Sustainable Investment Awards 2023

ESG investment initiative of the year, North America: Anew Climate's Bluesource Sustainable Forests Company

Bluesource Sustainable Forests Company (BSFC) is a joint venture between North American decarbonisation solutions company Anew Climate and alternative investment firm Oak Hill Advisors (OHA).

BSFC was established in October 2021 with the goal of acquiring and managing forestlands for long-term carbon sequestration.

In its first year, BSFC purchased 1.8 million acres of former industrial timberlands, including The Forestland Group's (TFG's) portfolio of forest holdings, as announced in November 2022.

The TFG acquisition, valued at approximately $1.7 billion, represents one of the largest private forest carbon investments in the US, according to BSFC.

The plan is to reverse previous land management practices and sequester atmospheric carbon dioxide through sustainable management for biodiversity and tree growth.

BSFC has also agreed to acquire additional TFG-managed entities holding an additional 200,000 timberland acres. The transactions are valued at approximately $1.8 billion in total.

It is planning to implement an 80% to 90% reduction in harvest levels across its entire portfolio, compared with the previous landowners.

BSFC said it will pay for operational costs and meet its fiduciary responsibility to its consortium of international and domestic investors primarily through carbon revenues.

The carbon income will allow BSFC to implement lighter touch harvesting practices to increase carbon sequestration, it said. Non-timber revenue streams, such as hunting leases, easements, and public recreational access will be maintained and increased where beneficial, said BSFC in its awards submission.

"Forests, sustainably managed, are and will be a major climate mitigation tool with substantial benefits to local ecosystems and communities.

"Change at this scale requires equal dedication from buyers seeking the highest quality carbon credits. With the help of several significant global investment firms, led by OHA, and the shared commitment to the climate by carbon market participants, environmental finance has made a significant stride in furthering climate action through nature-based solutions," commented Bill Townsend, chief strategy officer at Anew, in the company's November 2022 press release announcing the TFG purchase.

Element Markets and Bluesource merged to create Anew Climate in June 2022.

Corridor thinning to promote species diversity and natural regeneration. Source: Anew Climate