30 June 2020
New Forests’ inaugural Climate Disclosure Report 2020 (CDR) is believed to be the first time that the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) have been applied to the forestry asset class.
The report outlines New Forests’ Climate Action Plan – a three-year strategy for investor engagement, improving the quality of climate portfolio metrics in forestry, and demonstrating the ability of forestry investments to utilise science-based targets and contribute to both climate neutrality and the net carbon removals needed to deliver on the global climate agenda.
It addresses governance, strategy, risk management, metrics, and targets – as recommended by the TCFD.
The report includes New Forests’ analysis of physical and transition risks to its business, building on the work of the World Business Council for Sustainable Development’s (WBCSD) TCFD Preparer Forums.
Although forestry investment is a relatively small asset class, with around $110-120 billion currently invested, it and other types of ‘land use’ activities are critical to help meet climate objectives. The bioeconomy as a whole is estimated as a $7.7 trillion opportunity.
New Forests notes that forestry investment strategies can deliver a significant portion of the more than 30% of global mitigation efforts possible via Natural Climate Solutions, but has largely been overlooked by investor efforts around TCFD.
“While we are proud to ‘walk the talk’ by formally pursuing climate neutrality as a business, the true impact of our Climate Action Plan lies in collaborative engagement on forestry solutions and our ambition to demonstrate investable pathways to flip forestry and land use from being around a quarter of the global greenhouse gas emissions problem to generating a third of the solution,” explained Mary Kate Bullen, director of sustainability and communications for New Forests.
Explaining why it used the TCFD as a framework for its reporting, CEO David Brand said: “First, as stewards of real assets we believe we have a duty to our clients to manage and disclose the climate-related risks of their investments. Second, although forests face real and rising physical risks from climate change, we also see opportunities arising from climate finance and the need to invest in climate mitigation, adaptation, and resilience. TCFD gives us a comprehensive framework to consider how we can be resilient in a changing world.
“We also want our climate efforts to be part of a broader movement that accelerates investment into Natural Climate Solutions and the circular bioeconomy.” EF