The bank’s investment will support the large-scale creation and management of forests in Scotland, as well as increasing biodiversity in the region, improving air quality, reducing forest erosion. soil and capture around 1.2 million tonnes of CO2 over two decades.
The Scottish National Investment Bank is an impact investor, focused on generating both business returns and mission impacts with its capital. It is also an investor in the alternative asset management group, dedicated to sustainable investments, Gresham House Forest Growth & Sustainability Fund – which supports the management of 140,000 hectares of forest.
Eilidh Mactaggart, CEO of the Scottish National Investment Bank, said: “The bank’s core investment is designed to encourage other investors to follow us into this new type of forest fund. We believe that this opportunity fits perfectly with the bank‘s ambition to lead the way in terms of innovative investments aligned with its mission.
In order to generate income, the Scottish National Investment Bank will sell timber from the forest. All harvested trees will be replanted and the product generated will help provide 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 (WCUs) – a ton of CO2 that has been sequestered in a WCC verified forest – that can be used to offset carbon emissions on on a voluntary basis. “This flexible strategy allows investors to choose whether to use the carbon credits generated for offsetting or to sell the units to generate income,” said Olly Hughes, Managing Director, Forestry, Gresham House.
The new plantation element and the ability to generate carbon credits is a new investment proposition that traditional investors have not yet fully embraced.