Gaining Climate Momentum: How NEFF Positioned Itself to Make Hay of a Once-in-a-Lifetime Opportunity
Writing by NEFF Executive Director Bob Perschel and NEFF Communications…
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New England Forestry Foundation’s Exemplary Forestry management practices are a fundamental tool, but how do we take them to scale across a landscape that is largely privately owned? For many large private landowners in the industrial forests of New England, financial constraints limit their ability to shift their forest management approach. Enter the Exemplary Forestry Investment Fund (EFIF).
The EFIF is a for-profit and long-term timber investment fund that is working to acquire and conserve 100,000 acres of Maine forests for improved environmental and financial outcomes through a finance structure that blends public, private, and philanthropic capital.
New England Forestry Foundation (NEFF), the Maine Mountain Collaborative (MMC), and Quantified Ventures jointly run the EFIF to attract investors who are interested in both stable, long-term investment and quantifiable environmental results. By blending sources of capital, the EFIF can bridge the gap to long-term forest stewardship to produce durable forest health, carbon sequestration, improved wildlife habitat, and high-value forest products. This approach is unique in the conservation field and is clearly replicable in other regions of the country.
The EFIF attracts private “impact” investment funding to improve Maine’s forests and achieve conservation outcomes. Impact investing refers to investing that seeks positive social and environmental outcomes and also a financial return. While large public land acquisition or changing Maine’s forestry laws are two ways to alter management across a landscape, the economic, cultural and political history of this landscape leans heavily toward private ownership and away from government intervention. The EFIF is a tool that relies on private investment and private land ownership.
It’s also a tool that works with a forest’s natural timeline. Trees in New England take a long time to mature, and patience and careful management are needed to realize the full suite of financial and environmental benefits Maine’s forests can provide.
Starting from today’s average forest condition in western Maine, the timeline needed to increase forest growth rates and timber quality are simply not profitable for short-term investors. Unfortunately, some forests in northern New England are seeing the results of forest management that has prioritized short-term financial return, which has produced poor age-class diversity, poor stand quality, and stocking below the regional average; the regional average is 15 cords per acre, and NEFF’s Exemplary Forestry standards increase stocking to 25 cords per acre with improved results for wildlife habitat, biodiversity and the climate.
NEFF’s intent from the beginning has been to create a forest investment strategy that is attractive to patient investors and ensures forest management that realizes the potential of Maine’s forests for long-term benefits, including climate mitigation. The EFIF seeks to create the necessary financial incentives to allow the landowner and foresters to make long-term management decisions.
This model relies on private philanthropy supporting the goals of the Exemplary Forestry Investment Fund through the purchase of conservation easements on lands acquired by the EFIF. The revenue received by the Fund for the sale of the easements, along with sale of carbon credits, will provide a return to investors in the initial decade or more while the forest is restored to the point where it can produce more than usual amounts of high-quality timber on an ongoing basis.
The EFIF is managed by investment and forestry professionals, with the on-the-ground operations handled by a highly respected forest management company. Adherence to Exemplary Forestry standards is assured through the oversight of a Board of Managers that includes representation from the Maine Mountain Collaborative and NEFF, along with forestry, conservation and investment experts.
The Exemplary Forestry Investment Fund is particularly well suited for investors with a long-term perspective for at least a component of their portfolio; who want to see their dollars bring about substantial and measurable environmental benefits in a globally significant forest and mountain region; who are interested in addressing climate change, particularly those that can use the carbon storage benefits derived from the EFIF’s forest holdings to benefit their own objectives; and who value the stability and countercyclical nature of forest investments.
For more information about the Exemplary Forestry Investment Fund, visit Quantified Ventures: Exemplary Forestry in Maine.
To inquire about participating, contact:
Quantified Ventures Director Seth Brown | email@example.com
MMC Executive Director Bryan Wentzell | firstname.lastname@example.org