Forest Invest

In this episode, I am joined by James Kench, Head of Insurance at Kita. In our conversation James discusses the role of insurance as an enabler to mobilize capital into natural climate solutions in forestry. He describes how their product has been structured to address the most significant risks observed in forest carbon projects, giving some insights into what those risks are. He explains that given its ‘newness’ in the insurance market and the period in a forest carbon project’s life when it is most likely to experience a claim event, that no claims have yet to be made. He gives some great advice to investors looking to participate in forest carbon markets, on what risks they should consider.  Details 00:37 Intro to James Kench & Kita 03:30 James explains about the different types of nature-based solutions 04:39 Typical client profile explained – corporates and investors 07:27 Insure every asset in the portfolio or asset by asset? 09:18 Portfolio vs individual – underwrite specific transaction 10:28 What happens if a project fails – dimensions of risk 15:09 Delivery risk & concept and execution phase until credits are issued 17:54 How Kita underwrites and how it affects pricing 20:55 Moral hazards 23:54 Characteristics that makes assets uninsurable 26:09 Process of raising capital for offering insurance 29:03 Future of carbon markets 32:17 Examples of actual claims 37:06 Contact details Significant quotes:[07:37]            The main pain point we wanted to solve is that there's reasonably good supply of carbon credits out there, but they're not necessarily a good supply of high-quality credits, and the best way to secure high quality credits is to lock in investment at an early stage of the project.[08:32]            If the project has failed or has not performed as much as hoped, then our insurance would kick in, and then we would be able to make the investor or the corporate whole, either in cash or in like for like carbon credits.[14:10]            But where we see investors coming in to lock in that supplier of the most high quality projects, they're very actively trying to source and originate projects all over the world and get in as early as possible because that enables them to secure that supply and secure a good price and then have hopefully a bit more influence and control over the sort of management and success of the project over the longer term.Links mentioned:Kita: https://www.kita.earth/LinkedIn: https://www.linkedin.com/company/kitaearth/Sound Library:Nature by MaxKoMusic/SoundcloudSopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary, IRELAND by wild_rumpus/Soundcloud

Today I’m joined by Steve Novakovic, Managing Director for the Chartered Alternative Investment Analyst Association (CAIA) Curriculum. CAIA serves its international membership across the finance industry enhancing education in relation to alternative investments. From Steve’s wide knowledge of alternative investments, he describes how timberland investment plays a very important role in building a balanced institutional investment portfolio that both serves fiduciary requirements and has strong sustainability features.Show notes:Host: Shauna Matkovich - The Forest Link Timecode Details 00:33 Intro to Steve Novakovic 02:02 Intro to CAIA 02:55 CAIA’s curriculum (limited partners, alternative investments) 05:19 Member organisations 06:12 Investors sentiments around natural capital investment, specifically forestry 09:40 Deliberate decision-making process and how long it takes 11:22 Geographical location of most experience within the asset class 15:09 Sustainability and impact requirements of European investors 17:32 Demand for education in the asset class 22:37 Educational approach about timber investing (TIMO) 24:55 Shift to sustainable investments 26:21 ESG investing 30:15 Expansion of CAIA’s offerings to its members (e.g., understanding value chain) 34:40 Teaching members about sustainability (UN principles of sustainable investments) 38:12 Actionable advice 40:50 Contact details (see below) Significant quotes:[03:02]            For better or for worse, limited partners is kind of what makes the industry run.     [09:40]            The decision-making process is deliberate, really intentionally. As a limited partner you are the steward of capital, you have fiduciary responsibilities for whomever it is you are managing the pool of capital for, and you have to be very cautious and mindful in your investment approach.[19:22]            Timberland is a very low risk investment.[26:18]            From an academic perspective, there is clear evidence that ESG focused are beneficial in that they reduce risk. [28:07]            As a fiduciary, you really are supposed to evaluate investments in the context of risk and return, irrespective of your perspective on the environment or social or governance or so forth.Links mentioned:CAIA Association: https://caia.org/Steven Novakovic: https://caia.org/contact/steven-novakovic-caia-cfaSteven’s LinkedIn: https://www.linkedin.com/in/steven-novakovic-caia/Sound Library:Nature by MaxKoMusic/SoundcloudSopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary, IRELAND by wild_rumpus/Soundcloud

