May 16, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Foresight Sustainable Forestry Company (FSF) explained that it is working to make direct contributions to combating climate change through forestry and afforestation carbon sequestration initiatives. Through the management of its diversified portfolio of UK forestry and afforestation assets, the group strives to preserve and enhance natural capital and biodiversity, while targeting a net total return exceeding CPI (consumer price index) +5 percent. 

For its investors, the company stated that it offers outstanding ESG and sustainability, along with access to carbon units from sequestration from new afforestation planting, generating real returns and capital appreciation driven by the global imbalance in supply and demand for timber, the inflation hedging capacity of UK land freeholds, and biological tree growth of between 3 and 4 percent, not correlated to financial markets. 

During the month of March 2023, FSF deployed £9.9 million (US$12.36 million), funded from cash on its balance sheet, to acquire three properties in Scotland:

Newnoth Farm: Directly adjacent to Newnoth Forest, an existing mature forestry property within the portfolio, this asset carries strong afforestation potential and together with Newnoth Forest represents a combined area of approximately 234 hectares (578 acres). 

Balnagowan: Bordering Foresight’s existing asset Coull Woodlands, Balnagowan is a nature forest that creates an aggregate property area of about 461 hectares (1,139 acres) when combined. 

High Auldgirth: At 288 hectares (712 acres), High Auldgirth is sizable on its own with existing forestry on about 60 percent of the land, with the remaining area having excellent afforestation potential. 

These three acquisitions now bring FSF’s total portfolio acreage to 11,743 hectares (29,017 acres) across 65 properties. Of this total:

– 3,430 hectares (8,476 acres) – Development stage afforestation assets, or land prior to planting permission and grant application. 

– 426 hectares (1,053 acres) – Planting stage afforestation assets, or land that has planting permission and grant application completed, but initial planting of trees is not yet completed. 

– 264 hectares (652 acres) – Establishment stage afforestation assets, or land on which initial planting on site is completed, but trees are still establishing and stabilizing (usually a three- to five-year period)

– 5,772 hectares (14,263 acres) – Established forest assets, or land where trees are stabilized and established. 

– 1,851 hectares (4,574 acres) – Other land.

“We are delighted to have added three new properties to the portfolio and to be nearing completion of planting on four of our afforestation sites,” said Robert Guest, co-head of Foresight Sustainable Forestry Company. “This adds to our track record of securing attractive acquisition opportunities for FSF and demonstrates our continued ability to deliver progress on the afforestation development pipeline. Reaching the Establishment Stage is a major milestone for Afforestation Assets, as by this point planning permission and grant funding are secured and the Planting Stage has been completed which means the asset is materially de-risked and therefore more valuable.”

Additionally, the company stated that after securing certain accreditations across its portfolio, it has achieved an IPO target of having all of its eligible commercial forestry projects secure dual Forest Stewardship Council (“FSC”) and Programme for the Endorsement of Forest Certification (“PEFC”) within 12 months of acquisition or completion of planting. 

“In our IPO objectives, and as part of our proprietary silvicultural management approach, we outlined that FSF would seek to secure and continuously maintain dual FSC and PEFC certification on all FSF forests within 12 months of acquisition, to significantly raise the industry bar on truly sustainable forest management practices,” said Richard Kelly, co-head of Foresight Sustainable Forestry Company. 

“This achievement represents the delivery of another significant Company milestone. The certifications attest to the priority we place on sustainable forest management and FSF’s role as a responsible custodian of local ecosystems and the wider sustainable timber industry.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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