Climate Asset Makes First US Forestry Investment

In a move to scale nature-based investments in North America, Climate Asset Management has made its first U.S. forestry investment by acquiring 68,000 acres of timberland on Washington State's Olympic Peninsula. The fourth-quarter 2024 deal was executed through its Natural Capital Fund I (NCF I) and was done in partnership with a group of mission-aligned co-investors brought together by sustainable forestry company EFM (Ecotrust Forest Management).

This acquisition is a strategic milestone for Climate Asset Management as it broadens its portfolio of natural capital investments. The Olympic Peninsula property, previously operated by timberland REIT Rayonier Inc., will be operated under climate-savvy forestry management practices with the intent to provide both environmental and commercial benefits. The project is expected to generate over one million tonnes of additional carbon removals over the next decade through an Improved Forest Management (IFM) approach. This model not only enhances the health of the forest and its timber stock but also aims to foster biodiversity, recreational opportunities, and partnerships with tribal communities.

Speaking on the investment, Ben O'Donnell, Chief Investment Officer at Climate Asset Management, highlighted the double-purpose strategy of the Natural Capital Fund. "We are pleased to have made our first U.S. forestry investment, an asset consistent with our Natural Capital Fund strategy of seeking value from both commodity income and ecosystem services," he noted. O'Donnell brought to light that the Olympic Rainforest asset is a prime example of the kind of asset that provides returns from both commercial activity and environmental stewardship, assisting institutional investors in realigning their portfolios to Net Zero and Nature Positive outcomes.

EFM, the project's land management partner, was the lead in the transaction's implementation. The company not only negotiated the asset purchase but also brought together the investor syndicate and drafted the agreement of sale for carbon. EFM, with its extensive knowledge in sustainable forestry, is now charged with the task of applying the climate-smart forestry methods that will dictate the future utilization of the land.

Carl Atkin-House, Natural Capital Strategy Lead at Climate Asset Management, highlighted the wider strategic implications of the deal. "This is an important milestone in the deployment of capital from our first vintage: it is our first genuine asset investment in North America and sits well with our existing investments in regenerative agriculture and sustainable forestry in Europe, Australia, and New Zealand," he said. He also highlighted the significance of integrating with local constituents in ensuring that measurable impacts reach across biodiversity, climate resilience, water conservation, and community interaction.

The investment is underpinned by a long-term carbon contract, providing a robust financial framework to support the planned ecological enhancements. The IFM approach aims not only to sequester carbon at scale but also to boost timber productivity and forest resilience, delivering a well-rounded asset that aligns with both financial and sustainability mandates.

This groundbreaking investment is an indicator of institutional investors' expanding appetite for asset classes capable of providing stable financial returns alongside catalyzing beneficial environmental outcomes. As the worldwide climate emergency continues to intensify and regulatory demands grow, investment products such as the Natural Capital Fund I are being viewed increasingly as a vital tool in facilitating the transition towards more robust, low-carbon economies.

The Olympic Peninsula forest project is remarkable not only in size but also in ambition. By combining market solutions with environmental stewardship, it is a model for the next generation of sustainable investing, where profitability and planet-positive returns are no longer mutually exclusive, but rather, mutually reinforcing.

With this aggressive step, Climate Asset Management is not just growing its geographic reach but also strengthening its leadership position in the space of climate-aligned natural asset investments. As the fund continues to invest capital in various ecosystems, its dedication to merging financial and environmental performance is bound to encourage more institutional investors to do the same.