In this Canada Day episode, I am joined by Dr. Gary Bull, Professor at the University of British Columbia Faculty of Forestry. In our conversation Gary discusses the fundamentals of fire ecology in the context of Canada’s forests, and how it has changed in recent years. He describes the grand transition – both a paradigm shift in forest management practices in British Columbia and indigenous land reformation. From his deep experience in working with multiple stakeholders in the forest sector, he talks about opportunities and solutions for more resilient forests – that include indigenous and community stewardship, growing markets for ecosystem services and bioenergy and private investment. Show notes:Host: Shauna Matkovich - The Forest Link Details 00:51 Introduction to Gary Bull and his work 04:01 Summary of the wildfire situation in Canada and BC 07:58 Cause of wildfires in BC and Canada 14:20 Community perceptions on fire-smart forest management 15:19 Bioenergy as a solution 16:35 Resources for wildfire management 18:32 Private capital needed for the “Grand restoration” 21:10 Indigenous rights and forest stewardship 23:52 Production of new markets for wood 26:49 Canada and the Paris Agreement 30:59 Advice for investors, considering investing into forests Significant quotes:[03:22]            Last year, we would see that the wildfires produced three times more emissions than all industrial sources of emissions in Canada. [12:26]            I think now, the recognition is that especially in these landscapes, the boreal landscapes, and parts of the temperate that we will have to use fire as a management tool. [14:02 ]           We're going to move into an era of active forest management, not just for producing timber from mills, but for active, for producing, preserving ecosystem health.[18:32]            I don't think governments will ever be able to find all the money required to do the kind of restoration we want and the kind of things that I'm seeing happening, for example, in Brazil, right now, where investors are coming in offering up private investment capital to help with what I would call the Grand restoration challenge. [26:31]            And I think first nations are in a great position to lead the conversation, and essentially bring these other stakeholders to the table and say, look, we want jobs too, we want investment too, we want ecosystem health and we think we know how to get there.[29:16]            And so what this [fire suppression] has led to in Alberta (and people will find this perhaps puzzling to understand) is too much old forests. And so, these old forests are now highly vulnerable to fire. Links mentioned:UBC Faculty of Forestry: https://forestry.ubc.ca/Sound Library:Nature by MaxKoMusic/SoundcloudSopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary, IRELAND by wild_rumpus/Soundcloud                  

In today’s episode, I am joined by Dr. Stephanie Gripne, Founder and CEO of the Impact Finance Center and Impact Investing Institute. In our conversation Stephanie identifies some primary challenges with raising capital for forests – that is the need to first, raise investors and second – think about what the forest needs. She describes the need for full spectrum capital to address the needs of the forest value chain, and will have you reconsider your thoughts on impact investing – from philanthropic giving to commercial return seeking investors.Host: Shauna Matkovich - The Forest Link Details 00:38Introduction to Stephanie Gripne and her organisation, Impact Finance Center06:26Sustainable Forestry Investment Club and how it came to be11:42Four parts of the sustainable forestry investment club – identify and educate investors13:04Second part – connect capital stewards with community stewards that need the money13:35Third part – governmental spending/grants for start ups14:23Part four – mainstream 2.0 – retirement programme (invest in forests?)16:45Investor profile & education modules via Forestry Investment Club17:53Point of difference in how organisation teaches investing22:00Explanation of investments with negative 100% loss/return24:28Examples of impact investment transactions29:42Reverse engineering in an investment strategy30:22Early stages of nature-based investment34:12Where do you learn about all the regulations – Green Biz Group – series of conferences36:12Mainstream 2.0 & future projects & plans37:40Actionable advice to investorsSignificant quotes:[03:36]            You can think of the Impact Finance Center as an investor accelerator, where we grow investors like we grow trees.[12:50]            There is a really big need globally for us to create investor accelerators, the same way we have the accelerators for entrepreneurs.[18:17]            The only way to solve this problem is to shift the question from what does the investor want to what does the forest need.[26:34]            The only way you can heal a river, whether it is a physical river or a river of capital, which is our mainstream and Wallstreet capital is to restore the flow. That is holistically looking at the capital.[32:22]            We got to get more money to the forests, to the communities in a way that is needed.[38:03]            You shift power to the forest and the communities, you learn about full spectrum capital, and then you restore the flow of the capitalLinks mentioned:Impact Finance Center: https://impactfinancecenter.org/Green Biz Group: https://www.greenbiz.com/Sound Library:Nature by MaxKoMusic/SoundcloudSopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary, IRELAND by wild_rumpus/Soundcloud

