Expansion of Forestry Investments by LGPS Fund
Investors Embrace Forestry Strategies in Support of Net Zero Goals
Investors across the globe are increasingly aligning their strategies with natural capital, including forestry investments, as part of their commitments to reach net zero emissions. This shift in investment approach is not driven by division, but rather by a growing consensus and commitment.
The South Yorkshire Pensions Authority (SYPA), a key player in the UK's institutional investment landscape, has already allocated £50m to a forestry fund managed by Gresham House. SYPA, which manages a £11.1bn fund, is also part of the Border to Coast pool.
George Graham, director at SYPA, has emphasized the importance of forestry in the natural capital allocation of the fund. According to Graham, forestry provides a resilient and diversified source of returns for SYPA, and contributes to enhancing biodiversity. He also stated that forestry strategies help combat climate change, as outlined in SYPA's investment strategy.
Campbell Global, a part of J.P. Morgan Asset Management, has been given a mandate by SYPA. Campbell Global's forestry strategy invests in global forestry assets, focusing on projects that sequester carbon.
The growing interest in natural capital strategies is evident in the fundraising figures. In the first half of 2025, fundraising for natural capital and forestry-related investments reached record levels, totalling $7.9 billion. This strong momentum and growing enthusiasm are reflected in the responses of institutional investors.
Nearly all institutional investors (~99%) are planning to increase their nature-based investments, up from 68% in 2023. Investors are not just viewing these strategies as risk mitigation, but also as attractive financial opportunities. About 43% of investors cited financial returns as a primary motivation for nature investments, reflecting confidence in the return profile.
Leading asset managers and large institutional funds, such as BlackRock, Goldman Sachs, and Norway’s Government Pension Fund, recognise natural capital as a vital asset class integral to long-term sustainable value creation. This reinforces investor confidence in forestry and nature-based solutions as part of net zero strategies.
In conclusion, institutional investors engaged in natural capital and forestry investments appear largely unified in viewing these strategies as viable and beneficial components of their portfolios, both financially and in supporting net zero commitments, rather than divided on their return profiles.
[1] Source: Investment & Pensions Europe
[2] Source: Natural Capital Finance Alliance
[3] Source: Global Forest Investment Network
[4] Source: BlackRock and Goldman Sachs
- Given the increasing investment in forestry as a means to combat climate change and support net zero goals, institutions like SYPA are turning to environmental science for guidance, as they recognize the financial returns and biodiversity benefits associated with forestry.
- With an emphasis on investing in global forestry assets that sequester carbon, organizations such as Campbell Global are crucial partners for institutions like SYPA in their pursuit of both financial gains and environmental stewardship, contributing to the finance sector's growing interest in climate-change related environmental-science investment opportunities.
