Investors worried by climate change and rising inflation are being offered a chance to combat both with the launch of a forestry investment trust from infrastructure and real estate specialist Foresight Group.

The Foresight Sustainable Forestry Company believes it can remove four million tonnes of carbon from the atmosphere, while generating inflation-beating returns not linked to the stock market, with a portfolio of existing and new plantations in the UK.

Despite a favourable climate, Foresight fund managers Richard Kelly and Robert Guest say the UK is one of the least-forested countries in Europe, with 13% of forest cover compared to a continental average of 46%.

With global demand for timber products forecast to quadruple by 2050, according to the World Bank, the pair say it is not sustainable for the UK to continue to import the bulk of its sawn wood.

They predict the trust’s targeted annual investment returns of at least 5% over the consumer price index will come from the rising value of forestry land – which has historically beaten inflation – and from the sale of timber, an increasingly valuable sustainable construction material. javascript:”;

Foresight (FSG), which already runs Foresight Solar (FSFL) and JLEN Environmental Assets (JLEN) investment companies, is looking to raise £200m for the new London-listed closed-end fund, its first launch since the group itself floated on the stock market in February.

‘Embrace’ trees

Richard Davidson, a former Lansdowne Partners’ Macro Fund manager with 20 years’ experience of investing in Scottish forests, will chair the new trust.

‘Forestry provides a compelling investment opportunity, meeting investor requirements on climate, sustainability and ESG [environment, social, governance] issues, inflation protection properties and portfolio diversification,’ he said in an intention to float statement yesterday.

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