In today’s episode, I am joined by Chris Lipton, Head of Timberland Investments and Cristina Hastings, Head of Sustainability at Nuveen Natural Capital. Listen to our conversation, where Chris explains how timberland investment has changed in recent years and Cristina presents the natural capital balance sheet, which supports Nuveen Natural Capital in valuing nature.“We are not trying to attach a price to nature, we are trying to recognize the value of it, particularly those ecosystems services which are often silent and invisible.”Show notes:Host: Shauna Matkovich - The Forest Link Details 01:22 Overview of Nuveen & TIAA 01:59 Responsible investment 02:52 Natural capital 04:42 Changes in timberland investments 06:11 Locations of investment properties 06:42 Timberland investment strategy 06:55 Diversification of timberland portfolio 07:58 Carbon credit certification 10:10 Nuveen’s natural capital balance sheet 12:52 Lessons from Natural Capital Balance Sheet Pilot 14:49 Data management - databases 16:18 Take away from pilot and natural balance sheet 17:04 Evolving applications 19:02 Methodology of natural balance sheet – four main steps 21:15 Examples of monetary values 22:10 Advice to investors 25:10 Forecast carbon profile 28:30 Info on website & resources Significant quotes:[04:04]             “Growing trees is currently the most efficient and only scalable technology for GHG sequestration and carbon storage that we have.”[12:03]             “We are not trying to attach a price to nature, we are trying to recognize the value of it, particularly those ecosystems services which are often silent and invisible.”[15:16]             “The holistic view of the asset will help showcase the resilience that this careful stewardship has built.” Links mentioned:Nuveen Natural Capital: https://www.nuveen.com/global/about-us/our-people/investment-specialists/natural-capitalSound Library:Nature by MaxKoMusic/SoundcloudSopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary,           IRELAND by wild_rumpus/Soundcloud     

Today I’m joined by Maria Filmanovic, Co-founder of Abatable. Abatable has developed a platform that enables corporates to access carbon credits from vetted forest carbon projects (among other types of nature-based solutions) and the project developer ecosystem. Listen to our conversation, where Maria explains the various players in forest carbon markets. From Abatable’s extensive market intel, Maria describes what types of forest carbon projects are generating the most demand and provides some thoughts on pricing and risks.“With the new definition of quality comes potentially more conservative carbon credit estimation […], and for the same implementation costs of these activities, less carbon credits. This means the prices will need to increase for the market at the same time.”Show notes:Host: Shauna Matkovich - The Forest Link Details 01:53 Introduction to Abatable 03:37 Explanation how the ecosystem of players work 05:53 Mentions newsletter Carbon Compass (sectors covered by the voluntary carbon market) 06:16 Demand for carbon credits vs other types of credits 06:43 Explanation of a green fields project (forestation/reforestation) 09:38 Explanation about carbon removals 10:24 Demand for reforestation 11:30 Preference for removal versus avoidance 12:26 Availability of carbon credits deriving from forest projects stack up ot the demand 14:42 Supply and demand issues 17:04 Corporates are forced to look into their ecosystem impact of the supply chain. 19:16 Controversy in the voluntary carbon market 24:52 Explanation of risks and Article 6 of the Paris Agreement 29:06 Actionable advice for investors Significant quotes:[08:11]            “ I think that the market has evolved from myopically looking at carbon and to understanding that through these project activities you can have ecosystem impact that’s been just beyond the carbon sequestration programme.”[22:45]            “With the new definition of quality comes potentially more conservative carbon credit estimation that will need to occur, and for the same implementation costs of these activities, less carbon credits. This means the prices will need to increase for the market at the same time.”Links mentioned:Abatable: https://abatable.com/Carbon Compass Newsletter: https://abatable.com/subscribe-to-newsletter/Sound Library:Nature by MaxKoMusic/SoundcloudSopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary, IRELAND by wild_rumpus/Soundcloud