Foresight Natural Capital Achieves Successful First Exit from Welsh Afforestation Project – Business News Wales

Report on the Sale of Banc Woodland by Foresight Natural Capital

Executive Summary

Foresight Natural Capital (FNC) has successfully completed the sale of Banc Woodland, an early-stage afforestation project in Carmarthenshire. This transaction serves as a significant proof of concept for FNC’s investment model, demonstrating strong financial returns while making direct contributions to several United Nations Sustainable Development Goals (SDGs), particularly SDG 13 (Climate Action) and SDG 15 (Life on Land). The sale validates the commercial viability of nature-based solutions as an asset class, aligning profitability with critical environmental objectives.

Project Performance and Financial Returns

The Banc Woodland project involved the transformation of marginally economic grazing land into a productive forest asset. Acquired in 2021 and planted in 2022, the project has exceeded performance expectations in terms of tree growth and carbon sequestration rates. The successful sale underscores FNC’s capacity to generate value through proactive land management and the monetisation of ecosystem services.

Key Financial Metrics

• Multiple on Invested Capital (MOIC): 1.8x
• Internal Rate of Return (IRR): 15.5%
• Holding Period: 4.75 years
• Associated Assets: The sale included 16,550 verified Woodland Carbon Code units.

Contribution to Sustainable Development Goals (SDGs)

The Banc Woodland project is a clear example of an investment strategy that actively supports global sustainability targets. Its design and execution are intrinsically linked to multiple SDGs.

1. SDG 13: Climate Action

   The project directly contributes to climate change mitigation through significant carbon sequestration. The generation and sale of 16,550 Woodland Carbon Code units provide a quantifiable measure of its impact on removing carbon dioxide from the atmosphere, supporting the UK’s net-zero ambitions.

2. SDG 15: Life on Land

   By converting low-productivity land into a thriving forest, the project protects and restores terrestrial ecosystems. This afforestation effort enhances biodiversity, prevents land degradation, and establishes a resilient natural habitat, directly aligning with the core targets of SDG 15.

3. SDG 8: Decent Work and Economic Growth

   The profitable exit demonstrates that sustainable land use can drive economic growth. This nature-based investment model creates value and delivers strong returns, proving that environmental stewardship and commercial success are not mutually exclusive.

4. SDG 12: Responsible Consumption and Production

   The project contributes to a sustainable, long-term timber supply within the UK. This helps address structural shortages and promotes responsible production patterns in the construction and materials sectors.

Strategic Implications and Future Outlook

This successful transaction marks a critical milestone for FNC, validating its proactive development model in a high-interest-rate environment. The capital generated from the sale will be reinvested into new woodland creation projects, accelerating the strategy’s overall impact.

Broader Afforestation Strategy

FNC’s wider strategy aims to deliver significant environmental and economic benefits, contributing further to the SDGs. Key objectives include:

• Planting approximately 12 million trees across 54 properties.
• Ensuring a long-term, sustainable timber supply.
• Achieving permanent carbon removal at scale.
• Protecting and enhancing biodiversity across the entire portfolio.

Stakeholder Collaboration (SDG 17: Partnerships for the Goals)

The success of the Banc Woodland project was enabled by effective collaboration between multiple specialist organisations, demonstrating the importance of partnerships in achieving sustainable development.

Key Partners

• Sales Agent: Goldcrest Land and Forestry Group
• Legal Advisers: Farrer & Co
• Project Delivery & Ongoing Management: Tilhill Forestry, in collaboration with EJD Forestry

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article on the Foresight Natural Capital (FNC) afforestation project in Wales connects to several Sustainable Development Goals, primarily focusing on environmental protection, climate action, and sustainable economic growth. The main SDGs identified are:

• SDG 13: Climate Action: The project’s core purpose is to combat climate change through carbon sequestration.
• SDG 15: Life on Land: The initiative directly involves afforestation, land transformation, and biodiversity enhancement.
• SDG 12: Responsible Consumption and Production: The project aims to create a sustainable supply of timber, a key natural resource.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the activities and goals described in the article, several specific SDG targets can be identified:

SDG 13: Climate Action

• Target 13.2: Integrate climate change measures into national policies, strategies and planning. The project aligns with UK-wide climate goals by creating a commercially viable model for afforestation and carbon removal. The article mentions the project makes a “direct contribution to the fight against climate change” and focuses on “permanent carbon removal,” demonstrating the integration of climate action into business strategy and land management.

SDG 15: Life on Land

• Target 15.2: Promote the implementation of sustainable management of all types of forests, halt deforestation, restore degraded forests and substantially increase afforestation and reforestation globally. The article is a clear example of this target in action. FNC’s strategy is to “plant approximately 12 million trees in total across 54 properties,” which represents a substantial increase in afforestation. The project transformed “marginally economic grazing land into a productive forest asset,” directly contributing to this goal.
• Target 15.5: Take urgent and significant action to reduce the degradation of natural habitats, halt the loss of biodiversity and, by 2020, protect and prevent the extinction of threatened species. The strategy is explicitly designed to “protect and enhance biodiversity across the portfolio,” directly addressing the fight against “biodiversity loss” mentioned in the article.
• Target 15.9: Integrate ecosystem and biodiversity values into national and local planning, development processes, poverty reduction strategies and accounts. The project demonstrates the successful integration of ecosystem values into a commercial model. By achieving a “highly profitable milestone” through “ecosystem service monetisation” (specifically carbon sequestration), the project shows how natural capital can be valued within development and investment processes.

SDG 12: Responsible Consumption and Production

• Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources. The project’s strategy is designed to deliver a “long-term timber supply” to address the “UK’s structural timber supply shortage.” This creates a sustainable source of a natural resource, contributing to more responsible production and consumption patterns.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article provides several quantitative and qualitative indicators that can be used to measure progress towards the identified targets.

Indicators for SDG 13 & 15

• Progress in afforestation: A direct indicator is the number of trees planted. The article states FNC’s broader strategy aims to “plant approximately 12 million trees in total across 54 properties.” This is a clear metric for progress under Target 15.2.
• Carbon sequestration volume: The article specifies that the sale of Banc Woodland included “16,550 Woodland Carbon Code units.” This is a direct, quantifiable indicator of carbon removal, measuring progress against the goals of SDG 13.
• Economic valuation of ecosystem services: The financial returns, including a “multiple on invested capital (MOIC) of 1.8x” and an “internal rate of return (IRR) of 15.5%,” serve as indicators for Target 15.9. They demonstrate the successful monetisation and integration of ecosystem services into a commercial framework. The “value per hectare” is also mentioned as a reflection of successful growth.
• Land transformation rate: The conversion of “marginally economic grazing land into a productive forest asset” over a “4.75-year holding period” is an indicator of the pace and success of land restoration efforts under Target 15.2.

Indicators for SDG 12

• Timber supply volume: While not yet quantified in the article for this early-stage project, the stated goal of delivering a “long-term timber supply” implies that the future yield of timber from these forests will be a key indicator of success for Target 12.2.

4. Table of SDGs, Targets, and Indicators

Source: businessnewswales.com