Investing in woodland conservation isn’t just for wealthy environmentalists anymore. The investment arms of massive banks are getting into the game too, as interest mounts for nature-based solutions to remove greenhouse gasses from the atmosphere.
Timber, wood that is grown to use for carpentry or to build homes, may be one of the lesser-known backable assets out there. It has long been considered a reliable investment, and has even held up well against inflation as demand and pricing for the commodity tends to benefit as inflation rises.
It’s part of the reason JPMorgan Chase’s asset management arm has had timber in its portfolio for years, and why it now plans to double down.The bank announced on Wednesday it had bought 250,000 acres more of timberland across three sites in the Southeastern U.S. for $500 million. The woodlands will be managed by JP Morgan’s Campbell Global, an investment manager with three decades of experience in natural resource management.
The bank’s investment will likely provide returns to JPMorgan as lumber prices rise on the back of a potential rebound in the U.S. housing market. But another reason for the largest investment bank in the world by revenue to put its money on timber lies in the value of keeping the trees standing, rather than cutting them down.
“The properties will be continuously managed for both carbon capture and timber production to meet growing demand for sustainable building products and other uses,” JPMorgan wrote, as the bank and other institutional investors like it start piling into the rapidly-growing market for carbon sequestration.
The evolving carbon market
Since JPMorgan acquired Campbell Global in 2021, it made clear that its interest in forests was not just about cutting down trees, and was designed to prove that sustainable investing and positive returns could go hand in hand.
In addition to providing a refuge for wildlife, woodland conservation can have a direct…
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