PPF increases investment in forestry to £1bn

The Pension Protection Fund (PPF) has increased its investments in forestry by 20 per cent to £1bn over the past year.

Forestry is part of the PPF’s responsible investment strategy, and the lifeboat said its £1bn investment was “just one part” of commitment to making a difference while protecting the benefits of those who rely on the funds.

The PPF invests in global soft and hardwood forestry assets, including in Australia, New Zealand, the US, the UK, the Baltics and the Nordics.

Outside of its sustainable investments through pooled funds, it now invests around 30 per cent of its forestry allocation through five direct and co-investments.

This includes a recent direct investment in the New Zealand plantation, Wenita, the largest producer of timber in Otago with 30,000 hectares of sustainably managed forests.

The PPF noted that it only invests alongside asset managers who have fully demonstrated their responsible practices around acquiring and managing forestry, and that all funds and fund managers were subject to a “rigorous investment due diligence process”, including their ESG credentials before engagement.

“It’s fantastic to be continuing to grow our investments in forestry,” PPF portfolio manager, Lea Dubourg-Hrachovec, who leads on the fund’s timberland, farmland and infrastructure investments, commented.

“A well-constructed portfolio gives future optionality for us to play a bigger role in reducing carbon emissions and fighting climate change while delivering strong returns for our members and making our portfolio greener.

“The emergence of carbon credit trading backed by real assets, like forests, will see more investments being made into afforestation, encouraged by the government.”

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