The Essex Pension Fund has made a £100m anchor commitment to the Stafford Carbon Offset Opportunity Fund.

Managed by Stafford Capital Partners, the fund is a new Article 9 impact fund that will develop new commercial timberland plantations and restore natural forests on a global basis.

It will seek to deliver a return from commercial forestry to investors as well as a supply of carbon credits verified by recognised international carbon standards, with a USD 1bn fundraising target.

The fund is expected to invest in around 200,000 hectares of sustainably managed timberland globally, including around 150,000 hectares on which new commercially managed plantations will be established and natural forest planted.

In addition to this, it is expected to generate around 30 million verified carbon offsets for investors, each equivalent to 1 tonne of C02, and help to provide a source of sustainable, low-carbon timberland materials.

The investment the fund is therefore expected to contribute a "significantly" negative carbon intensity metric to Essex Pension Fund’s investment portfolio.

Essex Pension Fund has been a long-standing investor in the timberland sector, with Strategy Board and Investment Committee (ISC) chairman, Susan Barker, pointing out that it was one of the first LGPS fund’s to invest in the timberland sector in 2011.

"Over the last few years’, significant improvement in our funding position has allowed us to take the opportunity to implement our medium-term de-risking programme which has resulted in the fund’s strategic allocation to this asset class increasing from 2 per cent to 4 per cent," she continued.

"The agreement of my fellow ISC members to invest in this fund reinforces our commitment to being responsible investors and the general direction the fund is taking in regard to our aspirations to have c10 per cent of the fund invested in impactful investment solutions that delivers both positive environmental and social benefits that would not otherwise happen, which not only aligns with our Responsible Investment Policy and priorities, but our commitment to achieving net-zero targets in the future”.

Stafford Timberland co-managing partner, Stephen Addicott, added: “We are very grateful to the Essex Pension Fund for its support of the timberland asset class over many years.

"We welcome them into our new carbon offset opportunity fund, a strategy which we feel can make a meaningful contribution to the environment and society.”

Share Story: