Manulife Investment Management is buying 89,800 acres of timberland in the US in a deal expected to help the asset manager integrate natural climate solutions into its investment decisions and work towards its climate action plan.
The acquired property is a contiguous block of timberlands located in Somerset County, Maine along the border of the province of Quebec, Canada with a diverse mix of naturally regenerated spruce-fir and northern hardwood tree species.
The investment is being done through Hancock Natural Resource Group, a subsidiary, on behalf of John Hancock Life Insurance Company USA and parent company Manulife, the insurer.
Financial details were undisclosed.
The asset manager said the investment is “classified as impact-first with the core of the investment thesis centred on the timberlands being used primarily to store carbon”.
”Manulife reserves the option to sell the carbon credits as offsets or use the carbon removals as ‘insets’ for the purpose of meeting the firm’s net zero commitments,” the manager said.
The investment manager recently outlined its carbon reduction plan for its US$18.2bn (€15.3bn) property portfolio. The asset manager said in its 2021 Real Estate Sustainability report it had set a greenhouse gas reduction target of 80% for the portfolio by 2050.
Tom Sarno, global head of timberland investments at Manulife Investment Management, said: “We are well-positioned to seek positive climate impact and to invest in assets to create carbon sequestration and other conservation opportunities derived from forests for the benefit of our clients.
“We believe impact-first investments can meet the needs of those who are interested in offsetting carbon emissions and who may value other positive environmental or social impacts as well as generating financial returns.”
Sarah Chapman, global chief sustainability officer at Manulife, said: “We are pleased to have the opportunity to acquire a significant impact-first asset which continues the execution of our climate action plan we shared in May when we committed to accelerate the development of investment strategies for those interested in natural climate solutions that capture even more carbon per dollar invested.
“We’re proud to share that Manulife is net-zero in our operations, due to the carbon removals from our substantial owned and operated forests and farmland outweighing emissions. We are confident this asset will continue to meet the objectives of carbon sequestration and positive climate impact for our portfolio.”
Brian Kernohan, chief sustainability officer, private markets at Manulife Investment Management, said: “The amount of carbon a forest can store is directly proportional to the volume of timber in that forest.
“Advanced light detection and ranging technology for timber volumes in our forests now allow us to measure forest carbon sequestration with improved accuracy - providing investors with even more quantifiable data for carbon storage. We are committed to the proactive management and stewardship of these timberlands to meet both return and sustainability objectives for clients.”
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