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.
By Lananh Nguyen
Tom Crowder spent much of his two-year career in the NFL running away from men who weighed upwards of 300 pounds. These days? He worries about bears and snakes. As a senior vice president at Bank of America Corp., Crowder spends most days in the woods, from the evergreen forests of New England to the wetlands of the Carolinas, scouting U.S. timberland assets for people with a net worth of at least $100 million and a minimum of $10 million to invest.
“Trees don’t move as fast as Pro Bowl linebackers,” Crowder says on a recent field trip to a client’s timber farm in South Carolina overlooking the alligator-populated Waccamaw River. As turtles sun themselves and wild turkeys roam, he recounts over a picnic lunch the “neat experience” of his stint as a wide receiver and safety for the Dallas Cowboys. After a busted jaw and emergency surgery, he was happy to go back to his roots, as a third-generation forester.
Crowder is among more than 200 experts employed by Bank of America’s Specialty Asset Management group, or SAM, which manages more than 94,000 assets with a value of $13.6 billion for individuals and institutions. The target client is looking for timberland, farms, ranches, energy interests, or real estate, so-called alternative investments that can diversify portfolios mostly made up of stocks and bonds and can provide a hedge against inflation.
Returns for timberland totaled 3.2% in 2018, compared with 2.4% so far this year, according to an index from the National Council of Real Estate Investment Fiduciaries.
By Sarah Plummer
School officials in some of West Virginia’s most rural counties are slated to see major losses in financial support they receive from the U.S. Forest Service.
The Secure Rural Schools Act provides financial support for 775 counties across the nation located near national forests. These counties once relied on a portion of timber revenue, but increased logging regulations on federal land in the 1990s caused these revenues to dip drastically. The act was developed to shore up these forested counties.
Babete Anderson, national press officer for the Forest Service, said, without congressional reauthorization of the Secure Rural Schools Act, payments to these rural schools must revert to 1908 guidelines regarding timber revenues.