The BNP Paribas Future Forest Fund is an innovative investment developed by BNP Paribas Asset Management (BNPP AM) to promote sustainable forestry. The fund, launched in response to increased interest in responsibly managed timberland investments worldwide, generates financial returns while providing significant environmental and social benefits.
The Future Forest Fund falls under Article 9 of the European Union’s Sustainable Finance Disclosure Regulation (SFDR) and, therefore, has an obvious sustainability orientation. The fund seeks to deliver financial returns to investors while simultaneously addressing several environmental issues that have become pressing issues, including climate change, biodiversity loss, and deforestation. These will involve investments in sustainably managed forests, the removing and storing of carbon, the protection of terrestrial biodiversity, as well as providing a climate resilience: This new product is a collaboration between BNP Paribas Asset Management and International Woodland Company, Copenhagen-based firm that specializes in sustainable forest investments, agriculture, and ecosystem restoration. In 2022, BNPP AM acquired a majority stake in IWC, a move that further strengthens its expertise in natural capital and creates synergies for future forest investment opportunities. Through the partnership, IWC will be bringing in deep knowledge in natural resource management and environmental stewardship to ensure that the fund’s investments are profitable and serve both financial objectives and environmental goals.
ESG Lead Specialist for Private Markets at BNPP AM, Maxence Foucault, believes the partnership is imperative to help the company actively participate in the environmental transition. Foucault also underlined the fact that the Future Forest Fund meets an increasing interest from the clients in sustainable investments on the part of BNPP AM and contributes to a greater sustainability strategy through this particular fund. Earlier this year, BNPP AM unveiled its Global Sustainability Strategy, which made public investments expanding into climate and environment-themed assets, including nature-based solutions. Today, the Future Forest Fund is one of the concrete steps toward that strategy.
The fund has raised $130 million at its first close, with a target size of $500 million and a hard cap of $750 million. Target portfolio : The target portfolio will consist of 8 to 12 assets that stretch from the Southern United States, through Northeastern United States and into Pacific Northwest; Australia, New Zealand, as well as Europe. These assets will be mainly of FSC certified or certifiable forests. Such certification ensures sustainability through responsible practices and transparency in the management of the forests. The fund will also provide investors with the information required to track and report on their greenhouse gas accounting and regulatory needs, such as reporting under the EU’s climate and sustainability targets.
As BNPP AM puts it, sustainable investments in forestry offer an opportunity for balancing environmental and financial returns. Megatrends such as population growth, urbanization, rising per capita incomes, and the transition to a green economy will fuel rising global demand for wood products in the future. Investing in sustainable forestry is not only one way of meeting that demand but also reaps other environmental benefits, including the sequestration and storage of carbon in well-managed forests; improved biodiversity; and long-term solutions for climate change and deforestation.
David Vaillant, Global Head of Finance, Strategy, and Participations at BNPP AM and Chairman of IWC, said the Future Forest Fund is a significant step into mainstream sustainable forestry investment. The fund balances financial viability with environmental stewardship so that it achieves good commercial objectives while it has a positive biodiversity and climate resilience impact.
The Future Forest Fund is an expression of BNP Paribas Asset Management’s continued leadership in sustainable investing and the firm’s support of the journey towards a better, more sustainable, and environmentally conscious future. BNPP AM meets the increasing demand for nature-based solutions while fostering a positive environmental impact aligned with the firm’s core values of sustainability and responsible investment through this initiative.