Climate change is a major consideration for the strategic asset allocation decisions of some of the world’s largest investors, with a growing number committing to net zero emissions across their investment portfolio by mid-century.
Investors need to understand how to value and manage the climate benefits of NCS as an asset, including both the protection of at-risk carbon stocks as well as an increase in “emission removals” through carbon sequestration.
Understanding how to value and manage climate benefits of NCS — particularly through standardised GHG accounting and participation in government-regulated and voluntary carbon markets — is rapidly becoming a core aspect of investment strategy and portfolio decarbonisation decisions with respect to allocations in forestry, agriculture and land use.
Achieving portfolio decarbonisation while maximising returns and climate change mitigation benefits from forestry and land assets requires understanding of GHG accounting, carbon credit project development, and how carbon pricing is transforming the forestry and agriculture sectors.
Investors’ views on these questions are shaping new investment models in forestry and land use.
It is an important time for investors to take notice of critical developments in the policy and market environment as they seek ways to grow allocation into NCS as part of portfolio decarbonisation and climate-aligned investing.
As they seek to invest in climate solutions, investors increasingly recognise that the only credible pathway to net zero greenhouse gas — the protection of threatened forests, improved management of forestry and agricultural production systems, and reforestation of landscapes.