Today, I’m joined by Craig MacKenzie, Senior Lecturer in Nature Finance at the University of Edinburgh Business School. Over Craig’s career, he has worked in asset management and transitioned to academia. He also advises several public bodies on land use change. From this vantage point, Craig shares his insights on the opportunities and challenges for scaling UK Carbon Forestry, where a significant roadblock is attracting institutional investors. We talk about the massive reduction in forest cover that has taken place in the UK over the centuries, and how the UK’s commitment to net zero is starting to reverse this trend. Despite the primarily well-received Woodland Carbon Code (WCC) and other favourable policies, the economics still don’t stack up to meet investors’ return requirements when compared to the risks associated with carbon credit price volatility and the long horizons for generating credits in the UK. But things are changing. Tune in to find out what’s in the pipeline for the sector that may make UK carbon forestry much more attractive to institutional investors, and support turning the UK’s net-zero ambitions into reality.
The biggest challenge for investors in the UK, in particular, is finding the bandwidth to do the due diligence on the UK kind of situation. So, the actionable advice is, can we find ways to pool the research question so that it isn't every single pension fund having to repeat the same amount of work, the same body of work?
Can we create a data room for UK carbon forestry for our big pension funds, so that we can make it easy for the due diligence to happen?
I'm quite excited about the potential for UK carbon forestry to move from being uninvestable to being attractive. But it would be tragic if we do that, but then nobody turns up because they just haven't been able to do the work.
Royal Society for the Protection of Birds (RSPB)
University of Edinburgh Business School
01:26
Craig’s background
03:13
What encompasses UK carbon forestry
06:38
Woodland carbon code
07:43
UK forest cover
10:57
Opportunities to diversify/overlap land use (mostly segregated)
14:33
Invest in UK carbon forestry
18:34
Benefits/subsidies
21:01
Capital providers
26:08
Changes needed to attract more institutional private funding/investment
32:51
Carbon credits insurance products
34:23
Woodland Code UK – insurance
35:56
Biodiversity net gain legislation
41:17
Actionable advise
42:57
Contact details
Nature by MaxKoMusic/Soundcloud
Sopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary, IRELAND by wild_rumpus/Soundcloud
Sign up now for the ForestLink’s newsletter, where you’ll receive technical advice, reflections, and best-practice guidance to support you with your forest-linked investment strategy or business straight to your inbox.
Hosted on Acast. See acast.com/privacy for more information.
