BTG Pactual looks to existing assets for climate and capital gains

BTG Pactual hopes its partnership with The Nature Conservancy will put the two firms in a position to extract additional environmental value from existing assets, while potentially delivering enhanced returns.

The pair announced an agreement in mid-September to sustainably manage 530,000 acres of US forests owned by BTG subsidiary Timberland Investment Group, to “address the twin crises of biodiversity loss and climate change,” a joint statement said.

TNC will serve as a conservation adviser as the duo seek to develop targets around areas such as forest carbon stock, enhancement of biodiversity, habitat connectivity and other criteria specific to each asset.

“TIG expects to maintain or enhance financial performance as a result of the initiative,” Timberland Investment Group chief sustainability officer Mark Wishnie told Agri Investor.

Wishnie added that multiple tailwinds support climate- and nature-positive investment. He cited data from Net Zero Managers that estimates $43 trillion in investment portfolios have been committed to net-neutrality by 2050, and the US Congress’s decision to permanently and fully fund the $900 million per annum Land Water Conservation Fund.

“Voluntary and compliance carbon markets continue to grow, and may provide revenue for high-quality carbon offset projects within the context of broader corporate decarbonization strategies,” said Wishnie.

“Further, the carbon benefits of sustainably managed forests and long-lived, climate-positive forest products may soon be recognized in corporate carbon accounting systems. We believe there may be other asset-specific opportunities to generate revenue from enhanced recreation opportunities, wetland mitigation and other sources.”

The assets to be used for the project are spread across 11 US states and have a combined value of more than $850 million. Wishnie said they were selected because they have “a number of characteristics that make them suitable for this strategy,” but did not provide further detail.

“We will develop a comprehensive vision for the conservation and management of each asset, and utilizing the tailwinds and opportunities described above, seek to enhance the conservation and climate outcomes of each asset while supporting risk-adjusted returns,” Wishnie added.

BTG Pactual has $72 billion in assets under management. Timberland Investment Group owns $4 billion in global timberland assets.