Manulife Investment Management announces new principles for timberland and agriculture carbon projects
Manulife Investment Management has introduced new guidelines for managing carbon credits in timberland and agriculture projects. The firm aims to generate high-quality carbon credits driven by increasing corporate net-zero commitments, with demand expected to rise significantly by 2050. The guidelines emphasize principles like additionality and permanence, requiring carbon credits to genuinely reduce emissions. The firm oversees approximately 6 million acres of timberland and 400,000 acres of farmland, with total assets under management of US$59.2 billion. These initiatives aim to enhance investor confidence in natural climate solutions.
- Introduction of new guidelines for carbon credits, potentially enhancing market credibility.
- Expected increase in carbon offset demand could create additional investment opportunities.
- Established a robust framework for carbon credits based on leading carbon standards.
- None.
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Sees carbon as integrated value driver for investors
BOSTON, April 6, 2022 /PRNewswire/ - Manulife Investment Management announced today new guidelines for managing quality carbon credits for timberland and agriculture. The new principles have already been integrated into Manulife Investment Management's timberland acquisition screening for both existing carbon projects and new carbon project development opportunities. They address the firm's intention to generate high-integrity, high-quality carbon credits for investors and the environment.
"We recognize the demand for carbon offsets that is currently primarily driven by corporate net zero commitments; however, it is anticipated that voluntary carbon offset demand will increase by a factor of up to 100 times by 2050," said Thomas G. Sarno, global head of timberland investments, Manulife Investment Management. "The increased demand is helping to move the carbon markets toward greater transparency and standardization for sequestration and is another way for clients to put capital to work while making a positive impact."
"We're confident that through the continued focus on natural capital accounting and applications of new and existing science to measure carbon capture in soil and generate resulting carbon value that we'll deliver on the enormous potential for agriculture to contribute to the carbon sequestration goals sought by investors," added Oliver S. Williams IV, CFA, global head of agricultural investments, Manulife Investment Management.
Over the past year, an internal working group at Manulife Investment Management conducted a landscape analysis of the leading carbon standards that various independent groups have created. The working group then developed a set of carbon principles aligned with the preliminary Core Carbon Principles created by the Integrity Council for the Voluntary Carbon Market—a recently launched governance body evolving from the Taskforce on Scaling Voluntary Carbon Markets. The firm includes—but does not limit—its new carbon guidelines to key principles of additionality, permanence, leakage, and accurate monitoring, reporting, and verification. The internal carbon standards working group will only recommend opportunities if the project closely adheres to the new guidelines.
Under these guidelines the carbon credits are required to be:
- Real—They must genuinely reduce carbon emissions and contribute to global climate change initiatives
- Based on realistic and credible baselines—The baselines must be defined as levels of emissions normally occurring in a business-as-usual context
- Monitored, reported, and verified—Using recognized and certified intermediaries, platforms, and protocols, run by public or private organizations for verification, issuance, and credit trading
- Permanent—Carbon is sequestered for the long term for true climate benefit
- Additional—Additive carbon sequestration above and beyond the status quo that wouldn't otherwise have occurred in the absence of carbon finance
- Able to minimize, and account for, any leakage—Calculate and minimize emissions that may transfer to adjacent or nearby locations that aren't participating
- Only counted once—Unambiguous attribution of the credit
- Focused on co-benefits and doing no net harm—Focus on additional social and ecological benefits such as improving biodiversity and minimizing negative externalities that may result from carbon project activities
- Managed to avoid enabling greenwashing for carbon offset buyers and carbon inset transfer recipients—Rigorously screen potential credit buyers and recipients for tangible commitments to and progress toward climate action
"Manulife Investment Management has managed its traditional sustainable timberland and agriculture investment strategies for more than 30 years, and the opportunity for optionality through carbon capture is another way to generate value for clients," said Eric Cooperstrom, managing director, impact investing and natural climate solutions, Manulife Investment Management. "We're working on developing even more intense carbon-value investment capabilities, and the implementation of our new carbon credit guidelines provides additional rigor to instill investor confidence in these emerging natural climate solution strategies."
Manulife Investment Management manages approximately 6 million acres of timberland across the United States, Canada, New Zealand, Australia, Brazil, and Chile. It also oversees approximately 400,000 acres of prime farmland in major agricultural regions of the United States and in Canada, Chile, and Australia. The firm's comprehensive private markets businesses include private equity and credit, infrastructure, real estate, timberland, and agriculture with a total AUM of US
About Manulife Investment Management
Manulife Investment Management is the global brand for the global wealth and asset management segment of Manulife Financial Corporation. We draw on more than a century of financial stewardship and the full resources of our parent company to serve individuals, institutions, and retirement plan members worldwide. Headquartered in Toronto, our leading capabilities in public and private markets are strengthened by an investment footprint that spans 18 geographies. We complement these capabilities by providing access to a network of unaffiliated asset managers from around the world. We're committed to investing responsibly across our businesses. We develop innovative global frameworks for sustainable investing, collaboratively engage with companies in our securities portfolios, and maintain a high standard of stewardship where we own and operate assets, and we believe in supporting financial well-being through our workplace retirement plans. Today, plan sponsors around the world rely on our retirement plan administration and investment expertise to help their employees plan for, save for, and live a better retirement. Not all offerings are available in all jurisdictions. For additional information, please visit manulifeim.com.
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SOURCE Manulife Investment Management
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