February 1, 2024

By Lynda Kiernan-Stone, Global AgInvesting Media

The Scottish Borders Council Pension Fund has partnered with Nuveen to make its first natural capital investment by backing Nuveen’s flagship Global Timberland strategy, while noting the potential for future allocations across Nuveen’s Natural Capital platform in both forestry and farmland. 

“The Pension Fund’s core objective is to provide our end investors with stable returns and we are increasingly putting their capital to work to drive positive environmental and social outcomes,” said Councillor David Parker, chair, Scottish Borders Council Pension Fund. 

In February 2022, Nuveen announced the formation of Nuveen Natural Capital as part of a wider reorganization to enhance its Real Assets platform by creating a more streamlined channel for investors looking for natural resources investments. 

Only a matter of months later came the launch of the Nuveen Global Timberland strategy – developed to give investors targeted exposure to sustainable timberland investment opportunities in core geographies including the U.S., Chile, Uruguay, Canada, New Zealand, and Australia. 

There is a broadly embraced goal among global investors to see their portfolios shift to net zero by 2050, and natural climate solutions are the lowest-cost scalable channel through which to achieve this, according to the World Resources Institute. Such is the case for The Scottish Border Council, which stated that this investment represents its increased drive toward the decarbonization of its portfolio by deploying capital in ways that target positive environmental and societal outcomes as well as resilient returns. 

With this goal in mind, Nuveen is a good place to land. As a leader in natural capital with a heritage dating back to 1986, Nuveen currently has AUM of $12.4 billion across the asset class, including over $2.1 billion of timberland assets consisting of more than 873,000 acres of global forests, ranking as one of the top ten such managers worldwide. 

“Natural capital solutions continue to be of interest amongst LGPS investors as they seek to decarbonise their portfolios and solutions to achieving Net Zero targets,” said Matthew Hamber, UK institutional business development, Nuveen.

“Our partnership with Scottish Borders is a major milestone for our Global Timberland strategy and is further indication that UK institutional investors see the full range of benefits of allocating to natural capital as an asset class.”

Managed by head of timberland Chris Lipton and supported by a senior management team active across regional portfolio management, research, and sustainability, the Nuveen Global Timberland strategy seeks consistent, long-term, risk-adjusted returns and regular income yields through a portfolio of high-quality timberland assets that are highly regionally diversified with locally sourced opportunities managed by its global network and team. 

The strategy further targets a consistent yield with the intention to seed mature, income generative assets. With sustainability at the heart of its philosophy, the nature of the strategy provides the flexibility for investors to adjust allocations as appropriate and provides them with standardized carbon reporting. 

“The Nuveen Global Timberland strategy and its investment philosophy is fully aligned with these ambitions and will help us in our journey towards a more sustainable portfolio,” said Councillor Parker. “Moreover, the depth of Nuveen’s overall investment platform, the strategy’s global scope and income profile were key factors in forming the partnership.”

“We look forward to deepening our partnership with the Scottish Borders Council Pension Fund,” said Hamber, “and working as a solutions provider to meet both its investment and climate-based targets.”

~ 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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