic finance

31:42

Investment vehicles suitable for family offices

35:55

Actionable advice for forest investment managers to attract more family office capital

37:27

Links (see below)

[04:41] the lack of firepower means there’s a greater premium on capital efficiency and impact.

[05:12] So we find that there’s a decision-making process that comes in around, not only is this a good investment and can this scale, but you know, is the impact really meaningful?

[08:21] Our members come to the nature space with a lot of enthusiasm. I’d say this is a market shift over the last few years. We previously had folks come to us interested in nature but not really ready to engage [...] there’s more literacy around financial markets intersecting with nature now that there ever has been.

[22:23] I think some transparency around that counterfactual piece (Improved Forest Management) would be really important in helping uplift the reputation o the sector as an impact strategy.

[27:52] So catalytic in our mind doesn’t need to be philanthropic. It just needs to be risk on, it needs to be impact first. And we see some really great examples of folks coming in and they’ll either cut the first cheque or they be the last.

Creo Syndicate: https://www.creosyndicate.org/

1. Nature by MaxKoMusic/Soundcloud
2. Sopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary, IRELAND by wild_rumpus/Soundcloud

Sign up now for the ForestLink’s newsletter, where you’ll receive technical advice, reflections, and best-practice guidance to support you with your forest-linked investment strategy or business straight to your inbox.

Hosted on Acast. See acast.com/privacy for more information.

Join me today as I speak with Thorsten Arndt, Head of Advocacy at the Programme for the Endorsement of Forest Certification (PEFC), where we discuss PEFC and how in addition to facilitating sustainable forest management, it can help those with forest products in their supply chains align to various voluntary and mandatory sustainability disclosure requirements. We dig deep into the EU Regulation on Deforestation Free Products, or EUDR, and about how PEFC is thinking about carbon certification. 

Host: Shauna Matkovich - The Forest Link

Details

01:37

Thorsten introduces PEFC

05:08

Sustainability reporting under various voluntary and regulatory standards

10:10

Regulatory sustainability disclosures and the EUDR

14:16

How PEFC can support in meeting the EUDR

20:20

General public interpretations of the EUDR and what this could mean for sustainable forest management

21:31

Carbon certification and PEFC

25:13

How should investors be thinking about forest asset evaluation in light of forest management certification and EUDR

27:01

PEFC and its multistakeholder process

28:07

Actionable piece of advice for new investors

29:05

Contact details

11:15 “Under the scope of this regulation [EUDR] are essentially any kinds of products that enters the European market for several commodities including soy, palm oil, beef, rubber, cocoa, coffee and timber”.

20:20 “What we fear may happen [with the EUDR] is that an unintended consequence is that European consumers do not care about sustainability that much anymore because they will know that the products they buy are deforestation free.”

24:16 “The other option we are exploring is to collaborate and coordinate with existing carbon standards to see PEFC and carbon standards can be implemented in a more coordinated manner to reduce the burden on smallholders and the forest.”

PEFC: https://pefc.org/

1. Nature by MaxKoMusic/Soundcloud
2. Sopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary, IRELAND by wild_rumpus/Soundcloud      

Sign up now for the ForestLink’s newsletter, where you’ll receive technical advice, reflections, and best-practice guidance to support you with your forest-linked investment strategy or business straight to your inbox.

Hosted on Acast. See acast.com/privacy for more information.