By Jeff Kart
The Conservation Fund has a goal of conserving 5 million acres of at-risk forests in the next 15 years. They’ve announced the closing of unique 10-year green bonds totaling $150 million. What does that mean? Pictures can tell part of the story.
The problem: Forests in America are being broken up and developed. In the last 30 years, 36 million acres have been lost. Another 37 million acres could be lost in coming decades if the situation is left unchecked, according to the fund, headquartered in Arlington, Virginia.
And besides turning carbon dioxide into oxygen, offsetting as much as a fifth of the nation’s carbon emissions, forests support more than 8.5 million jobs, according to Larry Selzer, CEO of the fund. Selzer says the bonds are the first step in scaling up to a goal of conserving 5 million acres in the next 15 years.
Proceeds from the bonds will go to scale up The Conservation Fund’s Working Forest Fund, which is dedicated to mitigating climate change, strengthening rural economies and protecting natural ecosystems.
This happens through the permanent conservation of at-risk working forests, according to the nonprofit. The term “working forest” refers to land that’s “sustainably managed to supply a steady, renewable supply of wood for industry and consumer purposes while also providing jobs and community benefits.”
John Gilbert, executive vice president and chief financial officer with The Conservation Fund, says the bonds should be fully utilized in the next six to nine months. Goldman Sachs Group Inc. was sole underwriter, Bloomberg notes.
“We are going to intervene and buy the most important, at-risk forests when they come up for sale with the bond proceeds,” Gilbert says. “This is how we stop the sellers from fragmenting the forests, and how we buy time for public agencies to put funding in place that permanently protects the forests in a balanced way for nature, recreation and local jobs.”
Anyone can buy one of the bonds, but like most corporate and municipal bonds, they are primarily sold to big investors and institutional accounts. “There was high interest among investors in these green bonds, and they were oversubscribed by 2.5 times the $150 million supply,” Gilbert added.