BNP Paribas Asset Management (BNPP AM) has launched a fund that will invest in sustainable forestry to promote responsible investment practices while generating financial returns to investors.
The BNP Paribas Future Forest Fund (FFF) seeks to combat climate change, improve asset resilience, and enhance biodiversity. It is classified as Article 9 under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).
Targeting a size of US$500 million (US$750 million hard cap), the FFF has already secured US$130 million in its first closing.
The fund will invest in Forest Stewardship Council-certified or -certifiable timberlands across the United States (South, Northeast, and Pacific Northwest), Australia, New Zealand, and Europe and will consist of eight to 12 assets.
These assets are expected to generate stable, inflation-hedged income, support biodiversity, address deforestation, and advance climate mitigation by removing carbon dioxide from the atmosphere.
"At BNP Paribas Asset Management, we are committed to pioneering investment solutions that address the challenges of climate change and biodiversity loss. The BNP Paribas Future Forest Fund is a prime example of how investors can align environmental benefits with financial targets,” says Maxence Foucault, senior ESG specialist, private markets, at BNPP AM.
Growing asset class
Rising global timber demand, driven by factors such as population growth and urbanization, underscores the fund’s relevance, the firm says.
The global forestry asset management sector has seen substantial growth, with the forestry and logging market projected to surpass US$1 trillion in 2024. This expansion is driven by increasing demand for sustainable timber and carbon sequestration solutions.
In Asia, forestry funds are emerging as vital mechanisms to address deforestation, promote sustainable land management, and generate carbon credits.
Companies like Sydney-based New Forests illustrate this trend, managing over 1.2 million hectares of sustainable timber plantations and conservation areas across Asia and other regions.
Initiatives such as the Restorasi Ekosistem Riau (RER) in Indonesia also exemplify large-scale private sector engagement, restoring over 150,000 hectares of peatland and conserving biodiversity with support from the Indonesian pulp and paper giant the April Group.
